Original-Research

Rock Tech Lithium Inc (von GBC AG): Buy

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Original-Research: Rock Tech Lithium Inc - von GBC AG

Einstufung von GBC AG zu Rock Tech Lithium Inc

Unternehmen: Rock Tech Lithium Inc
ISIN: CA77273P2017

Anlass der Studie: Research Note
Empfehlung: Buy
Kursziel: 4.26 CAD
Letzte Ratingänderung:
Analyst: Marcel Goldmann, Cosmin Filker

Electric car market boom continues and is on verge of breakthrough; Rock Tech in a good position to benefit from the e-mobility market; stock price target CAD 4.26/EUR 2.90; rating still BUY

The electric car boom that began a few years ago continues unabated. According to a market study by CAM, the number of electric vehicles sold worldwide reached an all-time high of 2.1 million last year. The China sales region once again proved to be the main driver of the global e- mobility market.

According to our assessment, the worldwide demand for electric vehicles in 2018 was mainly driven by the improved product range offered by car manufacturers (Tesla Model 3, etc.) and by more favourable purchase prices for electric cars. In addition, regulatory factors such as electric car sales quotas (China) or government incentive systems (e.g. purchase premiums, tax advantages) and the expansion of charging networks have spurred the positive market development.

The automobile research institute CAM estimates global sales of 2.7 million electric cars in 2019, a leap in growth of 40.0% compared to the previous year.

Market experts anticipate a strong global rise in the electric car market from 2020 as a result of a broad electric car product offensive that is expected to be launched by (leading) global car manufacturers, as well as an improved charging infrastructure. In our opinion, the significant expansion of the electric car product range planned by the automobile manufacturers is also due to the stricter EU emission standards that are set to apply in the future (car fleet emission quotas). Vehicle manufacturers that breach these EU standards will face severe penalties, which could also harm their image. According to estimates by CAM's automotive experts, between 11 million (pessimistic scenario) and 23 million (optimistic scenario) new electric vehicles could be approved worldwide as early as 2025.

Many automotive experts expect (battery-operated) electric drive to become the drive form of the future for private cars, with conventional drive forms (combustion engines, etc.) becoming less and less significant. In the long term, market experts in the automotive sector also believe that alternative drive forms such as fuel cells have only a small chance of becoming established in the market. In line with this, we expect that e- mobility will achieve a breakthrough in the near future and, as a result, electric vehicles will gain a significant share of the global private car market.

Recently, Rock Tech has mainly focused on expanding its resource base in the area of its core asset, Georgia Lake. In the process, new drilling and exploration work has allowed the lithium-containing resources to be expanded to around 13.3 million tonnes (according to an NI-43-101-compliant resource estimate). In our view, this has also made it possible to achieve a 'critical mass' for the economically efficient mining of lithium as a commodity. This is also indicated by the results of the preliminary economic assessment (PEA) produced by commodity experts. This assessment values the main area of the core project in Georgia Lake at around CAD 312.0 million (net present value, NPV) with an internal rate of return (IRR) of 62.2%.

Following these major strategic steps, the company continues to work on tapping its main asset, Georgia Lake (Canada), and plans to be ready for production in the near future (2021). To achieve this, the company has initiated various processes, such as authorisation procedures or studies. Construction work is expected to begin on the production facility as early as next year. To allow the company to implement the rest of the steps necessary to begin production, it carried out a capital increase of USD 0.70 million (gross issue proceeds) at the start of the year. We anticipate further financing measures in the near future, as these will be necessary to allow us to begin production as planned (economic assessment, production facility, etc.).

Against the backdrop of developments in the e-mobility and lithium sectors and the existing NI-compliant resource base, we have valued Rock Tech using our DCF valuation model and arrived at a fair value of CAD 4.26 or EUR 2.90 per share (previously: CAD 4.05 or EUR 2.71 per share). The increase in our stock price target is due in particular to the roll-over effect (stock price target basis now for the subsequent financial year 2020). Based on the current price level, our previously issued BUY rating remains unchanged. We believe that the company, with its extensive lithium deposit and production planned to start in the near future, is in a very good position to profit significantly from the expected e-mobility breakthrough. Lithium as a key raw material for batteries will play an important part in the ongoing transition to e-mobility within the automotive world.

Die vollständige Analyse können Sie hier downloaden:
http://www.more-ir.de/d/18525.pdf

Kontakt für Rückfragen
Jörg Grunwald
Vorstand
GBC AG
Halderstraße 27
86150 Augsburg
0821 / 241133 0
[e-mail]
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Offenlegung möglicher Interessenskonflikte nach § 85 WpHG und Art. 20 MAR Beim oben analysierten Unternehmen ist folgender möglicher Interessenkonflikt gegeben: (5a,7,11); Einen Katalog möglicher Interessenkonflikte finden Sie unter: http://www.gbc-ag.de/de/Offenlegung
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Datum (Zeitpunkt)Fertigstellung: 25.07.19 (10:58 Uhr) Datum (Zeitpunkt) erste Weitergabe: 25.07.19 (11:30 Uhr)

übermittelt durch die EQS Group AG.

Für den Inhalt der Mitteilung bzw. Research ist alleine der Herausgeber bzw. Ersteller der Studie verantwortlich. Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschluss bestimmter Börsengeschäfte.

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Rating: Buy
Analyst: GBC