3 Battery Stocks That Could Be Multibaggers in the Making: July Edition Key legislative tailwinds and innovations in solid-state technology fuel investor enthusiasm
1d ago · By Faizan Farooque, InvestorPlace Contributor Battery stocks are a hot topic as the global market, valued at $127.3 billion in 2023, is expected to reach $276.3 billion by 2032. Enovix (ENVX): The upcoming Malaysian plant will significantly ramp up production capacity, meeting the rising demand for Enovix’s cutting-edge battery technology. Li Auto (LI): Li Auto’s partnership with CATL introduces a long-range EV battery with a 15-year guarantee and a lifespan of up to 1 million miles. Solid Power (SLDP): The company is innovating sulfide-based solid electrolytes for safer, more energy-dense and cost-effective batteries, targeting a 2026 release.
Enovix (NASDAQ:ENVX) is partnering with Group14 Technologies’ SCC55 silicon-carbon composite to develop cutting-edge silicon batteries. This partnership aims to boost lithium-ion silicon battery capacity by 50% over current systems.
Moreover, Enovix is scheduled to establish a new Malaysian plant, which will greatly increase production capacity to satisfy the rising demand for its innovative battery technology. Enovix has also extended its operating runway till 2026 and implemented a consolidation plan to save fixed expenses by approximately $35 million yearly.
Enovix has inked a deal to provide high-performance batteries for mixed-reality headsets, indicating its foray into new consumer electronics markets.
To further tap the consumer electronics sector, Enovix inked an agreement with Elentec, a top producer of consumer electronics batteries that serves customers such as Samsung Electronics (OTCMKTS:SSNLF).
Thanks to its collaboration with Elentec, Canaccord Genuity notes Enovix’s enhanced regional reach and client base. The cooperation, especially in the consumer electronics sector, will likely consolidate Enovix’s position in Asia.
Canaccord Genuity kept its Buy rating on Enovix and set a $17 price target. Still, the consensus price target for the stock is $30.88, translating into a potential upside of around 68%, which is not bad when considering “Strong Buy” battery stocks.
RM3 TP is not ridiculous, it is achievable. Because YBS is a very small company, it has only 263 mil share. Based on RM1 per share, its market cap will be RM263 mil. Based on RM3 per share. its market cap will be RM789 mil only.
You think market cap RM789mil is very high and impossible to achieve?
Please look at below 2nd liner Technology Stock:- 1) JFTECH - Market Cap Rm802mil 2) CPETECH - Market Cap RM671mil
You go to look at the financial report of this two company, you think YBS (with coming ENOVIX production), is lousy than them?
I am expecting YBS can achieved minimum PAT of RM20mil (1st Year) and RM30mil (2nd Year). If based on PE 30 times, market cap of RM600mil - RM900mil is not ridiculous.
Nasdaq-listed Enovix Corporation, which is an advanced silicon battery company, will invest a total of US$1.2 billion (RM5.8 billion) in Malaysia over a period of 15 years, which includes an RM315 million manufacturing line announced in August.
"With more than three decades of personally working closely with the Malaysian government authorities and having successfully built and run several large factories, choosing Malaysia for our first high-volume manufacturing facility was an easy decision,” its chief operating officer Ajay Marathe said.
He said Malaysia’s deep pool of technical talent, business-friendly environment and close proximity to our vendors and our customers’ manufacturing facilities, makes it an ideal location for us to help develop the battery supply chain ecosystem and manufacture and scale our next-generation batteries.
The manufacturing line co-partnered with YBS International Bhd will be in Penang
Enovix Malaysia Sdn Bhd is currently in the process of installing its machinery and is projected to be fully operational in 2024, it said in a statement here today.
Look at above news, ENOVIX is planning to invest RM5.8bil in next 15 years. For a MNC to invest RM5.8bil, do you think their ROI is RM20-30mil, nope, it will be minimum RM500mil (based on very conservative ROI of 8%) per annum. So YBS as their manufacturing partner, do you think it is ridiculous to predict YBS to earn RM20-30mil per annum? For me, this is very prudence estimation, a normal forecast should be at least RM50-60mil per annum.
Jackie Yong, CEO of YBS is upgrading the company considerably. He wants to go from an SME (Small and Midsize Enterprise) to an LLC (Large Local Co). From an OEM (Original Equipment Manufacturer = producing for another brand) structure to their own pure YBS brand. (I like this a lot, how they actually are upgrading Malaysia too with this.)
🔸They want to end up creating their own EMS (Energy Mgt System), with their own IP. He speaks of an “all integrated solution”, “the Malaysia EMS” and he wants to hire local R&D to add own IP to it.
🔸YBS' ladder of growth: 1. Precision components 2. Assembly 3. Energy assembly 4. Energy storage If their EMS story doesn't work out, they will take a step back from the ladder, back to battery components (already 16 years of experience with that)
🔸Customers? Is sensitive, but he can list the sectors they are working for: In order of profitability: 1. Telecom 2. Automotive 3. Aerospace 🧐 4. Home appliances
🔸The Bumblebee neighbors, a cardboard box factory, is also owned by YBS
🔸Dato Dr. Mohd Sofi Bin Osman, the Non Executive Chairman of YBS is ex-AMD, ex-Intel and ex-Lumileds. There is a lot of trust and a super good relationship between YBS and Enovix.
YBS is not for pumping and dumping... It goes up slowly... like step ladder... becos the nature of it is YBS is building manufacturing lines for Enovix ... every milestone will be a step up.... Contra play will not make money from YBS... Thats why you dun see Telegram gps cheering on YBS.... JUST LIKE GENETEC when genetec move from rm1 to highest rm51....
Imagine 8 lines will bring YBS revenue of rm2 billion per year from Enovix batteries.... They have 10 acres in Science Park for the manufacturing facilities.... Thats are multiples of 8 lines that can be build from 10 acres.... Imagine how big YBS can grow.... Thats why YBS MD likens YBS to Inari ( 14 billion market cap ).... Imagine the share price of YBS.... But it doesnt happen overnite.... PATIENCE!!!
Not sure why the YBS interview has been taken down. Perhaps the CEO has accidentally revealed something that not suppose to reveal, as during the interview, there are a lot of information that never disclosed by the Company.
The Company had in July 2023 secured the Enovix Project which is expected to provide the Group with additional income stream of approximately RM100.00 million per annum as well as contribute positively to the earnings of the Group.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Albukhary
3,043 posts
Posted by Albukhary > 2024-07-15 18:23 | Report Abuse
This is GENETEC 2.0.
Next year will be RM3.00