Ann: Quarterly Activities Report and Cash Flow Statement, page-26

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from 01.11.2019
https://investor-magazin.de/0120altech-advanced-materials-die-batterie-aktie/

The German car companies invest tens of billions of euros in the construction of their electric vehicle fleets. In addition, as much of the supply chain as possible should remain in Germany. This is where Altech Advanced Materials comes in, one of the few German battery stocks.

Varta boss Herbert Schein recently warned in an interview with the Augsburger Allgemeine Zeitung that the German car industry is making too much dependence on Chinese suppliers in the battery sector. The good man has to know, because Varta is one of the few German battery stocks. Even if the company still keeps the step into the electric car market open: The Varta share shows after the latest forecast increase ever in which direction it can go. The paper has quadrupled within 12 months, the market value of the company from Ellwangen was on Friday at more than 4.2 billion euros. If the primary products for batteries come from East Asia in the future, many German jobs are in danger. According to figures from the magazine Der Spiegel, 880,000 people work directly in the auto industry or with suppliers.

Without HPA it does not workBut there is a new addition to the battery in the stock market notes: the Altech Advanced Materials (short AAM). The Heidelberg-based company emerged from the stock market coat of the former Youbisheng Green Paper. With the "China Kracher", which has cost many investors a lot of money and nerves, AAM has nothing to do but the stock market coat. Rather, the company plans to establish itself as an investment company in the battery sector. For this one has found a partner in Australia. On co-initiative of the German Balaton one wants to participate in an HPA factory in Malaysia. HPA is high purity (99.99%) alumina. There is a great demand for LED lamps and computer chips. But the material is especially sought after by battery manufacturers. Because HPA is used as a separator of anode and cathode. It prevents short circuits and increases the lifetime of electric car batteries. Research House CRU expects the market to slip into a supply deficit as early as next year (see chart below). And prices are also developing positively. So the material was traded two years ago at a price of $ 27 per kilo. Meanwhile, 40 dollars and more are paid in Japan. In Europe, HPA should even be something more valuable.

German technology in the middle of AsiaAltech Advanced Materials plans to invest up to $ 100 million in the HPA factory. At best, then you keep 49 percent. Current owner is the Australian company Altech Chemicals, which would then hold 51 percent. Their CEO Iggy Tan is also on the board of AAM. The goal is to achieve in 2021 with an annual capacity of 4,500 tons p.a. to go into production. The factory is already under construction, and Altech Chemicals recently announced completion of the first phase of construction (see here). The Dusseldorf-based SMS Group or its subsidiary is implementing the construction itself. It guarantees the quality of the material as well as the production volume. In addition, the plant manufacturer has already invested in the Australian-listed Altech Chemicals and wants to invest more equity. Another plus is that KfW IPEX-Bank will take over part of the financing. She has pledged a total of 190 million US dollars. In addition to the use of German technology, sustainability also played an important role. Because the process used in the production process uses less energy, there are no toxins, only sand and water. All other chemicals are reused as part of the process.Low costs, high cash flowAs a result, Iggy Tan also anticipates very low costs, up to two-thirds lower than current industry production costs. In order to receive the KfW loan, Altech Chemicals published a financial study for the factory. Accordingly, the NAV at a price of $ 27 per kilo of HPA at a whopping $ 505 million. The annual EBITDA is stated in the KfW scenario at $ 76 million. "An essential part of the growth story is, however, that with a view to a few years more HPA plants could arise," says CEO Hansjörg Plaggemars in an interview with stock market whisperers. The fact is that Altech Chemicals is already in contact with the state government of Saxony. Prime Minister Michael Kretschmer invited the company to build the second HPA factory in his state, the Schwarze Pumpe industrial estate. This could allow another supplier from the battery sector to settle in Germany. For Altech Advanced Materials, that's good prospects. First, the NAV of the factory is well above the $ 100 million that you want to spend yourself to acquire a maximum of 49 percent. On the other hand, prices are higher today. In addition, the HPA has already been sold. Mitsubishi Australia, a subsidiary of the Japanese industrial giants, will lose all its material for ten years. Well aware of the rising demand but no fixed price was agreed, so that the Altech shareholders can benefit from this.

Capital increase decidedAltech Advanced Materials (2.70 Euro, A2BPG1) has decided to raise the capital in order to finance it. The stock market coat should eventually become a real company. AAM is still waiting for the approval of the prospectus by the regulator Bafin. As soon as this is available, you want to collect the capital from investors in Germany, probably between 13 and 27 November 2019. The cash capital increase with subscription rights is in the ratio 1:40 (!) At an issue price of 1.10 euros per share. As part of this capital measure, AAM could raise up to € 75 million. In addition, after a private placement for the unsubscribed papers is planned, but then at the price of 1.20 € per unit certificate. In this respect, it is worthwhile for interested investors to buy the AAM stock beforehand and then exercise the subscription right