EUR 402 Million Loss in EV Business: Schaeffler Strikes Back With CATL
Shares of Schaeffler AG (WKN: SHA010 | ISIN: DE000SHA0100 | Ticker: SHA0) traded at EUR 7.76 on Monday, up 1.6% from Friday’s closing price. The company’s market capitalization stands at approximately EUR 7.22 billion. Since the start of the year, the stock has lost approximately 7.6%, but it has gained just under 50% year-to-date. The price is currently about 55% below its 52-week high of just under EUR 12.00, reached in January 2026. Headquartered in Herzogenaurach, the automotive supplier employs nearly 109,000 people worldwide. The group manufactures bearings, chassis components, drivetrain systems, and replacement parts for the automotive industry as well as numerous other industrial sectors. The merger with Vitesco has particularly expanded the business in electric drivetrains, control units, and power electronics.
Schaeffler is now deepening its collaboration with the Chinese global market leader in batteries, CATL (WKN: A41CM9 | ISIN: US2109191062 | Ticker Symbol: C7A1). Both companies signed a memorandum of understanding to jointly develop battery management systems and “X-in-1” Integrated PowerBox solutions. The collaboration builds on an already secured customer project and is initially aimed primarily at European automakers. Battery management systems monitor, among other things, the state of charge, temperature, and safety of the battery cells. The Integrated PowerBox combines high-voltage electronics and electromechanical systems into a single unit. CATL is contributing its battery technology, while Schaeffler is bringing expertise in hardware and software, system integration, safety, testing, and European series production. This could shorten development times, reduce costs, and attract new customers. However, this is currently only a letter of intent and not a new major order.
Timing is crucial, as Schaeffler’s e-mobility division is growing but continues to post significant losses. In the first half of 2026, revenue rose by 7.7% on a currency-adjusted basis to EUR 2.58 billion. Adjusted EBIT, however, stood at minus EUR 402 million. In the previous year, it was minus EUR 463 million. The margin thus improved from –19.3% to –15.6%. At the Group level, Schaeffler performed significantly better. Half-year revenue reached EUR 11.67 billion, up 0.4% on a currency-adjusted basis from the prior-year figure. Adjusted EBIT rose by 14% to EUR 549 million, and the margin increased from 4.1% to 4.7%. Net income rose from EUR 43 million to EUR 93 million.
Free cash flow remains a drag, standing at minus EUR 300 million before M&A payments. At the same time, net financial debt has risen from EUR 4.92 to 5.55 billion since the end of the year. For 2026, management expects revenue of EUR 22.5 to 24.5 billion, an adjusted EBIT margin of 3.5 to 5.5%, and positive free cash flow of EUR 100 to 300 million.
From a technical analysis perspective, the picture remains weak. The share price is trading below all moving averages. An important support level lies between EUR 7.00 and 7.20. If this zone is breached, the EUR 6.50 mark could come into focus. On the upside, resistance levels lie between EUR 7.80 and 8.00. Only above these levels would the technical picture improve sustainably.
Almonty: Tungsten Giant Accelerates Growth and Share Buyback
Ongoing geopolitical tensions underscore the importance of Western-oriented commodity producers such as Almonty Industries (WKN: A414Q8 | ISIN: CA0203987072 | Ticker Symbol: ALI1). With the successful ramp-up of production at the Sangdong mine in South Korea, the company has reached a decisive turning point in significantly reducing the West’s dependence on Chinese tungsten exports—both sustainably and in terms of volume. The on-schedule commissioning of the first expansion phase is now converting the massive ore reserves into high-margin cash flows. This operational development is bolstered by a persistent structural supply deficit in technology metals such as tungsten. As a result, the market price for the intermediate product ammonium paratungstate recently averaged USD 3,075 per MTU.
The financial impact of this strategic turning point for the company is impressively demonstrated by the latest quarterly figures for 2026. The Group recorded a massive 498% jump in revenue to CAD 43.0 million. At the same time, net income turned into a substantial profit of CAD 181.8 million. This was supported by an operating profit from mining of CAD 26.1 million. With the company’s increasing visibility, the offtake agreement with Global Tungsten & Powders was recently extended to a term of 21 years. In addition to a 40% increase in volume, the adjusted pricing formula will secure Almonty Industries additional future revenue of an estimated USD 30 million per year.
To finance its global growth strategy, management successfully issued an oversubscribed USD 800 million convertible senior notes offering in June 2026. This substantial capital raise increased cash and cash equivalents to approximately USD 1.2 billion and, among other things, enabled the repayment of an existing KfW loan. With this financial strength, Almonty is now advancing the development of the Gentung Mine in the US and its Iberian projects simultaneously. The excellent liquidity position also enabled the launch of a massive share buyback program of up to USD 300 million in August 2026. This move came as a surprise, but the share price had previously fallen by over 50% from its all-time high in April 2026 to the end of July. This announcement was immediately followed by significant price gains, with the share recently trading at USD 18.88 per share again. Inclusion in the Russell 1000 and 3000 indices is also likely to support the share price.
Despite these significant fundamental advances, the current share price of approximately USD 18.88 does not yet fully reflect the company’s intrinsic value and importance to the Western defense sector. The capital market is currently failing to adequately price in the upcoming second phase of expansion in South Korea as well as the other mining projects. Consequently, the latest research update from GBC AG unequivocally reaffirms the “Buy” recommendations for this resource stock. The price target has been raised from USD 20.89 to USD 30.00, indicating that the stock still has considerable upside potential. For analytically minded investors, the current valuation level offers an attractive risk-reward ratio following the significant market fluctuations of recent months.
A Billion-Euro Showdown: Will Deutz Become a Defense Contractor?
Shares of Deutz AG (WKN: 630500 | ISIN: DE0006305006 | Ticker: DEZ) closed at EUR 10.30 on Monday. The company’s market capitalization is approximately EUR 1.59 billion, and the stock has gained 16.42% since the start of the year. However, the stock has since fallen significantly from its annual high of EUR 12.50. Headquartered in Cologne, the company is one of the world’s oldest engine manufacturers. Deutz produces powertrain systems for construction and agricultural machinery, material-handling vehicles, and stationary equipment. It also provides services, replacement parts, emergency power systems, and electric drives. Since early 2026, Deutz has been organized into five independent Business Units: Engines, Service, Energy, NewTech, and Defense. The energy and defense businesses, in particular, are intended to make the group less dependent on the cyclical engine business.
Yesterday, August 24, marked one of the most important decisions in the company’s more than 160-year history. At the special shareholders’ meeting, shareholders were to vote on the capital increase for the acquisition of Flensburger Fahrzeugbau Gesellschaft (FFG). The purchase price is approximately EUR 1.6 billion, which is even slightly higher than Deutz’s current market capitalization. FFG maintains, modernizes, and manufactures military wheeled and tracked vehicles for NATO customers. The company generated approximately EUR 760 million in revenue in 2025 and, according to Deutz, has an EBITDA margin of more than 20%. The order backlog stands at approximately EUR 1.9 billion. With this acquisition, Deutz will instantly become significantly larger, more profitable, and better positioned in the European defense market.
However, the price of this restructuring is high. Approximately EUR 1 billion is to be financed through new debt. An additional EUR 600 million will be paid for with newly issued Deutz shares. As a result, the current FFG owners could hold up to 29.9% of Deutz. For existing shareholders, this means significant dilution. At the same time, the financial risk is increasing, as net debt had already climbed from EUR 269.4 million to EUR 520.5 million by the end of the first half of the year. Operationally, Deutz is on a growth trajectory. In the first half of the year, order intake rose by 28.7% to EUR 1.33 billion. Revenue increased by 10.7% to EUR 1.12 billion. Adjusted EBIT even rose by 43.1% to EUR 79.7 million, while the margin increased from 5.5% to 7.1%. Free cash flow, however, deteriorated from a positive EUR 14.4 million to a negative EUR 29.7 million.
CEO Sebastian Schulte is showing confidence, having purchased Deutz shares for nearly EUR 1 million in early August. From a technical analysis perspective, the share price is trading just above the closely clustered moving averages in the range of EUR 9.60 to 9.80. A breakout above EUR 10.50 to EUR 11.00 could pave the way back to the year’s high. Below EUR 9.60, however, the chart picture would darken significantly again.
Schaeffler is responding to ongoing losses in its e-mobility business with a forward-looking technology alliance with CATL, the global market leader in batteries. Almonty, a critical tungsten producer, is now generating high-margin cash flows and is supporting its dynamic growth with a massive share buyback. With its EUR 1.6 billion acquisition of FFG, Deutz is making a high-margin yet capital-intensive entry into the European defense market.
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