Opportunities, risks and revaluations – Almonty Industries, Basler and Knorr-Bremse

Basler: Jump in guidance drives share price towards EUR 25 barrier

Basler AG shares attracted attention last Thursday with a share price jump of over 13%, bringing the shares’ gain since the start of the year to almost 61%, while the gain over 52 weeks stands at around 38%. Following the correction in recent months, the machine vision specialist is back in focus. The catalysts are preliminary nine-month figures and another increase in full-year guidance. Revenue rose 35% year on year to EUR 227.4 million. Order intake rose even more strongly to EUR 278.6 million, up 62% from the previous year. Demand benefited particularly from applications in semiconductor and electronics manufacturing, data centres and logistics automation. EBIT reached EUR 51.1 million, compared with an adjusted EUR 14.6 million. The corresponding margin climbed from 8.7% to 22.5%. This article is disseminated in partnership with Apaton Finance GmbH. It is intended to inform investors and should not be taken as a recommendation or financial advice. For the full year, Basler now expects revenue of EUR 295 to 300 million, compared with the previous EUR 270 to 290 million. The expected EBIT margin has risen from 12.5 to 14.5% to 17.5 to 19.5%. However, earnings were supported by special effects, some of which were non-recurring. Performance-related special payments to employees have also been factored in for the final quarter. Supply chain risks remain. Basler will publish the full nine-month report on November 4. The new lower margin limit is therefore three percentage points above the previous upper limit. This explains the positive revaluation. However, the key question remains how much of the increased profitability it can sustain over the long term. Stronger order intake provides a better starting point, while the special effects rule out extrapolating the nine-month margin unchanged. From a technical analysis perspective, the picture has brightened considerably with the share price jump. The shares are currently trading around EUR 23.00, back above the 20-day moving average at EUR 22.14 and the 50-day moving average at EUR 22.71. The 200-day moving average at around EUR 21.58 has also been regained. By contrast, the 100-day moving average at EUR 24.55 is above the share price and forms an initial barrier. The zone around EUR 25 remains particularly important. Recovery attempts have repeatedly stalled in this area since August, and September also lacked the strength for a sustained breakout. The latest move therefore takes Basler directly to an area that could determine the next direction. A convincing breakout above EUR 25 would strengthen the bullish scenario and initially make the region around EUR 27 to 28 interesting again. Above that, the summer highs between around EUR 30 and 32 would come into focus. For this to happen, the share price would need to hold above the breakout zone. If the shares fail again, the moving averages between around EUR 21.6 and 22.7 would be the first potential support levels to watch. Below that, the recent low zone around EUR 20 to 21 remains relevant. The financial results provide a tailwind; what is now needed above all for technical confirmation of a more sustained upward move is a jump above EUR 25.

Almonty Industries breaks China’s tungsten monopoly

Intensifying geopolitical tensions between China and the US, along with the threat of expanding mutual export restrictions, are forcing Western industrial and defence groups to fundamentally realign their raw materials sourcing. Beijing continues to dominate global extraction and refining of the industrially critical heavy metal tungsten, with a share of over 80%. Alternative tungsten producers have therefore rapidly gained, and continue to gain, importance. Over the past two years, one beneficiary has been Almonty Industries. During this challenging period, the company transitioned from an exploration company to a tungsten producer. With the operating permit granted for the state-of-the-art processing plant in Sangdong, South Korea, the group has a strategic counterweight to China’s state-owned groups. The flagship mine in South Korea strengthens supply security for OECD partners. The economic foundation of the company’s growth is a binding long-term offtake agreement with Plansee subsidiary Global Tungsten & Powders for a total volume of 4.41 million metric ton units (MTUs). Over a term of 21 years, the agreement secures sales of at least 210,000 units per year, thereby guaranteeing offtake of over 90% of the planned mine capacity. The contractually fixed sales effectively shield the company against capacity utilisation risks. At the same time, margins remain linked to price movements in ammonium paratungstate. Most recently, the European reference price remained high at around USD 2,950 per MTU after an interim peak of USD 3,125 in the summer. The combination of guaranteed minimum prices and reliable cash inflows gives Almonty Industries the planning certainty it needs. Alongside its core project in South Korea, Almonty processes historical tungsten ore waste dumps at its Los Santos site in Spain. A multi-year supply agreement with Sandvik subsidiary Wolfram Bergbau und Hütten AG guarantees the recovery of at least 1,720 tonnes of tungsten trioxide with a manageable capital expenditure (capex) of around USD 4 million. An advance payment of USD 3 million effectively covers 74% of this capital expenditure, with exclusive marketing rights transferred to the Sandvik subsidiary in return. Industry insiders expect this high-margin waste dump processing to begin in the first quarter of 2027. In Africa, a joint venture in Rwanda, in which Almonty holds 75% and the state 25%, rounds off the portfolio. The company will collectively purchase up to 1,300 tonnes of ore from local producers each year, then certify and export it. Through this vertically integrated value chain spanning three continents, management under Lewis Black reduced country-specific operating risks and secured access to the Gentung Browns Lake Project in the US last year, expanding onto a fourth continent. The fundamental transformation carried out over the past two years has received broad support from leading investment research firms. Following the latest investor day, US investment bank Oppenheimer reiterated its Outperform rating with a price target of USD 19, while Sphene Capital reaffirmed its Buy recommendation with a target price of USD 26.40. Based on the current share price of USD 8.85, where the stock is forming a base, analysts see significant upside potential of between 200% and 300%. For a long-term investment portfolio, Almonty Industries currently offers one of the few direct routes to gaining exposure to one of the West’s limited number of tungsten producers.

Knorr-Bremse: Shares plunge – will the EUR 87 level hold?

Knorr-Bremse AG shares came under significant pressure last week following the publication of the quarterly results. They fell more than 6% from the previous day to a low of EUR 87.30. This marked a new low for the year before the first buyers stepped in and sent the shares out of Monday’s trading at EUR 90.65 yesterday. The decline since the start of the year stands at around 4.3%, while a gain of around 12.4% remains over 52 weeks. Over 5 years, however, the stock is trading at roughly the same level as back then. The Munich-based group develops braking systems and other technical solutions for rail and commercial vehicles. The figures published on Wednesday evening, October 28, show an operational improvement. In the third quarter, revenue rose 9% to EUR 2.05 billion. Operating EBIT increased by 19.1% to EUR 299 million, with the corresponding margin improving from 13.3% to 14.6%. Free cash flow reached EUR 238 million, compared with EUR 159 million in the prior-year quarter. However, order intake in the rail business was disappointing. At around EUR 1.05 billion, it was 10.9% below the prior-year figure and significantly below analysts’ expectations of around EUR 1.18 billion. Customer orders worth around EUR 80 million were delayed. In addition, Knorr-Bremse did not pursue a European project vigorously for profitability reasons. The group expects a partial recovery in rail orders in the final quarter. However, the full-year guidance remains unchanged. Revenue and free cash flow are each expected to be at the upper end of the existing ranges of EUR 8.1 to 8.3 billion and EUR 750 to 850 million, respectively. The operating EBIT margin is still expected to be between 14% and 14.5%. The share price reaction suggests investors place greater weight on weaker rail orders than on higher profitability. Particularly for an industrial company, order intake is a crucial indicator of future capacity utilisation. An improvement in the final quarter would now need to ease these concerns. The technical picture has deteriorated significantly. For months, the shares had traded within a broad range, the lower end of which, between around EUR 95 and EUR 98, had repeatedly provided support. The latest decline clearly broke below this support zone. All the key moving averages are now also above the current share price. The 20-day moving average stands at EUR 98.12 and the 50-day moving average at EUR 101.80. The 100-day moving average is EUR 102.40, and the 200-day moving average is EUR 102.30. This creates a cluster of resistance, particularly around EUR 102.

Conclusion

Basler AG is benefiting from a significant guidance upgrade and strong nine-month results. From a technical perspective, the shares are immediately below the pivotal EUR 25 hurdle. As a Western resources producer, Almonty Industries is breaking China’s tungsten monopoly and securing substantial upside potential through long-term supply agreements. Shares in Knorr-Bremse AG came under considerable pressure following weak rail orders, marked a new low for the year and are now struggling to stabilise at the EUR 87 level.

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