The market often undervalues complex companies. Spin-offs – the separation of a division, technology, or subsidiary from an existing company – are a proven way to make hidden value visible. Investors can benefit from this, often with clear advance notice. One of the most well-known spin-offs is PayPal. In 2015, eBay shareholders received 0.22 PayPal shares for each eBay share held. Today, PayPal is one of the world’s largest payment service providers. The Australian company Pure One will soon be listing its highly sought-after gas activities on the stock exchange via an IPO. This is an opportunity investors should not miss.
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.
Pure One – A win-win situation as a short-term return lever
The cleantech company is an integrated developer of clean energy solutions that address both the production and application sides. The business consists of three core pillars. These are the development and use of zero-emission vehicles with battery-electric or hydrogen-based drives. In addition, the company is involved in the construction and operation of production facilities for green hydrogen, supplemented by storage and refueling solutions. This also positions Pure One as a partner for energy suppliers, transport companies, and government initiatives. The company also integrates various energy technologies into holistic systems that can be flexibly adapted to regional needs.
Pure One (PINL:PHCLF) has repeatedly demonstrated its ability to create value for shareholders in the past. Most recently, the Australians announced that they had entered into a binding agreement to sell their entire 40% stake in the Turquoise Group for a total price of AUD 5 million. This sale of non-core assets is expected to generate a profit of approximately AUD 3.4 million.
The upcoming IPO of the gas activities can be seen as a short-term driver of returns. The Australians have hit the nail on the head in terms of timing and valuation, as there is a system alert in the energy market Down Under, especially in the east of the country. According to the Australian Energy Market Operator (AEMO), the continent is heading for a serious structural supply gap from 2028 onwards, as production from established fields is declining faster than expected and the accelerated phase-out of coal is causing additional tension.
The only practical solution, albeit one that has been accepted with some political and ideological reluctance, is gas. The share prices of many local gas producers are already reflecting the situation and the shortage. Pure One is therefore sitting on a treasure trove.
Operating under the name Eastern Gas Corporation, the gas assets will be listed on the Australian stock exchange at the end of February. At the heart of the project is the Windorah gas project in the Cooper Basin. The Cooper Basin is Australia’s most productive onshore basin with a large number of pipelines and processing facilities. This critical infrastructure significantly reduces capital costs and thus acts as a strong profit lever. According to independent reports, the Windorah project has significant 2C resources that are similar in structure and potential to the projects of competitors whose share prices are already rising significantly.
At present, the company is valued at AUD 30 million (around EUR 18 million) at a share price of AUD 0.075. Analysts expect revenue of just under AUD 42 million and a loss of AUD 0.9 million in the current fiscal year. In 2027, AUD 55 million and a profit of AUD 0.7 million are expected. The IPO of the gas operations (Eastern Gas Corporation) at the end of February is expected to provide short-term positive momentum for Pure One shares.
Infineon – From Siemens spin-off to semiconductor giant
The German industrial group spun off its semiconductor division back in 1999. Over the years, Siemens completely divested its stake. In order to better leverage growth opportunities in certain segments, Siemens also spun off its lighting (Osram), medical technology (Siemens Healthineers), and energy infrastructure (Siemens Energy) divisions over the years. The strategy was clearly successful – for both the parent company and its subsidiaries, as evidenced by the strong performance of the shares.
Siemens Healthineers and Siemens Energy are now among the 40 largest German listed companies, as is the industrial group itself. With a performance of over 160% in the last 12 months, Siemens Energy is even the best DAX stock and currently has a market capitalization of almost EUR 130 billion. Analysts forecast further growth.
Looking back, Infineon’s mission to independently exploit growth opportunities by developing innovative semiconductor solutions for automotive, industrial, and digital security applications has been successful. Today, Infineon serves high-growth markets such as e-mobility, energy efficiency, secure networking, and the Internet of Things with around 58,000 employees and revenue of over EUR 15 billion. Even though semiconductor stocks have fallen slightly from their high levels in recent days, experts agree on the good future prospects for this sector. Morgan Stanley recently reaffirmed its “Buy” rating and raised its price target to EUR 54.
TKMS – One of the best performers since the start of the year
The spin-off of thyssenkrupp AG’s marine business can also be described as a success. TKMS has been listed on the stock exchange since October last year. For every 20 thyssenkrupp shares, the group’s shareholders received 1 TKMS share at a calculated price of EUR 60 in their securities account. Today, the shares of Germany’s leading supplier of submarines, naval vessels, and system solutions are trading in the EUR 100 range, close to their all-time high.
Since the beginning of the year, in particular, the stock has stood out with its first-class performance of around 50%. Reports of planned acquisitions and major orders from India provided a boost. The general conditions remain positive. Geopolitical tensions are leading to high defense budgets, which in turn caused TKMS’s order books to rise to around EUR 18 billion at the end of the last fiscal year. This contrasts with a market valuation of EUR 6.2 billion.
Pure One’s stock will benefit from the IPO of its gas activities scheduled for the end of February. Gas assets from Down Under are in high demand due to the looming medium-term supply crisis. Pure One is currently valued at only AUD 29 million. Siemens and thyssenkrupp have demonstrated with Infineon and TKMS what kind of value increases are possible for parent companies and subsidiaries in the long term. Ultimately, all shareholders benefit.
Conflict of interest
Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as “Relevant Persons”) may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a “Transaction”). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.
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