China shares: Are BYD and CATL shares worthwhile now? The car manufacturer BYD $BYD (+2,39%) remains relatively stable despite the political turmoil in the US and is independent of the US market. In the midst of a tense trade conflict between the USA and China, the two countries have surprisingly decided to lower tariffs for the time being. From Wednesday, Chinese goods in the USA will only be subject to 30 percent tariffs, while American products will be subject to 10 percent. This regulation is initially valid for 90 days and offers both sides the opportunity to conduct further negotiations. Despite this positive development, uncertainty remains high for Chinese exporters as geopolitical tensions continue to loom large.

US stock markets mixed: AI shares gain after Trump's Saudi Arabia trip Wall Street took a breather after two days of gains. The Dow Jones index fell by 0.2 percent to 42,051 points, while the S&P 500 rose slightly by 0.1 percent. However, the Nasdaq Composite was able to pull away with a gain of 0.7 percent. The trade conflict between the US and China remains the dominant topic, even if the latest developments point to a possible easing of tensions. Uncertainty about future tariffs and the pressure to reach an agreement within 90 days are weighing on the markets. On a positive note, shares in Nvidia and AMD benefited from a planned investment package in AI data centers in Saudi Arabia. On the other hand, American Eagle Outfitters fell by 6.5% due to disappointing quarterly figures. Oil prices consolidated after the previous strong gains, while the price of gold fell due to falling demand for safe investments.

Sources:

https://www.capital.de/geld-versicherungen/china-aktien--lohnen-sich-jetzt-aktien-von-byd-und-catl--35727666.html?utm_source=ntv.de&utm_medium=referral&utm_campaign=homepage

https://www.n-tv.de/wirtschaft/KI-Aktien-legen-nach-Trumps-Saudi-Arabien-Reise-zu-article25768511.html

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China's tariff measures against Canada

China strikes back! The Middle Kingdom has reacted with a bang to the punitive tariffs imposed by Canada on Chinese electric cars, including the popular models from BYD $BYD (+2,39%). From March 20, things will get serious: tariffs of a whopping 100 percent on Canadian rapeseed oil and peas are on the cards. Fishery products and pork will also face 25 percent tariffs. These measures are not just a move, but a direct response to Canada's decision in October to introduce punitive tariffs on Chinese electric vehicles, steel and aluminum. Beijing believes that Canada's actions violate its foreign trade law, which makes the introduction of tariffs appear justified.

The Canadian government argued that Chinese companies are keeping their prices artificially low through state subsidies. The USA and the EU have already taken similar steps against Chinese exports. In Hong Kong trading, BYD shares fell by 1 percent to HKD 49.45, showing that the markets are keeping a close eye on the situation.

Robinhood shares under pressure

The Robinhood $HOOD (+5,09%)-shares are struggling. Regulatory problems and a weak stock market environment are weighing heavily on the US online broker. A dispute with the US securities regulator FINRA is costing Robinhood almost 30 million US dollars. The regulator has identified numerous violations at Robinhood Securities and Robinhood Financial, many of which date back years. At issue are anti-money laundering deficiencies and inadequate disclosure. Although Robinhood agrees to pay 29.75 million US dollars without admitting the allegations, the pressure is reflected in the share price, which temporarily fell by 14.38 percent to 38.03 US dollars. In addition, the weak Bitcoin price is putting further pressure on the share price, as Robinhood is also active in the cryptocurrency market.

TRATON with a gloomy business outlook

The TRATON $TRA-share has taken a knock. Following a gloomy forecast from the company, which points to a weaker global economy, the share price plummeted. Despite impressive margin growth last year, TRATON has gloomy premonitions for the future. The share plummeted by almost eight percent after the start of trading and settled at 36.30 euros at midday, a drop of 5 percent. TRATON expects a turnover development of between minus 5 and plus 5 percent and an operating margin of 7.5 to 8.5 percent in the new year. Analysts remain cautious, as market expectations are at the upper end of the forecast range. Even the positive development in the fourth quarter cannot compensate for the uncertainty surrounding future demand.

Sources:

https://www.finanzen.net/nachricht/aktien/handelskrieg-byd-aktie-co-china-uebt-vergeltung-fuer-kanadische-e-auto-zoelle-14301821

https://www.finanzen.net/nachricht/aktien/schwaches-umfeld-robinhood-aktie-faellt-zweistellig-vergleich-mit-finra-nach-verstoessen-und-bitcoin-schwaeche-14304657

https://www.finanzen.net/nachricht/aktien/markterwartungen-uebertroffen-traton-aktie-unter-druck-marge-erhoeht-ausblick-vorsichtig-14302960

Imagine you could buy one of the world's largest car manufacturers - and on top of that you'd get a luxury company like Porsche and a commercial vehicle company like Traton for "free". Sounds too good to be true? That's exactly how Volkswagen ($VOW (-0,37%) ) is currently valued on the stock market. But why is that and what does it mean for investors? Let's analyze the facts! 💡

SWOT analysis: Where does VW stand?

Strengths 🌟

• Brand diversity: With Volkswagen, Audi, Porsche, Škoda and Lamborghini, VW covers almost all segments.
• Financial stability: Net liquidity in the Automotive Division of €34.4 billion offers security.
• Electromobility: Successful models such as the ID.7 and ID.Buzz demonstrate VW's progress in electromobility.

Weaknesses ⚡

• Dependence on China: Deliveries in this key market have slumped by 10%.
• High investment requirements: 13.6% of turnover is spent on research and development.

Opportunities 🌍

• Valuation: The share is currently trading so low that VW's core business is practically "free". 🚨
• Technology: Partnerships such as with QuantumScape could secure VW a long-term advantage.

Risks 🚧

• Competition: Tesla $TSLA (+6,14%) , BYD $BYD (+2,39%) and Chinese manufacturers are increasing the pressure - especially for electric cars.
• Regulation: CO₂ fleet targets could cause additional costs.

Volkswagen: a bargain? 📉

The current market capitalization of Volkswagen is 55 billion €. But how does this low valuation come about? A look at the subsidiaries reveals something astonishing:

Porsche AG ($P911 (-0,48%)):

• Market capitalization: 51 billion €
• VW holds 75 % of it, which represents a value of 38.25 billion € which amounts to

Traton SE ($8TRA (-0,14%)):

• Market capitalization: 15 billion €
• VW holds 90 %which corresponds to a value of 13.5 billion € means.

Together, this amounts to 51.75 billion 👉 Conclusion: Volkswagen's shareholdings alone are worth almost as much as the Group's entire market capitalization. This means that VW's core operating business - which generates billions in sales and profits every year - is virtually "free of charge" comes for free. 🚨

Dividend: Attractive, but not without risk 💰⚠️

Volkswagen entices with a dividend yield of 8.7% (€8.70 per share at a share price of €100) - a dream come true for dividend investors. However, this high payout also reflects the challenges: profits are declining and high investments in electromobility and restructuring could put pressure on the dividend in the future. Although liquidity remains robust at €34.4 billion, risks such as fines for CO2 fleet values or further cost burdens, e.g. due to the expensive restructuring measures at VW and Audi amounting to €2.2 billion, could make cuts necessary. Nevertheless, VW offers an attractive dividend overall, which is certainly interesting even in the event of cuts.

Graham valuation: What is VW really worth? 🧮

Benjamin Graham, Warren Buffett's mentor, developed a simple method for calculating the fair value of a company. His formula takes into account both earnings per share (EPS) and growth potential. Let's take a look at Volkswagen through this lens:

VW's earnings per share (EPS) are 24,3 €. To keep the valuation conservative, we assume a long-term moderate growth rate of 2 % i.e. only about the rate of inflation. Graham's formula is as follows: the value of a company is calculated by multiplying EPS by a base value of 8.5, to which a growth factor is added. Let's use the values: We multiply the 24.3 € profit with 8,5 + (2 × 2). This results in an estimated fair value of over 300 per share.

Even assuming 0 % growth the calculated value would still be 206 per share - well above the current share price of around € 100.

Of course, this is only an estimate and does not take into account all risks such as the challenges in the e-car market or the high investments. But even under conservative assumptions, the calculation shows that Volkswagen could be significantly undervalued. 🚀

Conclusion: Bargain or too many risks? 🚗⚠️

With a market capitalization of 55 billion € seems like a bargain - Porsche and Traton alone cover almost the entire value. But what about the risks?

• E-car battle: Tesla, BYD and Chinese manufacturers are making life difficult for VW - especially in China, where deliveries have fallen by 10%.
• High costs: Billions are flowing into electromobility and restructuring. Can profits and margins keep up?
• Regulatory hurdles: CO₂ targets and possible punitive tariffs could bring further burdens.

What do you think? Will VW master the transformation or are the risks too great? Let me know in the comments! 💬

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