Siemens Energy – Still in the valley of tears

Expected (e) wind power additions per year worldwide until 2030 , © Wood Mackenzie, Global Wind Power Market Update: Q4 2021
© Wood Mackenzie, Global Wind Power Market Update: Q4 2021

Siemens subsidiary Gamesa still doesn’t seem to be out of the woods, looking at the strong loss (minus 627 million EUR) that this company contributed to its parent (total minus of 560 million EUR). Onshore wind is considered a problem area combined with miscalculations and supply chain issues. For this reason, there is speculation that this subsidiary will be fully integrated or restructured via a share swap, which could be implemented in, among other things, a realignment or even a split-off. A partial merger with a competitor may also be possible. 

On the other hand, Siemens Energy can generate great potential in all areas. New gas power stations that are H2-ready are becoming increasingly important, just considering Germany’s goals alone of shutting down coal-fired power plants as well as nuclear energy. The global demand for electrolyzers should also keep the order books of Siemens Energy full, so the current share price performance ought to be classified under “buy on bad news.” 

Transglobal

Warning 

Each investor must always be aware of their own risk when investing in shares and should consider a sensible risk diversification. The FC companies and shares mentioned here are small and mid cap, i.e. they are not standard stocks and their volatility is also much higher. This report is not meant to be viewed as purchase recommendations, and the author holds no liability for your actions. All information is based on publicly available sources and, as far as assessment is concerned, represents exclusively the personal opinion of the author, who focuses on medium- and long-term valuation and not on short-term profit. The author may be in possession of the shares presented here. 

HOC

Author: Sven Jösting, written March 15th, 2022 

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