By Justin Spittler, editor, Casey Daily Dispatch
Retail investors applied for 3,201 more shares than the company offered.
Fund managers bid for 537 times the number of shares available.
Demand for the stock was truly overwhelming—so much so that it surged 44% on its first day of trading.
The rise was so explosive, regulators put a stop to it. They halted trading for the day… But that didn’t keep investors from piling in. The stock more than tripled in value over the next six weeks.
See for yourself. Below is a chart of Contemporary Amperex Technology (CATL).
Its share price jumped 265% six weeks after its initial public offering (IPO) on June 11.
I’ll tell you why this stock skyrocketed in a second. But first, let me tell you why this is probably the first time you’ve heard of CATL.
• CATL doesn’t trade on U.S. exchanges…
It trades on the Shenzhen Stock Exchange.
This is, of course, because it’s a Chinese company. It’s the country’s largest lithium-ion battery maker.
These batteries power the smartphone in your pocket. They also power electric vehicles (EVs).
And as regular readers know, the EV market is exploding—and it’s creating a massive money-making opportunity today. More on that in a second…
But let me bring new readers up to speed.
• The EV market barely existed a few years ago…
There were just a few hundred EVs in the entire world. Only the “elite” drove them.
Today, it’s a different story. There are more than a million EVs in the world.
Of course, that’s just a taste of what’s to come. By 2027, analysts estimate that there will be 27 million EVs on the road. This means that the EV market is poised to grow 27-fold over the next decade.
• And China is ground zero of this boom…
I say this because China’s by far the world’s biggest EV market.
According to Forbes, 579,000 electric vehicles were sold in China last year. That’s nearly three times more than the 198,350 EVs that were sold in the U.S. in 2017.
This year, it’s been the same story. In fact, EV sales in China more than doubled to 225,000 units in the first four months of 2018.
Of course, China’s EV market is just getting warmed up. To understand why, just look at this photograph.
It shows the skyline in Beijing, China’s capital.
You can barely make out the buildings.
Now, look at Shanghai’s skyline. It’s the same thing.
This is obviously a serious problem. The good news is that China’s trying to fix this. From Reuters:
China’s top state planner said it would tighten regulations for building new factories for traditional petrol-burning vehicles, as the country… pushes automakers to convert to non-polluting electric vehicles.
China’s central government sees electric vehicles as a way for its industry to leapfrog ahead of international competitors, that have decades more experience in making petrol cars, while also reducing intense urban smog.
And a recent Forbes article shows specific steps the country is taking today to prepare…
China plans to have 500,000 public charging piles [EV charging stations] in place by the end of 2020.
Once enough of those spaces are available, many Chinese cities are likely to go all-electric, banning internal combustion engines completely. And it is likely to happen well before 2035. One by one, China’s big cities will soon become places where people can breathe free.
In short, there will soon be millions of EVs in China.
• And each one will require a lithium-ion battery to run…
Which is why CATL’s stock exploded after it went public. Investors, both retail and institutional, desperately want a piece of this action.
Of course, CATL isn’t the only company in China trying to cash in on this megatrend. According to Reuters, there are 102 companies now making EV batteries in China.
Obviously, not all of these companies will survive. Many will go out of business.
That can make profiting off China’s EV revolution tricky.
• The good news is that there’s a better way to profit off this megatrend…
And it’s not chasing high-flying stocks like CATL.
No. I’m talking about betting on copper, nickel, and lithium.
These metals, as regular readers know, are critical to EVs.
Take copper. The average electric car requires 330 pounds of copper. That’s four times as much copper as a conventional car requires.
Then there’s nickel. It’s a key ingredient in lithium-ion batteries. In fact, CATL currently makes batteries that are 50% nickel. Eventually, it plans to manufacture batteries that are 80% nickel.
In short, the EV revolution simply can’t happen without these metals.
• Most investors don’t realize this…
They think the only way to play the EV revolution is by investing in electric car makers like Tesla… or component makers like CATL.
But speculating on these new strategic metals has proven to be an even more profitable way to cash in on this megatrend.
Garibaldi Resources, which mines nickel and copper, is a perfect example of this. It recently soared 3,622% in 10 months.
Nickel miner MBMI Resources recently gained more than 1,400% in just over a year.
Bell Copper is another example. Its stock surged 636% in under 11 months.
I could go on and on. My point is that these small mining stocks have handed savvy investors massive gains.
Now, I’m not saying you should buy these companies today. I’m merely using them to illustrate the kind of opportunity that’s staring us in the face.
And as impressive as these gains are, they’re just a taste of what’s to come. After all, we’re still in the very early stages of an EV revolution.
• So consider speculating on these new strategic metals if you haven’t yet…
The best way to do this is with the companies that mine these commodities.
I’m not an expert when it comes to finding the top names in the space—but International Speculator editor Dave Forest is.
Dave’s one of the smartest guys I know. He’s a professional geologist with 20 years of experience in the oil and gas, environmental, and mining sectors. And right now, he’s bullish on copper, nickel, and lithium—three of the key metals in the EV revolution.
Now, out of fairness to his subscribers, we can’t reveal the specific miners he’s discovered… but for a simple way to capitalize on this major trend, Dave recommends buying the Global X Lithium & Battery Tech Fund (LIT). This fund invests in a broad basket of companies involved in lithium mining, lithium refining, and battery production.
August 23, 2018
P.S. Make sure to check out Dave’s brand-new video presentation right here to learn about another major story he uncovered…
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Today, more readers write in about Doug’s recent interview on the Alex Jones ban…
Doug, thanks for this article. I agree with you on every point. It saves me opining on the same topic! How are you doing, and where are you doing it?
As far as the Alex Jones ban is concerned, it’s all par for the course and it’s nothing new. A catalyst long overdue perhaps where these media platforms unconsciously commit suicide and I’m all for it, the sooner the better. I despise them. I completely agree with Doug’s take, however, I never knew that about the First Amendment and the more I know, the more I realize how much I don’t know. Thanks to all at Casey Research, keep it up.
As always, if you have any questions or suggestions for the Dispatch, send them to us right here.
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