$MVST Is A Under Radar EV Battery Play That Was Over-shorted

MVST is a fast-growing battery supplier despite being largely under the radar. The company, which started trading on Nasdaq last July, has been in the business of developing commercial vehicle batteries for more than a decade. Its batteries already power more than 30,000 commercial vehicles across 19 countries. With capacity to produce across the entire battery value chain from components to cells and packs, MVST is well-positioned for massive growth opportunities ahead. EV adoption has been expanding at a rapid rate over the past year on the back of favourable government policy support, increasing price parity to ICEs, improving range capability and extended availability of public charging infrastructure. Global EV sales are expected to grow at a CAGR of more than 35% from 3.1 million units in 2020 to 14 million units by 2025, with China, Europe and the U.S. leading the transition. MVST is currently in process of finishing its production capacity expansion across the three key regions by early 2023, which further bolsters its position in taking advantage of resulting high-growth opportunities in coming years. In terms of financial strength, the company already sits on a growing base long-term customer contracts valued at more than $2.3 billion, realizable over the next 10 years. It also boasts strong balance sheet with $572 million of cash on hand as of September 30, 2021 to fund operations and growth. MVST’s years of experience in the development of next-generation vehicle battery technologies, existing financial strength, and a robust growth outlook underscores massive upsides on the horizon. The stock, which currently trades at close to $5 with a market cap of $1.6 billion, is a bargain. It is trading at less than the value of its existing financial strength alone, let alone with consideration of what its future growth trajectory entails. Continued rapid EV adoption will be a boon for the company’s fundamental performance as well as its valuation outlook within the foreseeable future. The upcoming start of productions at its Tennessee, China and Berlin facilities will a key catalyst to watch for, as it provides more capacity for MVST to start realizing some of the revenues in its rapidly growing order bank.