Biden’s Green Bill Set To Bring $23.08 Billion Market To US.
This Small Cap Stock Is Primed To Skyrocket Thanks to Michigan “Mega Plant.”
It Manufactures A Material That’s Essential To The New Green Economy. 

July 18th, 2022, two Democratic senators engaged in hushed negotiations. These meetings were kept secret even from their own party. The topic of this discussion was a bill, one that will change the US economy forever. 

And one that, we believe, has the potential to make informed investors who act fast very wealthy. You see, this bill is one of three factors joining together to create a perfect storm for one well-positioned small-cap company. I’m talking about Graphex Group Limited (NYSE:GRFX), this little graphite company is about to be in the center of  Skyrocketing Demand, creating a seller’s market; Perfect Location, giving it a logistical edge; and an influx of Government Incentives which will cause money to flow into its market.

So how does this bill play into all of this?

These Democrats presented their bill and pushed it through. All the way to President Biden. On August 16th, 2022, the Inflation Reduction Act was signed into law. Billions of dollars in government incentives are now flowing into the market. 

The goal of this money?

Increasing the number of EVs (Electric Vehicles) on American roads.

The act gives consumers a $7500 tax credit for Electric Vehicles. But there is a catch. The lithium-ion batteries in these vehicles need to be made from materials sourced in the US or an associated free-trade country. Right now, at least 40% of the material needs to be domestically sourced to qualify. That number is going to increase over the next several years before reaching 100% in 2029. 

That’s where Graphex comes in. We’ll explain why we believe this stock is about to explode in just a minute. But first, we need to explain exactly how these government incentives work.

You see, as things stand right now, very few batteries actually meet these standards. That means most EVs don’t qualify for these credits. Consumers aren’t incentivized to buy domestic EV manufacturers’ cars. So many people are buying cheaper, foreign EVs. 

Domestic manufacturers like Tesla have a major incentive to start investing in a US supply chain.

If these car manufacturers can source more of their materials domestically, they can essentially offer a $7500 check with every purchase. If I was car shopping, I know that I’d pick the car that came with a free $7500. The best part is they don’t even have to pay for it. Thanks to Biden’s new act, the government is footing the bill.

So all these big players in the EV industry have to do, is find local suppliers. The problem is, there really aren’t any options. In fact, there are so few domestic suppliers, Tesla’s CEO, Elon Musk, has tweeted about potentially getting Tesla into the lithium mining business. 

That would certainly help them, but the batteries have to be made with at least 40% domestic materials. By mass, only 2% of the batteries are made of Lithium. They also include Nickel, Cobalt, and Manganese. But, the largest component of a Lithium-Ion battery is actually graphite. It makes up over 25% of the entire battery.

There is about to be an explosion of demand for American graphite. 

 In 2020, US firms consumed $21 million in graphite. In 2021, they nearly doubled that amount, purchasing $41 million of graphite. Keep in mind this was well before the passing of the Inflation Reduction Act. Now, with the passing of the act, US consumption is about to soar. According to a report from the White House, by 2040, graphite consumption in the clean energy sector will be 25x what it was in 2020. And, thanks to Biden, they’re going to want to buy American graphite. 

Consumption in 2020 was $21 million, multiplying that by 25 would mean that battery makers were buying over half a billion dollars worth of graphite every year. Even if Graphex could only capture a conservative 20% of the market, that would be more than double its current market cap in sales every year, and this is just from the company’s new North American Division. They also have a strong footing in the Chinese EV market.

For reasons we’ll explain in a moment, we believe that Graphex could end up grabbing a much larger share of this lucrative new market. But first, we want to explain why we believe the price of graphite is about to skyrocket. Potentially carrying Graphex along with it.

Graphite Demand Is Rising Faster Than Production.

This bill will cause a snowball effect. As more people switch over to EVs, companies will end up building more factories, selling more cars. The end result of this is that graphite consumption is going to far outpace graphite production.

It’s already started to happen. Some analysts are predicting a 37% year-on-year increase in demand for graphite by the end of 2023. This is from the battery market alone, ignoring any other industrial uses for graphite. 

“With demand for graphite from the battery sector forecast to rise by 37% year-on-year in 2023, we expect the current pricing lull to prove temporary. We see demand growth outpacing supply in the second half of 2023” -Fastmarkets research

They went on to predict increased deficits of graphite production, continuing into 2024. They anticipate another increase of 29%. That kind of growth, year after year, is unprecedented. It’s the basic laws of supply and demand. When demand goes up and supply doesn’t meet it, prices skyrocket.

 EV Megafactories Are Speeding Up, Not Slowing Down

Lithium-ion batteries, like those used for EVs, contain roughly 154 pounds of graphite. By mass, there is more graphite than any other component of an EV battery. 

Thanks to the Inflation Reduction Act, American EV manufacturers will be making more and more cars over the coming years. Requiring more and more batteries. A Bloomberg special report expects a 20% increase in EV manufacturing, which it attributes to the Inflation Reduction Act.

Austin, Texas based EV manufacturer Tesla makes that number look small. In 2022 the automaker produced 1.37 million EVs. In 2023, it plans to manufacture 1.8 million units. That’s a 31.38% increase.

I’ll walk you through the math on this. 1.8 million cars. Each with 154 pounds of graphite. That’s 277 million pounds of graphite or 125,500 tonnes. And that’s just one car manufacturer!

There are over 300 battery plants in the global pipeline. Each needing increasing amounts of graphite. As seen above, the math isn’t very hard. 

What it comes out to is Graphex being primed to explode in value. Obviously, all investments carry risk, and you should never invest more than you are willing to lose, but we believe Graphex is one of the best-looking small-cap stocks on the NYSE.

Graphex Will Benefit In A “Sellers Market”

Currently, there is effectively no competition for graphite processing in the US. Graphex expects to have its plant operational by the end of Q2 2024. Processing graphite into a highly valuable form known as Coated Spherical Graphite, or CSG. 

Spherical Graphite, also known as Battery-Grade Graphite, is the specific form of graphite used in lithium-ion battery anodes. It’s much more valuable than regular flake graphite.

Flake graphite sells for about $830/tonne. When it’s processed into spherical graphite, that value goes up to $3,500-3,800/tonne. The special form of Coated Spherical Graphite that Graphex will be manufacturing at its Michigan factory is even more valuable than this.

CSG sells for between $8,000 and $12,000 per tonne. This is dependent on the quality and the end market. Graphex products should land on the higher end of that scale. As far as quality, Graphex has also engineered its graphite Anode Material down to six microns in size. This is leaner than the industry standard of 12 to 17 microns.

North American CEO John DeMaio said; “You can give two different chefs the same raw materials, and you’re gonna get two different outcomes… We think our chefs are pretty good.” 

The prices quoted above were for the saturated Chinese market. The American market is still underdeveloped, so there is no way to know the pricing for sure. But it’s almost certainly going to be a higher-demand market with less supply. 

The factory is expected to have a production capacity of 15,000 tonnes to begin with. Once the facility is operational and supplying battery manufacturers, there is nothing keeping Graphex from expanding production.

By supplying high-quality, in-demand material, it seems like a no-brainer that Graphex could do very well. But wouldn’t it be ideal if they were in close proximity to the plants that needed their materials? It would certainly save on shipping costs.

Graphex is going to be in the middle of a Lithium-Ion hub.

CNBC predicts that by 2030, Georgia, Kentucky, and Michigan are going to dominate the EV battery manufacturing market in the USA. At this point, the US will be a major player in the global EV scene, manufacturing between 10-13 million all-electric vehicles per year. 

From this map, we can see the concentration of EV assembly locations, represented by red dots. The highest concentration of Vehicle assembly locations is going to be in Michigan. The electric battery factories will naturally form around these. And, you may ask? Just where exactly is Graphex new North American facility being built? Warren, Macomb County, Michigan. Right in the Detroit metroplex. Smack dab in the middle of the historic heart of America’s car manufacturing. Perfectly positioned to be the go-to, reliable supplier of this new wave of vehicle manufacturing. 

This proximity should give it a real cost advantage. In the US, rail freight costs about $0.044 per ton, per mile. This may not seem like a lot, but if just the 1.8 million EVs Tesla is building this year require over 125,000 tonnes of graphite, imagine an industry almost ten times that size. Every mile will count. Battery manufacturers are going to want as concentrated a supply chain as they can find. Graphex facility in Warren, Michigan will give it a clear proximity based advantage.

Graphex is Uniquely Positioned To Dominate The North American Graphite Market.

Graphex Group Limited (NYSE:GRFX) has several factors that we believe make it an investment option brimming with potential. Firstly, Graphex’s newly opened North American Division in Michigan provides the company with a logistical edge. Michigan is set to be a hub for EV manufacturers. This means that Graphex can easily and cheaply supply its customers with domestically sourced graphite for EV batteries, meeting the requirements of the Inflation Reduction Act.

Finally, Graphex’s processing technology gives it an edge over its competitors. Graphex’s processing technology can produce graphite of a higher purity and quality than traditional processing methods, making it more desirable to customers.

All of these factors combined make Graphex a major player in the North American graphite market. As demand for graphite grows due to the Inflation Reduction Act and the switch to EVs, Graphex is well positioned to capture a significant share of the market.

The Chinese Connection

Up until now, we have primarily talked about the North American division of Graphex and the amazing opportunities it represents. But Graphex Group Limited (NYSE:GRFX) is an international company and has connections overseas in some of the largest graphite and EV markets in the world. 

Graphex has strong footholds in the Chinese EV market. This market is expected to grow significantly in the coming years. In fact, Graphex is planning on quadrupling its production in China over the next 3 years. 

The graph above shows the percentage of EVs in new car registrations in China. As you can see, this market is booming.

Think of this as an added bonus and a measure of safety. Even without this new North American expansion, Graphex is already a thriving company inside of a thriving market and growing to match increased demand. In addition to this…

Graphex Undervalued Compared To Peers

Graphex currently has a value-to-earnings ratio of roughly 1:1. This means the company is worth about $1 dollar for every dollar it earns in a year. As we’ve shown you, Graphex is about to be selling a lot more graphite. If this ratio stays at a mere 1:1 that would mean a huge rise in Graphex’s value. But, we believe this ratio could go much higher.

Some of Graphex’s competitors in the graphite market have ratios over 16:1 in the case of Syrah. Or Talga, who are valued at over $37 dollars for every dollar they earn. Many of their competitors aren’t even making any sales. But some of them are still valued higher than Graphex. Keep in mind that a company’s market value does not always reflect its true value. We think that this is the case for Graphex. It is a lean, profit generating company, who was just recently listed on the NYSE. Once news gets out, there is no telling how this potentially undervalued small cap could react. 

Putting It All Together

In conclusion, Graphex Group Limited (NYSE:GRFX) is a small-cap company that has headroom for significant growth due to several key factors. Firstly, the Inflation Reduction Act is driving demand for domestically sourced graphite, and Graphex is well positioned to supply this demand. Secondly, Graphex’s processing technology and quality of product give it an edge over its competitors. Finally, as the EV market continues to grow, Graphex’s strong foothold in the Chinese market means it will be positioned well in not one, but two major players in the EV market.

This, combined with the huge upside potential of its new North American Division, make it uniquely positioned to dominate the North American graphite market. As demand for graphite continues to rise, Graphex is poised for significant growth and could be a major player in the EV industry in the coming years. Investors who act fast and invest in Graphex could see significant returns in the near future.

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We are not securities dealers or brokers, investment advisers or financial advisers, and you should not rely on the information herein as investment advice. We are a marketing company and are paid advertisers. If you are seeking personal investment advice, please contact a qualified and registered broker, investment adviser or financial adviser. You should not make any investment decisions based on our communications. On May Fourth, twenty twenty-three, in connection with our agreement with Graphex Group Corp. for a three-month agreement, EQ Analytica received one hundred dollars. Examples that we provide of share price increases pertaining to a particular Issuer from one referenced date to another represent an arbitrarily chosen time period and are no indication whatsoever of future stock prices for that Issuer and are of no predictive value. Our stock profiles are intended to highlight certain companies for your further investigation; they are not stock recommendations or constitute an offer or sale of the referenced securities. The securities issued by the companies we profile should be considered high risk; if you do invest despite these warnings, you may lose your entire investment. Please do your own research before investing, including reading the companies’ SEDAR and SEC filings, press releases, and risk disclosures. It is our policy that information contained in this profile was provided by the company, extracted from SEDAR and SEC filings, company websites, and other publicly available sources. We believe the sources and information are accurate and reliable but we cannot guarantee it.

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