The Infineon share has risen sharply in recent months. Capped Bonus Certificates will allow returns above inflation even if the stock fails to maintain the high level.
In the past few months, the Infineon share has almost been able to neutralize the sharp price losses of the first half of 2022, when the price halved from EUR 40 to EUR 20. On February 3, 2023, the share was quoted at EUR 36.93, a new 12-month high. Although the demand for semiconductors for smartphones, PCs and servers will continue to decrease, the energy revolution and the expansion of electromobility are creating a high demand for solutions from the semiconductor group.
After the publication of the good figures for the first quarter of 2023 and the confirmation of the outlook for the current year, the majority of experts with price targets of up to EUR 48 (Barclays Capital) confirmed their buy recommendations for the Infineon share.
The investment idea
Due to the predominantly positive news situation, the Infineon share could have further potential for growth even after the strong rise in price in recent months. If you want to significantly reduce the risk of buying shares directly and still want to achieve returns above the high inflation rate, you could consider investing in a bonus certificate with a cap.
Apart from dividend payments, private investors can only achieve positive returns when buying a share directly if the price rises. Compared to direct share purchases, bonus certificates with and without a cap offer investors opportunities for annual returns in the double-digit percentage range not only when the share price rises, but also when the price stagnates or falls.
The way it works
If the Infineon share never touches or falls below the barrier of EUR 24 by the certificate’s valuation date, the bonus certificate will be repaid on March 22, 2024 with the bonus level of EUR 44.
The key data
The HSBC bonus certificate with a cap (ISIN: DE000HG72L88) on the Infineon share has a bonus level and a cap of EUR 44. The cap defines the maximum repayment amount of the certificate. The barrier activated by the valuation date, March 15, 2024, is EUR 24. With the Infineon share price of EUR 35.05, investors could buy the certificate for EUR 36.74.
The chance
Since the certificate is currently available for EUR 36.74, it enables a gross return of 19.76 percent (=18 percent per year) in 14 months if the share price has never fallen 31.53 percent to EUR 24 or below by the valuation date falls.
The Risks
If the Infineon share touches the barrier at EUR 24 and the share is listed below the cap on the valuation date, the certificate is redeemed at the closing price of the share determined on the valuation date. If this is determined below EUR 36.74, then the certificate investment will cause a loss.
This article does not constitute a recommendation to buy or sell Infineon shares or investment products based on Infineon shares. No liability is assumed for the correctness of the data.
