Thursday, May 10, 2007
Advanced Battery Technologies (ABAT)
10-K: Heilongjiang ZhongQiang Power-Tech Co., Ltd. ("ZQ"). PRC organized 2002. Officies in the cold north of Harbin. Two professors from the Harbin Institute of Technology are on the ZQ advisory board. Lots of engineers from the school.
After going through their engineering prowess, we finally get to find out what they do. This is a bad sign (I've used the Three Stonecutters story a lot when dealing with engineers).
ZQ makes polymer lithium ion batteries. Average 3.8 volts per cell. Thin configurations or large footprints. Once again, they dive into their engineering prowess of how thin the batteries can be.
Then we get to the point:
At the present time, ZQ Power-Tech produces only one finished product. This is a cordless miner’s lamp equipped with a rechargeable PLI battery.They now produce 100K lamps per year. They also sell battery cells for cellphones and laptops and digital cameras.
Three years ago, they made a 500 pound car battery for an electric car: 120mph or 240 miles.
The battery discharges 5% of its energy per hour, when not in use, so daily recharging is necessary.My guess is that's why they made it three years ago, not for the past three years.
They've been getting some business with customers: 2006 Chinese bus company ordered 5 batteries. 2006 agreed to sell hybrid car batteries to Left Coast Conversions. 2007 sales contract with Beijing Guoqiang Global Technology Development to supply 3,000 PLI battery sets for electric garbage trucks for the Olympics (I wasn't aware of the electric garbage truck event), $10 million contract.
7 Chinese patents. 1 US patent.
ADAT has 4 employees in New York. ZQ has 1,260 employees: 23 admin, 40 marketing, 40 R&D, the rest are production.
Chairman/CEO Zhiguo Fu owns 15.8% of the company.
Assets are mostly PP&E and receivables. $22.5 million in assets. $21 million equity.
$1.3 million in fairly normal looking liabilities.
Revenues leaped to $16 million from $4.2 million. Backlog is $18 million on April 11, 2007.
55% gross margins.
45% operating margins.
significant taxes being paid.
37% net margins! Excellent!
50 million shares on April 11, 2007. Lots of shares issued to employees and others for compensation. 6.5 million options outstanding? Limited to 8 million currently.
Assume 58 million totally diluted shares.
Earned 10 cents per totally diluted share in 2006. Seems like 2007 and beyond is a wildcard. This would be great if it was cheap, say less than a dollar. Let's check the stock price... $2.75. Probably a good price, but not cheap enough. It was under a dollar before March. Looking at the prior 10-Q, it wouldn't have looked as good, but still might have been interesting. Damn laziness.
Definitely worth following
UPDATE same day:
Interesting observation of the day is the global top website ranking. As you'd expect, Yahoo, MSN, Google, YouTube, Myspace are tops. Also Windows Live. But here's where it gets interesting. The 7th ranked website is in Chinese. So is the 9th. Number 11 is Yahoo Japan. Thirteen is Chinese. Number 23 is Russian. 26 is Google German. 28 is Google Brazil which is bigger than Amazon.com. In 30-39, only three are in English. Google India is bigger than eBay. Google Thailand is bigger than Dell.com. Google Portugal is bigger than the New York Times.
Non-English websites are huge. What happens when the Internet is no longer English-centric? A gigantic free-for-all mix of every sort of language, dominated by Chinese, Hindi, English, Spanish, Arabic, Bengali, Russian, Portuguese, Japanese, German, Javanese, Korean, French, Turkish, Vietnamese, and Telugu.
Most widely spoken languages:
1) Chinese Mandarin: 1,120 million
2) English: 480 million (less than half!)
3) Spanish: 332 million
4) Arabic: 235 million
5) Bengali: 189 million
6) Hindi: 182 million
7) Russian: 180 million
8) Portuguese: 170 million