Suggestions for your spreadsheet.
Use 25% growth rates for both the portable computer and cellphone markets for at least the next five years (over 1999 forecasts). Furthermore, the forecast for 1999 cellphones is around 150 million units and portable computers at 15 million units. Accelerate these sales at 25% annually in future years. Incidentally, in 1998 there were about 12 million new laptops sold, and 120 million cellphones; these figures are wrong on the spreadsheet as well.
I only know of three companies that have said they can produce now, and Valence has the largest production capacity. Furthermore TNB is using cobalt cathodes, and I believe this will retard market acceptance. From what I see right now, I expect Valence will get at least 50% of the Li polymer market in 1999 and 2000. For grins, try that in your spreadsheet.
Your price estimate of $75 for Valence's laptop batteries, and $20 for the 5 WH cellphone batteries seem reasonable.
Beyond laptops and cellphones, there are markets for camcorders, PDAs, etc. I suspect that these battery markets could number in the 100 million units per year range, with manufacturer's pricing ranging from $10 for a Palmpilot unit to $20 for an extra length camcorder unit. My guess is that Li-poly's share of this market could easily exceed $200 million within two years. But if you want to make it simple, then ignore these markets for now.
Finally, I suggest you use the annual revenues and set a Valence market cap of 5-7 times revenues. This is what the S&P traded at this year, and we can avoid arguing about precise profit margins. I believe the spreadsheet margins are too low.
As other posters have suggested, use 30M shares for 1999.
Hope to see the revised spreadsheet soon.
Paul |
