DCH TECHNOLOGY, INC. ("DCHT" on OTC - BB) Jan 28, 1999
27811 Avenue Hopkins Suite 6
Valencia, California 91355
Phone: (805) 775 - 8120
Fax: (805) 257 - 9398
Website: dcht.com
IR Dept. (805) 775 - 8120 ext. 11
IR Email DCHTinvest@aol.com
DCHT is a leader in the development and production of state-of-the-art environmental monitoring and safety-engineering products for hydrogen industrial uses.
DCHT has licensed and developed a universal gas detector and has recently begun selling state-of-the-art hydrogen gas sensors, targeting a potential US$2 billion market.
DCH Technology is on the verge of commercial development of PEM Fuel Cells - a product that will revolutionize power production and transportation in the 21st century.
DCHT has published its 5 year sales forecast for the Robust Hydrogen Sensor at $105 million and $ 26 million in net profit. dch-technology.com
The above forecast does not include any of the other products currently in development making the 5 year sales forecast very conservative in our opinion.
THE COMPANY
DCHT's gas sensor products are aimed at a worldwide market with potential sales estimated at US$2 billion per year. DCHT's flagship product is the "Robust Hydrogen Sensor" (currently in production), and is aimed at an estimated US$ 200 million market.
DCHT's proprietary Thick Film Hydrogen Sensor Technology developed at the National Renewable Energy Laboratory was recently judged to have an excellent chance for success, from the US Department of Energy Hydrogen Program R&D Program Technical Peer Review, On Oct. 26, 1998 (see press release)
DCHT is strategically positioned at a time when a variety of new markets are emerging for the use of hydrogen fuel. DCHT's commercial application of proprietary technologies contributes to the safety and implementation of environmentally friendly energy technologies.
BACKGROUND
Hydrogen is explosive when it reaches just 4% concentration in air. Because so little amount of gas is needed for combustion to occur, monitoring and measuring the gas in order to activate safety control equipment or to sound an alarm is vital to avoid hazardous situations. Process monitoring based on fast and accurate measurement is also important to many process industries such as; petro chemical, glass making, energy, medical, waste management, environmental, manufacturing, food, military and aerospace.
Some current DCH customers include NASA, General Dynamics, Ford, Westinghouse, Allied Signal, Dow Corning, General Motors, Lockheed Martin Defense Systems, The US Naval Medical Research Institute, and a number of other internationally-known aerospace, automotive, nuclear and defense industry clients.
DCHT has recently teamed with Westinghouse and the European Bank of Reconstruction and Development to retrofit the Leningrad nuclear reactor with hydrogen sensors and has already begun delivery on November 2, 1998. (see press release). DCHT is in discussion with Westinghouse to team on safety upgrades to nuclear facilities throughout the world. There are between 275 and 350 nuclear power plants worldwide.
DCHT is also leading the Maritime Hydrogen Technology Development Group, which plans to retrofit a ferry in Hawaii with hydrogen power as a testing and demonstration platform. DCH's partners in the MHTDG include Pacific Marine, Allied Signal, Northrop Grumman, LANL, Thiokol, HBT and the Desert Research Institute. Risk management will be provided by Renewable Energies Group, (REG), which is a joint venture between DCH, the National Hydrogen Association, and Rode and Associates. (Ins.)
Vast untapped revenue potential lies also in the power transformer and semiconductor industries. Power distribution transformers are found on hydro poles and industrial facilities across the country. During operation, hydrogen is naturally generated in the transformer cooling oil. Elevated levels of hydrogen in the oil indicate a malfunction and/or an imminent failure. The DCHT sensor will allow monitoring of these hydrogen buildups and signal maintenance crews to repair the problem before the transformer fails or explodes. DCHT expects this to be a source of tremendous profit.
In semiconductors, when large quantities of hydrogen are accumulated in semiconductor manufacturing plants, much of it is burned off in furnaces. A sensor is needed to monitor the hydrogen accumulation in these burners. Only the DCHT sensor is robust enough to handle this harsh environment. DCHT estimates this and related process monitoring applications could potentially generate sales of $18,000,000 annually.
Building upon its own hydrogen gas sensor product line, DCH Technology has licensed the "Universal Gas Detector Technology" from Simon Fraser University. This new, state-of-the-art technology, significantly improves the sensing capability of existing gas detectors, and, with the planned introduction of new products, will open up much of the US$ 2 billion gas detection market to DCHT.
Started as an engineering safety and gas detection and sensor manufacturing company, DCHT is now teamed with the US Dept. of Energy and the Los Alamos National Lab to commercialize a small hydrogen fuel cell capable of generating from 50 watts to 500 watts, or more, of portable electrical power. DCHT believes that this product could be available for worldwide distribution in mid 1999. DCHT Chief Scientist on the project is
Mark Daugherty, Ph.D., a former LANL scientist and a recognized expert in the field of energy and hydrogen utilization technologies. Dr. Daugherty actively coordinates Cooperative Research and Development Agreements between DCH and the US Dept. of Energy.
HYDROGEN-POWERED FUEL CELLS
A fuel cell is a device that uses a fuel (typically hydrogen, although methane or natural gas can also be used) to create electricity. Hydrogen is the most abundant element in the universe; it is also one of the most energy-efficient fuels available.
Hydrogen is introduced into one side of a fuel cell; the hydrogen atom is stripped of the electron as it passes through the cell, and the electron goes through a conductor to create an electrical current. At the other end, the hydrogen atom joins up with oxygen and forms water. So, when you use a fuel cell, you create clean electric power with pure water as the only by product. Today, when investors think of fuel cells, they tend to think of Ballard Power Systems, and their R&D work in developing fuel cells to power electric vehicles.
COMPARISON WITH BALLARD POWER SYSTEMS, INC.
There are a number of interesting comparisons that can be made between DCHT and Ballard Power Systems, a company developing fuel cell power technology primarily for large stationary power systems and secondarily for many of the world's leading car and truck manufacturers.
In 1997 Ballard (BLDPF) was trading at $6.00 per share. In 1998, shares of Ballard Power soared from $10 to $188 (prior to a 3-for-1 stock split) on the Nasdaq and Toronto Stock Exchanges. Ballard Power's market cap and share price levels are attributable to investor excitement about the company following the announcement of a strategic alliance between Ballard Power and Daimler-Benz and Ford. (Both Ford and GM are DCH customers).
DCHT has its own impressive list of strategic partners from the most prestigious US National Laboratories, to five of the top ten United States Aerospace and Defense Companies. It's latest advances in the areas of fuel cell technology and remote hydrogen sensor applications are propelling this company to the forefront of a rapidly growing industry.
DCHT announced Friday, Jan 22, 1999, the election of 20 year Pennsylvania Congressman Bob Walker, the author of the $ 100 Million Hydrogen Future Act of 1996 to their Board of Directors, adding a powerful lobbying group to the DCHT cause in Washington. Bob Walker is now President of the Wexler Group, with partner Anne Wexler who has been called one of the most powerful lobbyists in all of Washington. wexlergroup.com
This is considered by us to be extremely timely because the Clinton administration on Monday, April 25, 1999 has asked Congress to authorize $ 4.05 Billion for FY 2000 to fund alternative energy research and to fight global warming. biz.yahoo.com
With the addition of Bob Walker and the Wexler Group in Washington, and DCHT Chairman Dave Haberman's already powerful connections in Washington which includes his Nov. 18, 1998 appointment to the Hydrogen Technical Advisory Panel (HTAP) to the U.S. Congress, by Department of Secretary of Energy Bill Richardson, momentum is building for a strong showing for DCHT at the 10th Annual Hydrogen Association convention outside Washington, DC on April 7-9, 1999. The keynote speaker is John E. Peterson, (R-PA) US House of Representatives Appropriations Committee.
DCH Technology will be showcasing its prototype of the PEM fuel cell at the 10th Annual National Hydrogen Association Meeting. DCHT believes that the smaller portable fuel cells are more economically viable and will be brought into commercial development far sooner than the larger units being developed to power electric vehicles and homes as a result of consumer driven market demand. DCHT sees a near-limitless market for the recharging of batteries and small household and consumer appliances; cell phones, laptops; virtually any low power need.
The DCH Technology story is only just now coming to the attention of major market players, individual investors, analysts and newsletter writers and is considered by us to be an extremely undervalued gem.
CONCLUSION
For short term traders we feel an investment in DCHT at the $1.00 to $2.00 levels provides an extraordinary low risk opportunity with an upside potential of between $5.00 and $6.00 per share short term, and between $6.00 and $9.00 per share in 2000.
For longer term aggressive investors with the appropriate risk tolerance we recommend buying up to $4.00 or $5.00 and holding for the long term.
SHARE STRUCTURE & TRADING PRICES
Shares Issued: 11 million (fully diluted)
Float: 3.4 million
Restricted: 7.6 million
52-week high: 8-1/4
52-week low: 3/16
Current bid/ask: 1 3/32 by 1 7//32 Last Trade: 1 3/32 (Jan 27, 1999 close)
For more information, please contact
DCHT Investor Relations -
Phone: (805) 775 - 8120 ext. 11
Email: DCHTinvest@aol.com
Disclaimer
RESEARCH INVESTMENT GROUP is not a Registered Investment Advisor or a Broker / Dealer. This communication (print or electronic) reflects opinions about DCH Technology, Inc. Readers are advised that this electronic publication is issued solely for information purposes and is not to be construed as an offer to sell or the solicitation of an offer to buy. The opinions and analysis included herein are based on publicly available sources that are believed to be reliable and in good faith but no representation or warranty, expressed or implied, is made as to their accuracy, completeness or correctness. This information is not intended to be used as the sole basis of any investment decisions, nor should it be construed as advice designed to meet the investment needs of any particular investor. The foregoing discussion contains forward-looking statements, which are based on current expectations and differences can be expected. The information contained herein has been obtained from publicly available sources and disseminated by RESEARCH INVESTMENT GROUP for information purposes only. In addition, the information contained in this report is not intended to be a complete discussion of information regarding some of the current and/or intended business activities of the Company. Readers are urged to consult with independent financial advisors with respect to an investment in the shares mentioned herein. Investors should review a complete information package on DCH Technology, Inc. (the "Company"), which should include, but not be limited to, the Company's annual report, quarterly report, press releases, as well as all regulatory filings. DCHT expects to become a reporting company in 1Q 1999. All information contained in this report should be independently verified with the Company mentioned herein. Any opinions expressed in this report are statements of judgment as of the date of publication and are subject to change without further notice, and may not necessarily be reprinted in future publications or elsewhere. Neither RESEARCH INVESTMENT GROUP nor its officers, directors, partners or employees / consultants accept any liability whatsoever for any direct or consequential loss arising from any use of this report or its contents. RESEARCH INVESTMENT GROUP has received a retainer fee of 50,000 free-trading common shares of DCHT from RAM Capital Management, an independent consultant to DCHT. RAM has paid for consulting services including, but not limited to this research report and its dissemination, project analysis, assistance in locating funding sources as well as evaluating and reporting on projects the Company may have acquired or seek to acquire in the future. Prior to RESEARCH INVESTMENT GROUP disseminating this information, RAM has reviewed the contents hereof. RESEARCH INVESTMENT GROUP, its officers, directors, partners, employees and consultants may profit in the event the shares of the Company increase in value. These positions may be liquidated from time to time even after RESEARCH INVESTMENT GROUP, its officers, directors, partners and employees consultants have made positive comments on the Company. THE READER SHOULD VERIFY ALL CLAIMS AND DO THEIR OWN DUE DILIGENCE BEFORE INVESTING IN ANY SECURITIES MENTIONED. INVESTING IN SECURITIES IS SPECULATIVE AND CARRIES A HIGH DEGREE OF RISK.
We encourage the reader to review the investing information available with the Securities and Exchange Commission ("SEC") at sec.gov sec.gov and / or the National Association of Securities Dealers ("NASD") at nasdr.com
Readers will be able to review the companies annual report on its web site sometime after Jan 22, 1999. As DCH is not yet a reporting company, public filings are not available from the SEC's EDGAR page. |
