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Technology Stocks : VALENCE TECHNOLOGY (VLNC) -- Ignore unavailable to you. Want to Upgrade?

To: Tickertype who wrote (13702)	8/13/1999 12:35:00 PM
From: P. Ramamoorthy	Read Replies (3) \| Respond to of 27311

Tickertype, Thanks for posting the transcript. Helped me a lot. Here is one interpretation (somewhat similar to one posted): on an annualized basis of $75MM production rate means (to me) that after the installation of minor equipment arriving in the next week or two, the VLNC plant will be capable of producing $6MM per month, up from the current $1-2MM (?) per month. Lev cautions: it does not mean VLNC will SELL $6MM/month. ACTUAL sales will depend upon OEM's. He has already discounted Hanil's estimated demand down to $18MM in the next year. the annualized basis of $250MM production rate meant (to me) that with the additional investment of $10-11MM of VLNC funds and $20MMplus from IDB for the installation of a third line arriving in the next month (and after installing the equipment on the back end to balance production on all three lines) VLNC plant will be capable of $20MMplus/month production rate. Again, Lev cautions: these figures do not mean ACTUAL sales. So, use caution in speculating earnings. The bottleneck is the OEM's time lag for product design, beta testing and test marketing. VLNC does not control this and Lev is going for this approach for ramping up production. I speculate that there will be small PO's from many OEM's throughout the next year. For example, this months's production has been spoken for. The amount of order will depend upon OEM's product type and marketing strategy. In other words, I do not expect announcement of LARGE PO's in the near future (say 6 months or so) for the laptop 4"x4" batteries. There may be small orders but not the big ones. I may be wrong. The key for immediate sales is Hanil jv. Hanil may go after large orders for cell phones (and consumer electronics, e.g. portable DVD players) that do not need extensive redesign. Cell phone sales are expected to "explode" in Asia, especially in China. I speculate that VLNC will spend the next 6-12 months trying to get their plant in good shape, optimize the yield and quality, complete several OEM's product designs, improve their cash flow, etc. VLNC has blocked the sale of machines to others and has no interest in licensing now. I would rather wait and see these events unfold. It may take the next 10K to realize the stock's potential. Ram