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

To: FMK who wrote (2383)	3/9/1998 7:52:00 AM
From: Tmoore	Read Replies (2) \| Respond to of 27311

I stumbled across RDOX Battery Technology thread on SI. Should they be considered a possible competitor in the near future? Sounds like it is a Aluminum Sulfur thin film battery. People on the thread seem to be as exited as we are. Any Thoughts?

To: FMK who wrote (2383)	3/9/1998 11:15:00 AM
From: John Curtis	Read Replies (1) \| Respond to of 27311

Fred: Thanks for the calculations, as well as the recent information. Once again you've provided some interesting data to chew on. As for that earlier posters query about "should I buy?" My answer is this. Everyone's heard that to succeed in the market you have to buy when the stock is low, and sell when the stock is high. Or, buy when there's blood in the streets(CPQ comes most quickly to mind right now), and sell when everyone's euphoric. I know, I know, as my 7 year old godchild would say, DUH!! However, IF you've employed that strategy and plunked down hard-earned cash, you must realize that FUD(Fear, Uncertainty, Doubt) will have it's way with you, almost guaranteeing a maximum uptake in TUM's. ;-) Still, buying when the stock is at, or near, its 52 week low, is perfect if you believe the stock has a viable future. But, to minimize the potential for further bad news(and one look at VLNC's history can prove how often THAT has happened), if you buy now you should only use such monies as you don't mind losing. Call it a foot in the door. You can use that initial purchase as a springboard for buying more, once the public news turns truly bright. Meanwhile, I continue to add to my speculative holdings as it enters my buy zone, which is anywhere from $4.75 to $5.20. Regards! John~

To: FMK who wrote (2383)	5/25/1998 12:23:00 PM
From: John Curtis	Read Replies (1) \| Respond to of 27311

------Valence Technology December 1998----REVISED's #'s--- Folk's, in light of all the talk now changing from IF they can produce batteries to discussions debating p.o.'s I felt it was time to pull up one of Fred's(FMK) March analysis of VLNC potential. THANKS FRED!! This will do until I, and others, can revise.... ---------- (Using 5 mln laptop batt/year/high speed line (earlier value)until 7 mln can be verified.) What should we expect for December 1998? Obviously not as much as the company had indicated in 1997. Based on their plans for adding 1 assembly line per quarter, I had projected, with an engineering approach, 5 production lines in operation by December '98. We know there have been setbacks. However, this time the company has confirmed their production schedule via press release, which should be considered a milestone. Here are some possible scenarios based on more recent information, including some calculations and the assumptions behind them. I am using the higher-margin, higher watt-hr-per-assembly-machine values for laptop batteries since it appears likely that the company will direct its efforts there. I have compared my capacity figures with others doing similar calculations. Here is the consensus: Line 1 - 2.4 mln laptop batteries/yr at 2 shifts/day. Lines 2 & 3 - 5 mln laptop batteries/yr at 2 shifts/day. The 11/97 preliminary product data sheet indicates 4mm, 6mm, and 8mm thick versions of the 4x4" cells. Energy storage is proportional to the thickness. The production rate is inversely proportional to the thickness per cell because the cells are assembled at a constant number of bi-cells/minute. The batteries/yr figures are assumed to represent the 6mm thickness which would be consistent with 6.4 mm for the single size depicted in May 97. It is further assumed that batteries consist of 3 cells, 17.5 watt/hr each for a total of 52.5 watt-hr/ battery. Sales price per battery has been recently estimated from $40 to $80. I will use $40. Profit margins will be higher for laptop than for cellphone applications. The company's early goal has been stated as 40%. I was told that 50 %to 90% would not be unreasonable for being first to market with quantity and it would be safe to assume 50%. I will use 40% regardless. The remaining factor is yield, which allows for the occasional bad batch of laminate or for a machine breakdown that makes a few hundred scrap batteries before the problem is noticed. I will use 80% for this figure. I believe the company would not be happy long-term with less than the upper 90's. In November 97 the company indicated that they were successful at 100% speed with both lines 1and 2. However, line 2 was running cellphone batteries at the time and neither was tested at 100% for an extended period. They had previously solved all known assembly machine problems at 50% speed. It would be highly unlikely not to be near 100% in December, but here are some potential earnings for a 50% speed scenario. Dec '98 - lines 1 -2 -3 50% speed at 2 shifts per day Line 1-------- 1.2 mln/yr x $40 x .40 x .8 = $15.3 mln/yr Line 2-------- 2.5 mln/yr x $40 x .40 x .8 = $32.0mln/yr Line 3-------- 2.5 mln/yr x $40 x .40 x .8 = $32.0 mln/yr -----------------subtotal--------------------- $79.3 mln/yr -----------------operating cost---------------($25.0 mln) ----------------Irish taxes-------------------($3.2 mln) -------------other taxes-----guess------------($16.5 mln) -------------net profit------$34.6 mln/23.7mln sh = $1.46/sh Here is a 100% speed scenario with 2 shifts/day Line 1---------2.4 mln/yr x $40 x .40 x .8 = $30.7 mln/yr Line 2---------- 5 mln/yr x $40 x .40 x .8 = $64.0 mln/yr Line 3---------- 5 mln/yr x $40 x .40 x .8 = $64.0 mln/yr -----------------subtotal--------------------- $158.7 mln/yr -----------------operating cost--------------($27.0 mln) -----------------Irish taxes------------------($6.3 mln) ---------------other taxes-----guess---------($40.0 mln) ---------------net profit-----$85.4 ml/23.7mln sh = $3.60/sh (cont.)