DCHT in the morning e-mail; a lot of folks will hear of DCHT today!
Subject:
Stockwatch: DCH Technology
Date:
Wed, 20 Jan 1999 21:28:44 -0800
From:
list@canada-stockwatch.com
To:
DCH Technology Inc.
Company Profile
DCH TECHNOLOGY, INC. ("DCHT" on OTC - BB)
27811 Avenue Hopkins Suite 6
Valencia, California 91355
Phone: (805) 775 - 8120 * Fax: (805) 257 - 9398
IR Dept. (805) 775 - 8120 ext. 11
Website: dcht.com
IR Email mailto:DCHTinvest@aol.com
Jan 15, 1999
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.
THE COMPANY
DCH Technology, Inc. ("DCHT") is a firm that specializes in licensing and
converting new ideas and technologies into state-of-the-art products.
DCH's gas sensor products are aimed at a worldwide market with potential
sales estimated at US$2 billion per year. DCH Technology's flagship product
is the "Robust Hydrogen Sensor" (currently in production), and is aimed at
an estimated US$200 million market. DCHT's product line has been
demonstrated by independent testing labs to consistently and significantly
outperform its competitors products.
DCH'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).
DCH 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, energy, medical, waste management,
environmental, manufacturing, food, military and space.
Some current DCH customers include NASA, Ford, Westinghouse, Allied Signal,
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.
DCH has teamed with Westinghouse and the European Bank of Reconstruction
and Development to retrofit the Leningrad nuclear reactor with DCH sensors
and has already begun delivery on November 2, 1998. (see press release).
DCH 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.
DCH 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.)
Additional sources of vast untapped revenue potential are 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 DCH sensor will allow monitoring of these
hydrogen buildups and signal maintenance crews to repair the problem before
the transformer fails or explodes. DCH anticipates 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 DCH sensor is robust enough to handle this harsh environment. DCH
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. DCH Technology believes that this product could be available for
worldwide distribution and sales sometime in mid 1999. DCH 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.
Information regarding DCH Technology's stellar management teams and Board
of Directors and details on DCH's product line and news can be viewed at
dcht.com.
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: 13/16 by 31/32 Last Trade: 31/32
Included in the 7.6 million restricted shares are 5.4 million shares held
by officers, directors and insiders.
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. Its 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.
The environmental regulatory climate (re: vehicle and power plant
emissions) is one element that is driving the success of both companies.
DCH Technology and Ballard Power, as well as several other companies are
working towards developing commercially viable sources of zero-emission
electrical power.
DCHT believes that the transportation sector is not the fastest arena where
fuel cells will be brought to market. Smaller, portable fuel cells will be
brought into commercial development far sooner than the larger units being
developed to power electric vehicles and homes. In fact, DCHT sees a
near-limitless market for small, portable fuel cells to provide "portable"
electric power for the recharging of batteries and small consumer
appliances; cell phones, laptops; virtually any low power need.
The DCH PEM fuel cell is just months away from commercial introduction, and
its potential market is probably equal if not greater in size to that of
Ballard Power's larger, vehicle-oriented fuel cells. DCH Technology will be
showcasing its economically viable prototype of the PEM fuel cell at the
10th Annual National Hydrogen Association Meeting in April 1999 in Tyson's
Corner Virginia. ttcorp.com.
However, the most important factors when comparing DCHT and Ballard Power
is the size of the available markets for their respective products, and how
soon each firm's products could realistically be in commercial production.
Another significant difference in the companies is in regards to structure
and the amount of "paper out there". DCHT has about 3.4 million shares in
the active float as opposed to tens of millions for Ballard Power. Ballard
has a market cap of approximately US$ 2.1 billion (based on 81 million
shares currently outstanding at US$ 27 per share), whereas DCH Technology's
market cap is just US$11 million.
Very few investors know about DCHT, and the DCH Technology story is only
just now coming to the attention of major market players, analysts and
newsletter writers. Could DCHT be another Ballard Power in the making? We
think so!
CONCLUSION
WE BELIEVE THAT DCHT REPRESENTS A GROUND-FLOOR OPPORTUNITY FOR AGGRESSIVE
INVESTORS (WITH TREMENDOUS UPSIDE POTENTIAL)
DCH Technology, Inc. has all of the classic ingredients for major success:
excellent technical management, world class strategic alliances, diverse
products, and their proprietary fuel cell that will be unveiled April 7.
DCH has exclusive worldwide manufacturing and distribution rights to the
PEM fuel cell, which could be a multi billion-dollar industry in the next
decade. Consequently DCHT is rated as a major long term buy.
* From a technical standpoint we believe that DCHT has formed a solid
base in the US$1.00 range during the fourth quarter of 1998, and is on
the verge of breaking out of its recent trading range. We see solid
investor support (and accumulation) at current levels. Currently the
company is trading at about US$0.97 cents per share.
With increased market and investor awareness, it seems reasonable to expect
that DCHT's shares will be valued at much higher P/E multiples than is
presently the case (15 to 20 versus the current 1 to 2).
For more information, please contact
DCHT Investor Relations -
Phone: (805) 775 - 8120 ext. 11
mailto: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 sources 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. The NASD has published
information on how to invest carefully at its website.
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