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

To: P. Ramamoorthy who wrote (7316)	1/22/1999 12:06:00 AM
From: FMK	Read Replies (1) \| Respond to of 27311

I.N.Vestor & Ram, thanks for your follow up posts regarding Matsushita. I was timed out on editing so this is a re-post with corrections. I agree that there may be a connection with Valence. However, if they were going with their own technology and using manganese oxide cathode material, there may be some patent and royalty considerations. Regardless, the news release states that they are "aiming at a monthly output of 300,000 units." nni.nikkei.co.jp The thickness was stated as 3.6 mm which is roughly 4 Valence bi-cells. One of Valence's high speed assembly machines is capable of 240 bi cells per minute or 80 of these 3.6 mm batteries per minute. Running non-stop it would amount to 115,000 per day. Realistically, lets say 100,000 per day maximum. Matsushita's "intended" 300,000 per month seems equivalent to what Valence might have done last year with their small pilot line in Henderson. A year later, just one of Valence's high speed lines should be able to turn out Matsushita's "intended" monthly output in just 3 or 4 days, leaving another 26 or so days per month to make other higher watt-hour products that are therefore more profitable. I remember doing a similar comparison with T&B or one of those with a small monthly output. Perhaps Sanyo has a new line of calculators, cellphones or other portable devices that Matsushita supplies components for. Regardless, its good to see Li-polymer becoming accepted for more applications. I have a feeling that such applications are growing at a tremendous rate and almost anyone that can turn out workable batteries can sell them. A company such as Valence that can turn out huge quantities of higher-performance batteries should have a very bright future, especially if competition can sell batteries for $6 per watt hour and we have been figuring that Valence's first 3 lines can produce over 250 million watt hours per year and over 500 mln watt hours for six production lines. Lev indicated last August that he expected $2.50 per watt hour for laptop batteries. 500 mln wh x $2 ($1 billion revenue) seems ample for six production lines. If we use Matsushita's stated 1300 yen/$113 per yen for a 1.85 watt hour battery, they would sell them for $6.25 per watt hour. At Matsushita's prices, Valence's six-line annual capacity would be worth $3,125,000,000 per year or about $105 per share in revenue! At 33% it would amount to about $34 profit per share and a 25 PE would indicate an $875 share price, just from six Valence production lines! Remember that these are estimated maximum capacities for six Valence production lines. To be conservative, we should probably shouldn't use any more than 1/4 these estimates($218 per VLNC share at Matshushita's watt hour pricing.) Maybe still worth investing in at present levels! Thanks Matsushita for shedding some light on Valence's future!