The latest in a series of "puff" pieces on DCHT containing new links including Dave Haberman on the Dept. of Energy website showing his appointment to the Hydrogen technical Advisory panel by Secretary of Energy Bill Richardson,
DCH TECHNOLOGY, INC. OTC-BB: DCHT Feb. 22, 1999
27811 Avenue Hopkins #6
Valencia CA 91355
Investor Relations: 805-775-8120
IR Email DCHTinvest@aol.com
Website dcht.com
Shares Outstanding: 11 million
Float: Approx. 3.4 million
Last Price 1 5/32 Feb. 19, 1999
DCH Technology is a leader in the development and production of state-of-the-art environmental monitoring and safety-engineering products for hydrogen industrial uses.
DCH specializes in the licensing and commercialization of hydrogen sensors and other gas sensors and process monitors from such major United States National Laboratories as Sandia, Oak Ridge, Simon Fraser University and the National Renewable Energy Laboratory and is targeting an estimated US$2 billion gas sensor market.
DCH is also on the verge of commercial development of PEM Fuel Cells with the United States Department of Energy and Los Alamos National Laboratory- a product that will revolutionize power production and transportation in the 21st century.
The 5-year sales projection for the Robust Hydrogen Sensor is $105 million in revenue and $26 million in net profit. This forecast does not include any of the other products currently in development, making the 5 year sales forecast very conservative in our opinion. dch-technology.com
THE COMPANY
DCH Technology was started in 1994 as an engineering safety and gas detection and hydrogen sensor manufacturing company. DCHT's flagship product is the "Robust Hydrogen Sensor" (currently in production), and is aimed at an estimated US$ 200 million market.
DCH is tooling up to commercialize a small hydrogen fuel cell capable of generating from 50 watts to 500 watts, or more, of portable electrical power. DCH believes they'll be ready for worldwide distribution in mid 1999. Companies in Japan, Europe, and the US are readying production lines to satisfy fuel cell markets worth several billion dollars annually, in then next ten years. The total market for fuel cells was $355 million, in 1998.
BACKGROUND
The hydrogen economy is upon us. There is renewed attention on global warming and air pollution in Washington. Words like fuel cells and alternative energy sources are becoming belt-way buzzwords. On Jan. 26, 1999, two proposals were sent to Congress from the Clinton Administration; the first a $4.05 Billion request for alternative and renewable energy technology development and the second, a $3.6 Billion tax incentive package for businesses and families to use renewable energy products. Within those requests come the following excerpts; (source Reuters Jan 26, 1999)
In 2000 alone, Clinton wants federal agencies to spend $1.4 Billion to
develop solar, wind and thermal technology and better ways to store
and use hydrogen.
The tax credits and a fiscal year 2000 request for an additional $1.4
Billion in federal grants are aimed at promoting development and use
of renewable energy to slow global warming.
This is an enormous opportunity for a company like DCH who has been quietly preparing to capitalize on the rapidly growing need for gas sensors and safety systems for the emerging hydrogen economy in both the energy and transportation sectors.
But, in order for hydrogen to become widely accepted, it must first be made safe; and that's where DCH comes in. Hydrogen is explosive when it reaches just 4% concentration in air, therefore monitoring and measuring the gas in order to activate safety control equipment or to sound an alarm is vital to avoid hazardous situations.
Gas process monitoring based on reliable, fast and accurate measurement is important to many industries such as; oil refining, glass making, plastics, energy, medical, waste management, environmental, manufacturing, food, the military and aerospace. The DCH sensors meet those safety needs and requirements wherever hydrogen is present.
Some current DCH customers include NASA, General Dynamics, General Electric, 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 companies.
DCH is also teamed with most of the major US National Labs including Sandia, Los Alamos, Oak Ridge, Simon Fraser University and the National Renewable Energy Lab.
Ex. ic.ornl.gov
DCH is also teamed with Westinghouse and the European Bank of Reconstruction and Development to retrofit the Leningrad nuclear reactor with hydrogen sensors. DCH began delivery on November 2, 1998. DCH is still in discussions with Westinghouse to team on safety upgrades to nuclear facilities throughout the world.
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 include Pacific Marine, Allied Signal, Northrop Grumman, LANL, Thiokol, HBT and the Desert Research Institute.
DCH believes that there is vast untapped revenue potential 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. DCH sensors will allow monitoring of these hydrogen buildups and signal maintenance crews to repair the problem before the transformer fails or explodes. DCH expects this to be a source of tremendous profit.
dch-technology.com
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.
HYDROGEN-POWERED FUEL CELLS
DCH is teamed with the US Dept. of Energy and the Los Alamos National Lab to commercialize the PEM Fuel Cell.
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.
Fuel cells create clean electric power with pure water and a little heat 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.
While there are a number of interesting comparisons that can be made between DCH and Ballard, Ballard is primarily developing fuel cell power technology for large stationary power systems, and secondarily for transportation while DCH is focussing on the smaller consumer sized design for "portable" or remote electric power.
From the spring of 1995 to 1998, shares of Ballard Power soared from $ 4.00 to $ 44.00 (adj. 3-for-1 stock split) on the Nasdaq and Toronto Stock Exchanges. Ballard's $2.1 Billion market cap and share price levels are attributable to investor excitement following the announcement of a strategic alliance and large investment in Ballard by Daimler-Benz and Ford to make fuel cells for cars, buses and trucks.
We believe the same thing can happen for DCH as they too are in discussions with Ford and General Motors to supply sensors and gas detectors to the emerging, alternative fuel vehicle and transportation industry. Excerpted from a DCH May 19, 1998 press release; David Haberman, VP of technology and planning stated,
"DCH's proprietary hydrogen and natural gas sensors provide fast,
accurate gas measurement that is necessary for both integrated safety
and feedback control in refueling systems. The transportation
applications demand chemical selectivity to prevent false signals and the
Robust Hydrogen Sensor and Universal Gas Sensor are both designed
to provide high signal confidence. Based on our discussions with Ford
and General Motors, we believe that the use of DCH equipment in the
production of these vehicles, on-board these vehicles and in the
refueling infrastructure will be specified by both OEMs and the evolving
regulations." dch-technology.com
DCH's advances in fuel cell technology and remote hydrogen sensor applications are propelling this company to the forefront of a rapidly growing industry at a time when the industry is getting hot!
LATEST DEVELOPMENTS
Feb. 17, 1999 DCHT has been selected by Antaeus Corporation for incorporation into its technology suite for use in its ''smart'' bridge monitoring system. DCHT will provide its proprietary Hydrogen Sensors to be used for corrosion detection associated with aging bridge structural members DCHT estimates this application at over $1 million in annual revenue going into the millennium. There are over 577,000 bridges in the U.S. transportation infrastructure and the average bridge is 54 years old. Last year, the U.S. Government spent $5 Billion maintaining and rehabilitating bridges. biz.yahoo.com
Feb. 11, 1999 DCHT and Freewing Aerial Robotics Corp. have begun a development program to integrate Hydrogen PEM Fuel Cells into the Freewing Tilt-Body Unmanned Aeronautical Vehicle (UAV). sdcd.gsfc.nasa.gov
Freewing's air vehicles have extremely short takeoff and landing capabilities, which are in demand in both military and the emerging commercial marketplaces with total market demand estimated at between $2 to $4 Billion. This fuel cell integration is a milestone in both aerospace and hydrogen energy sectors. biz.yahoo.com
Feb. 9, 1999, DCHT shipped its first new Deuterium Process Monitor System. Deuterium is a heavier variety of hydrogen and is used in both industrial and nuclear operations. This is a major breakthrough in environmental safety and gas monitoring for the telecommunications and semiconductor industries, just to name a few. This unique product was produced in co-operation with the Dept. of Energy National Laboratory.
AlliedSignal was selected by DCH to fabricate these devices.
dch-technology.com
Feb. 5, 1999, DCH completed a comprehensive review of all of its safety and process monitoring systems, at the request of a major US Aerospace and Defense company, to verify that all DCH products are Y2K compliant. They are.
dch-technology.com
Feb. 5, 1999, Congressman John Peterson (PA-05) has accepted an invitation to give the keynote address at the National Hydrogen Association Annual Meeting. With participants from 15 nations, the upcoming meeting is expected to be the largest American meeting to address Hydrogen Energy as a viable alternative for America's future energy needs. house.gov
Jan 22, 1999, DCH announced 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. Bob Walker is now the president of the Wexler Group, with partner Anne Wexler who has been called one of the most powerful lobbyists in all of Washington. (source wexlergroup.com
This is considered by us to be extremely timely for DCHT with the looming $ 4.05 Billion proposal for FY 2000, to fund alternative energy research to fight global warming, and the $3.4 Billion in tax incentives proposed by the Clinton Administration.
DCH Chairman Dave Haberman is also no stranger in Washington. On Nov. 18, 1998 he was appointed to the Hydrogen Technical Advisory Panel (HTAP) to the U.S. Congress, by Dept. of Energy Secretary Bill Richardson. eren.doe.gov
HTAP reports to Congress on the Department of Energy's implementation and appropriations pursuant to the Hydrogen Future Act authored by Bob Walker and signed into law in 1996.
DCH Chairman Dave Haberman is the 1999 President of the California Hydrogen Business Council, which is active in promoting the growth of hydrogen and also coordinates with and supports the goals of the National Hydrogen Association.
wmrs.edu
With the recent initiatives by industry and now government, momentum is building for a strong showing for DCHT at the 10th Annual Hydrogen Association convention at Tyson's Corner, Vienna, VA on April 7-9, 1999.
DCH Technology will be showcasing its prototype PEM fuel cell at the convention along with its full family of sensors. DCH believes that their 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, thus giving DCH a major competitive edge over Ballard and other fuel cell developers.
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 with an unlimited upside potential.
Trading Strategy
For short-term traders we feel an investment in DCHT below the $2.00 level, provides an extraordinary low risk opportunity with a short term upside potential to the $3.50 to
$ 4.50 resistance level.
For long term aggressive investors with a high-risk tolerance we recommend buying up to $5.00 and holding for long term price appreciation into the $12.00 to $15.00 level, or more in Y2000.
Market Cap Comparisons as of Feb. 15, 1999
BLDPF $2 Billion plus
MKTY $140,000,000
PWRE $ 36,000,000
MHTX $ 40,000,000
DCHT $ 11,000,000
Note: Price projections are based on the multiples of comparable companies in the fuel cell sector, as there is no basis for comparison in the hydrogen and gas sensor industry.
For more information contact:
Steven Oshinsky, GM
RAM Capital Management
RAMCapMgmt@aol.com
Fax: 561-394-9695
DISCLAIMER: The information and opinions in this report were prepared by RAM Capital Management; an independent private consultant. RAM does not undertake to advise you of changes in its opinion or information. RAM and others associated with it may make markets or specialize in, have positions in and effect transactions in securities of companies mentioned and may also perform or seek to perform investment banking services for those companies. RAM and/or their affiliates or their employees have or may have a long or short position or holding in the securities, options on securities, or other related investments of issuers mentioned herein. As of Feb 8, 1999, RAM has received compensation for advisory services of 100,000 shares of DCH Technology and a monthly advisory fee of $ 5,000. The investments discussed or recommended in this report may be unsuitable for investors depending on their specific investment objectives and financial position. Where an investment is denominated in a currency other than the investor's currency, changes in rates of exchange may have an adverse effect on the value, price of, or income derived from the investment. Past performance is not necessarily a guide to future performance. Income from investments may fluctuate. The price or value of the investments, to which this report relates, either directly or indirectly, may fall or rise against the interest of investors. Private investors should obtain the advice of a qualified professional about their investments. Do not use this report as the basis for an investment in DCHT. Nothing herein shall be construed as investment advice. Statements contained herein are made as opinions and are not endorsed by the company. Nothing to the contrary is implied or intended. In the opinion of RAM, only accredited investors who have the financial capability to withstand the entire loss of their investment should consider trading in or investing in OTC BB securities. RAM assumes no liability from the unauthorized posting or reprinting or downloading of this report to or from any electronic or Internet related forum. |
