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

To: Greg McDaniel who wrote (11410)	5/25/1999 8:14:00 PM
From: FMK	Read Replies (1) \| Respond to of 27311

Revised calculations on 35000 meters I was asked the significance of the shipment to Hanil. Some calculations follow. It was my understanding that shipments have been made to joint venture partners much earlier, but perhaps this is the first large shipment. I believe the 35,000 meters was shipped on rolls 2 meters wide. If you stack four 1mm thick 100x100mm sections of laminate, the resulting 4mm thick Valence laptop battery holds about 16 watt hours. A while back, Hanil published specs equivalent to about 170 watt/hr per kilogram. The 100x100x4mm cells weigh about 85g. At 170 watt hours per kilo it works out to about 14 watt hours. I have heard recent results are closer to 20 watt hours but it was unclear whether that included the phosphate improvements. At 16 watt hours for four layers, each individual 1 mm thick layer would hold 4 watt hours. Each linear meter of 2 meter wide 1 mm thick laminate would therefore hold 200 100x100x1mm thick pieces at 4 watt hours each or 800 watt hours per meter. 35,000 meters of 2 meter wide laminate should therefore store 28 million watt hours. At $2 per watt hour, Hanil should be able to sell the resulting batteries for as much as $56 million at 100% yield or as much as $50 million at 90% yield. I understand NI's 30 million annual battery capacity mentioned in the London Financial times was very conservative and the 500-550 million watt hour capacity is similarly conservative as it was based on "pre-phosphate" numbers. It is my interpretation that the numbers did not take into account the approximately 40% increase in storage capacity that Valence's patented phosphate formula is expected to add. With about 30 mln outstanding shares and over 30 mln batteries per year annual capacity expected from the NI plant, those inclined can help pass the time by calculating future revenues and profits on that one battery per share built and sold every year. How much is my 1000 shares (=1000 batteries/yr) worth at $2 per watt hour when the factory reaches its capacity? If the laminate is good enough to ship a large qty to the Koreans, the Koreans are willing to pay for it, and the Koreans wouldn't have invested $50mln and built the plant in the first place if it didn't look profitable even after handing over 50% of the profits to Valence; shouldn't Valence shareholders look forward to twice Hanil's %profits on their own batteries? Add 50% of Hanil's and Alliant's profits and it gets even better! Add royalties on various patents and formulae and it gets very much better! I have not recommended that anyone sell their stock. Again, my best to Valence shareholders.