Stockerati

Company Profile:

Advanced Battery Technologies (ABAT) manufactures and distributes rechargeable Polymer Lithium-Ion (PLI) batteries, which are used in mine lamps, electric automobiles, motorcycles, cell phones, notebook computers, walkie-talkies and personal digital assistance devices. PLI batteries are superior to traditional rechargeable batteries and are leak resistant, less energy dense, environmentally friendly, with high design flexibility, which allows the company to produce a battery as thin as 0.5 mm. The company is headquartered and operates primarily in China.

ABAT is a holding company and is involved in the business of PLI batteries through its subsidiaries, Cashtech Investment Limited (Cashtech) and Heilongjiang Zhong Qiang Power-Tech Co., Ltd. (ZQ Power-Tech). ZQ Power-Tech is a company based in People’s Republic of China in which, Cashtech owns 100% interest.

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Competition:

Ownership:

Shares Outstanding	49,000,000
Fund Ownership	490,000
Total# of Funds	8

Technical Analysis:

• ABAT’s beta is 1.8, slightly higher than I like. Albeit, given that it’s considered a Chinese stock, the market’s volatility does impact it. Point to be definitely considered.
• The last year the market’s been bullish on it, albeit the trends in the last 10 days have been bearish. It’s been oversold. This is a pure reflection of the investor psyche in the past few weeks—an anomaly from my point of view.
• ABAT’s 80 day resistance level is at 6.26 and if it breaks through that, there’s no reason why it won’t trade >9$, which incidentally is also its 52 week high.

My Decision:

Per my estimates the fair value of ABAT assuming conservative sector and S&P growth rates is $9-$13. Its current trading price has a 60% margin of safety— a strong selling point for me. It’s a steal and will be a great value-add to my portfolio, given it’s currently trading at $5 and change. The industries it services, namely, mine lamps, electric automobiles, motorcycles, cell phones, notebook computers, walkie-talkies and personal digital assistance devices are here to stay and are very relevant to our daily lives. It’s shown potential for aggressive growth in the past 3 years and even more through the recent downturn. It’s a survivor and I’m willing to bet on it. A BUY for my portfolio, for sure!