Financial Health of Li-ion Companies
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Transcript of Financial Health of Li-ion Companies
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Financial Health of Li-ion CompaniesJordan BairdHC 399
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Goals1) Financial data2) Analyze the health3) Find trends
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Why Li-ion Companies?• Li-ion is a relatively new and growing market• Trends in growth industries
▫ High capital investment▫ Losing money in the beginning▫ Materials cost/production cost affects price
competativeness
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Financial Data•Public companies report financial data•Data makes up financial health•Financial ratios go one step further
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Companies•C&D Technologies - Manufacture•Valence Technology – Research and
manufacture•A123 Systems – Research and
manufacture•Enersys - Manufacture•Exide Technologies - Manufacture•China BAK - Manufacture
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And one financial statement
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Profitability•Gross Profit Margin
▫A percent profit made on each product saleCompany 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 AverageC&D Technologies 26.7% 28.7% 27.2% 23.4% 23.6% 16.1% 16.7% 14.0% 10.4% 12.7% 19.9%Valence Technology -108.6% -122.9% -77.6% -329.7% -68.5% -53.1% -47.9% 1.8% 8.8% 1.8% -79.6%A123 Systems -3.6% -17.9% -10.8%Enersys 23.9% 25.4% 23.6% 21.6% 20.7% 18.8% 21.0% 22.1%Exide Technologies 25.2% 24.0% 21.0% 21.9% 20.4% 15.3% 14.4% 16.1% 16.0% 18.5% 19.3%China BAK 25.4% 27.6% 17.6% 12.6% 20.8%
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Liquidity•Quick Ratio
▫How quick a company can pay up without needing to sell anymore inventory/productCompany 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Average
C&D Technologies 0.92 0.87 0.70 0.93 1.09 1.26 0.94 0.83 0.84 0.97 0.94 Valence Technology 1.93 1.08 0.12 0.97 0.32 0.44 0.24 0.67 0.91 0.92 0.76 A123 Systems 1.14 1.14 1.14 Enersys 0.94 0.85 0.97 0.96 0.98 1.00 1.49 1.03 Exide Technologies 0.64 0.55 0.19 0.60 0.48 0.56 0.96 1.05 1.04 1.02 0.71 China BAK 0.59 0.51 0.61 0.57
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Efficiency•Inventory turnover
▫How quickly inventory is soldCompany 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 AverageC&D Technologies 6.2 6.3 4.9 4.7 5.2 5.6 5.2 5.2 3.6 4.3 5.1 Valence Technology 1.9 6.0 2.3 4.1 5.2 5.6 9.6 3.1 2.3 2.6 4.3 A123 Systems 2.0 3.8 2.9 Enersys 6.1 6.1 6.0 6.2 5.8 5.8 5.7 6.0 Exide Technologies 3.5 4.0 4.2 4.6 4.9 5.6 5.9 6.0 6.2 5.4 5.0 China BAK 2.2 2.2 3.4 2.6
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Cash Flow Statement•Shows where cash is being spent•Three categories
▫Operations▫Investing activities▫Financing activities
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Cash Flow Statement• Most recent data,
million USD• Cash flow trends
▫ Expanding infrastructure
▫ Making money▫ Taking debt
Company Operations Investing FinancingC&D Technologies 9.3 (12.7) 0.1 Valence Technology (15.4) (3.6) 20.4 A123 Systems (35.0) (41.1) 123.0 Enersys 219.4 (46.8) (23.2) Exide Technologies 120.5 (101.1) (29.4) China BAK 2.7 (50.6) 67.2
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Summary•Profitability
▫20% margins•Liquidity
▫1 to 1•Efficiency
▫5 days•Cash from Operations
▫Making money
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Cost of Li-Ion• Does the cost of each
company’s product decrease with time?▫ Maintained margins by
lowering price
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Sales of Li-Ion• Are the companies selling
more li-ion batteries?▫ Not the companies I
looked at
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Private companies•Many companies do not publicly provide
financial data▫Tesla▫Boston Power
•Can draw rough conclusions about Boston Power’s performance▫Tesla too different for such a projection
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"Investor Relations." Valence Technology, 6 Nov. 2009. Web. 01 Dec. 2009. <http://ir.valence.com/sec.cfm>.
"Li-ion Battery Manufacturers: The Bleeding Edge of Energy Storage Technology -- Seeking Alpha." Stock Market News, Opinion, Analysis, Investing Ideas. Seeking Alpha, 22 Mar. 2009. Web. 01 Dec. 2009. <http://seekingalpha.com/article/127163-li-ion-battery-manufacturers-the-bleeding-edge-of-energy-storage- technology>.
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