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Science/Tech See other Science/Tech Articles Title: Stock touters and skeptics This is now the second time we’ve seen a “nighttime solar energy” pick from the folks at Angel Publishing — last time it was for a solar spray-on film innovation, in a pitch for Green Chip Stocks Premium where they claimed that a company had “perfected sunless solar,” and this time it’s a pitch from Alternative Energy Speculator for a battery company that lets us use “solar at night.” Here’s how this latest ad launches into our noggins: “Chinese Researcher Unveils Nighttime Solar Energy At Private Investment Conference “On July 12th, Henry Chiang presented the world with a way to power entire countries using solar at night… “His secret technology, and the tiny startup firm that owns it, could earn you the easiest $131,500 you’ve ever made.” I almost stopped reading right there, because, well, I really really really want to make an easy $132,000. But perhaps I can settle for a touch less? Let’s see who this Henry Chiang is, and what the stock is that Nick Hodge is teasing us about. (And yes, I know that Nick Hodge was also the one who played a big role in pumping up the share price of AEHI, the nuclear scam, before it got shut down by the SEC … I’ll be generous and assume that he got buffaloed by that one in his excitement to tell an enriching story, he has, to be fair, also teased some ideas that turned out well). So here’s what happened at this “unveiling:” “… on July 12, 2010, he delivered a 23-minute speech in which he unveiled a technology he’d been waiting for the perfect time to reveal. “So, as nearly every member at the Global Hunter Securities Conference sat on the edges of their seats, Henry Chiang described several key details of a project he’d been working on for years… “A viable way to use solar power at night.” Huh? Makes you wonder why none of us heard about this incredible-sounding project, eh? Hodge goes on to tell us some of what many have probably already heard about solar power — that the sun is powerful enough to easily supply all the energy the planet needs, but that it hasn’t been stored efficiently enough to get anywhere near that promise, and that energy storage will be a key area of investment in the decade ahead. Stands to reason, after all — one of the key problems with solar and wind power is that it’s not constant, like burning coal can be, so you need some way to store energy, something the regular power grid really just can’t do. And we’ve seen plenty of promises about energy storage — most rely on batteries, as you might expect, and on advancing into more and more efficient and cost-effective battery designs, but there are other ideas too, including hydro storage (pumping water into a dam, then feeding the water back through the dam to run turbines when needed) and flywheel power (remember Beacon Power? I wrote about a “next great thing” teaser for that company about three and a half years ago, since which they’ve been grinding along to actually opening a plant and generating revenue … and their investors have been ground up, too). This tease, though it is masked in a story that seems much larger than the company itself, is all about batteries, too — specifically the fairly boring old NiMH batteries and some advancements that one company has apparently made in their design. Oh, and Hodge tells us that in his brief presentation Henry Chiang “made coal and oil obsolete.” No, stop laughing! Come on, that’s just mean. Let me share a longer excerpt that gives some of the flavor of what Hodge says about this Chiang character — with, naturally, a couple lil’ clues thrown in for your friendly neighborhood Gumshoe: “What he shared with the crowd at the Global Hunter Securities conference was his company’s progress on a rechargeable energy unit known as the NiMH (Nickel Metal Hydride) battery. “Once thought of as a battery good only for powering calculators and watches, Henry has helped take this technology to an entirely new level. “In fact, as I write this, his company has produced batteries that can run cars, planes — even a series of homes. “And while there are hundreds of startups across the world looking to jump into the market… “They don’t have anywhere near the experience to produce batteries that have the same recyclability, high power, high energy density, and long life that Henry’s batteries have. “But the company I’m telling you about today isn’t a one-trick pony… “Over the last decade, they’ve perfected several types of high-tech batteries — from the NiMH model I’ve told you about to lithium ion batteries. “In fact, they’re already distributing them in Europe, North America, and Asia. “And with several subsidiaries working on new ways to use batteries (like producing full-scale nighttime solar), not to mention their accredited R&D department, the company is about to spring from its Chinese headquarters to be the biggest battery company on earth.” And then Hodge drew a connection that seems quite stretched to this particular observer — he quoted the New York Times as saying that “We are on the verge of the perpetual flight” in recounting the story of the Solar Impulse, a solar-powered plane that circumnavigated the globe right around when Chiang made his “famous” speech. The Solar Impulse, in case you didn’t hear the story, is one of a long chain of developments in solar flight — their accomplishment was not just flying a plane on solar power, but in doing so in manned flight, which is a big deal principally because of the weight of the person, and also doing so with stored energy in the form of batteries when the sun wasn’t shining. Of course, this isn’t the kind of thing that changes the world overnight — the Solar Impulse had a wing about the size of a commercial jetliner in order to get enough solar panels and lift, was made of carbon fiber, and ran on just four10 hp electric engines. Still, this did approach “perpetual flight” since the solar energy apparently provided enough to recharge the batteries and fly the plane. I may have gotten some of the details of that flight a bit wrong, but you get the gist: Boeing won’t be putting 140 seats on one of these anytime soon. So this Solar Impulse project may or may not have anything to do with Henry Chiang and his “blockbuster speech.” Nick Hodge prefaces that Solar Impulse story by saying that … “On July 8th (four days before what will no doubt be remembered as the famous speech Henry delivered at the Global Hunter Securities conference), it was proven that his technology is the closest we’ve ever come to infinite power.” I think we might want to quibble about that “his technology” bit, since I see no indication that this particular company’s NiMH technology was used on the Solar Impulse (the only mention I saw on Solar Impulse’s site was of lithium ion batteries, though they weren’t very specific — the batteries were clearly not a big part of the project relative to the airframe and solar array design). But I’m pretty sure that Hodge must be teasing a little company called Highpower Technology (HPJ — formerly called Hong Kong Highpower Technology). And yes, if I’m right the whole rest of the advertising piece sounds like a bit of a stretch, frankly. HPJ does have some advancements in NiMH batteries, and their CFO has been making the rounds of investor conferences touting those advances, but they sound on the surface like they’re really evolutionary rather than revolutionary (remember, this is coming from your friendly neighborhood Gumshoe, and I ain’t no expert on battery technology). They do sell rechargeable batteries, and they’re reportedly a supplier to some brands you’ve undoubtedly heard of, like Energizer. The particular advance that HPJ has apparently been trumpeting in these investor conferences — and I assume that includes the conference presentation that Nick Hodge is teasing us about, at which they did have a half-hour slot for a presentation by a dude named Henry (name changing is a standard ploy by these teaser-meisters, so it should come as no surprise that it was CFO Henry Ngan, not “Henry Chiang,” who presented for HPJ). The brief description of their Ready to use (RTU) advancement in NiMH batteries is in a press release here — sounds fairly impressive, though I don’t know what the previous level of advancement was (the primary claim of this rechargeable battery seems to be longer life — 85% charge after a year, and capable of 1,500 charges). It’s hard to believe that Sanyo or Panasonic or even China BAK or BYD is quaking in its boots at the reading of that press release, but perhaps the accomplishment is greater than it appears to little ol’ me, even if it hasn’t gotten much attention from investors or the press. So no, there isn’t a “Henry Chiang” if I’m right about this one — and the Henry that is part of this company and doing the presentations likely isn’t the scientist who’s trying to improve the NiMH battery (he is, after all, the CFO — not likely to spend a lot of time in the lab). There are, however, other good matches — beyond the fact that this company is advancing NiMH batteries, as teased, and did a presentation at the exact conference teased. They also were given what Hodge calls a “Technology Innovation award” — the teaser includes a little spiel about the award this company won, calling the certificate a “holy grail” and includes the image of the actual certificate that they won. And that image happens to be, to my eye at least, lifted directly from HPJ’s press release on their website. In this case it’s a local award in Shenzen that they call the “”Innovation Award 2008 in Shenzhen” that appears to be related to their NiMH accomplishments and patent. Maybe all the innovation awards they give out look the same, but this one seems to have even the same characters and identifying numbers on it, though my eyes ain’t as good as they used to be. I don’t know if it’s really a “holy grail” or not, though Nick Hodge goes on to mention several other companies that have won or “been considered” for innovation awards and the huge stock performance they’ve seen — which seems to be a bit of a stretch if you wish to imply that the performance of ABB (ABB) and Riverbed (RVBD) following the “innovation awards” those two entirely unrelated companies won in 2005 will follow at HPJ. Back to some semblance of reality, HPJ is, as I noted, tiny and in a business dominated by giant Asian conglomerates — it has a market cap of less than $50 million and, according to Yahoo Finance, is a little more than 50% owned by insiders and controlling shareholders according to their last 10K (Mostly the CEO, who owns about a third of the company, and two VPs). It’s also profitable, with a trailing PE of about 8. There’s only one analyst, so take the forecast with a big ol’ grain of salt, but that analyst thinks they’ll earn more next year, giving them a forward estimated PE of about 5. Do note that “smaller than $50 million” bit — that means that if I’m right about Hodge touting this stock, it could go up pretty dramatically just from that attention … and even if I’m wrong, the fact that I’m mentioning it in this space for the thousands of eager Gumshoe readers could certainly impact the share price as well (probably another reason, if you wish to psychoanalyze the Gumshoe, that I tend to be more skeptical when writing about these tiny stocks — I’d rather not pump up the shares for no reason). If so, the bump that share prices get from brief spurts of attention from folks like Hodge or yours truly is unlikely to last long, so don’t get excited and jump aboard because you’re afraid you’ve missed the train. This one was a little tricky to suss out and it’s a new teaser, as far as I can tell, so it’s not surprising that the stock is down on China news more than it’s up on Nick Hodge attention, down better than 4% today so far — though that could certainly change. So … on my admittedly quick glance at the stock that I think must be Nick Hodge’s heavily teased pick, I see a company that sells NiMH batteries, that might have some sort of innovative design that improves such batteries, and that is profitable and appears reasonably priced. I find it hard to get from there to an earth-shaking profit moment, and it’s always worthwhile to be at least a little bit suspicious of tiny Chinese companies whose innovations are primarily covered in their own press releases, but that doesn’t mean it’s impossible that this could become a much bigger player in the battery business. It is, at least, a lot cheaper than many of the dramatically overhyped lithium ion battery companies we’ve seen before.
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