Advanced Battery (PINK:ABAT)

EW YORK, Oct. 27, 2011 (GLOBE NEWSWIRE) -- Advanced Battery Technologies, Inc. (Nasdaq:ABAT), a leading developer, manufacturer and distributor of rechargeable Polymer Lithium-Ion (PLI) batteries as well as a manufacturer of electric vehicles, today announced that the Company's subsidiary, Wuxi ZhongQiang Autocycle Co., Ltd. ("Wuxi ZQ") received a $6.3 million line of credit.

On September 14, 2011 the Bank of JiangSu approved a credit line for Advanced Battery Technologies, Inc. subsidiary, Wuxi ZQ. The credit line authorized Wuxi ZQ to borrow up to 40 million Renminbi ($6.3 million). Each loan will have a term of one year and bear interest at 110% of the Bank's basic loan rate. The loans will be secured by a pledge of the land and facilities used by Wuxi ZQ. 

On October 21, 2011, Wuxi ZQ borrowed 20 million RMB ($3.1 million) pursuant to the credit line. The initial interest rate is 7.216%, which will be adjusted monthly to remain 10% above the Bank's basic rate. The principal amount of the loan will be payable on October 21, 2012. 

The chairman of the Board, Mr. Fu, stated, "We are pleased to announce this transaction. This line of credit exemplifies the credibility and strength of our organization within the banking community. We plan to use these funds to continue to improve the productivity and efficiencies of our motorized vehicle facilities."

ABAT: 2Q11 Earnings Update

2Q11 Earnings: ABAT reported its 2Q11 results revenue and net income of $31.4 MM and $10.3 MM, with diluted EPS of $0.12, compared to our expectations of $35.8 MM for the top-line, $8.9 MM for the bottom-line, and $0.11 for diluted EPS. The $10.3 MM net income includes $2.2 MM gains from change in value of warrants. Earnings would be ~$8.6 MM or $0.10 per share if excluding that non-cash gain. ABAT had a backlog of ~$61.2 MM for delivery throughout the next 6 months, including a battery backlog of ~$33.0 MM. The company ended 2Q11 with $74.0 MM of cash and $103.5 MM of working capital.

Revenue Mix: By segments, battery sales contributed $18.1 MM or 58% of total, increased by 73.2% Y-o-Y and 14.04% sequentially. This was mainly driven by the revenue contribution of $5.3 MM from newly acquired Shenzhen ZQ. Electric Scooters accounted for $13.2 MM or 42% of total sales, growing by 4.6% Y-o-Y. Within battery segment, small capacity, medium capacity, large capacity, and miner’s lamp each generated $6.8 MM, $6.0 MM, $4.3 MM, and $1.1 MM in sales, accounting for 22%, 19%, 14%, and 3% of total.

Lower Gross Margin Driven by Shenzhen’s Contribution: ABAT generated 42.8% gross margin in 2Q, a 554 bps drop from 2Q10. Management attributed this sharp decline in GM to a higher revenue contribution from the newly acquired Shenzhen ZQ’s small capacity battery products, which carry a lower GM.

Bottom-line Flat Y-o-Y After Adjusting for Warrants: GAAP earnings of $10.3 MM for the quarter was lower than $12.5 MM in 2Q10. However, after adjusting for the change in value of warrants, earnings would be $8.6 MM, flat compared to $8.6 MM in adjusted earnings in 2Q10.

Financial Estimates: For 3Q11 we are now projecting $35.9 MM for revenue, $9.2 MM for earnings, and $0.11 for EPS. For full year FY11, our estimates are now $132.0 MM, $45.6 MM, and $0.55, respectively. We are also introducing our FY12 estimates of $162.8 MM, $40.8 MM, and $0.48. If excluding the change in warrant value, full year FY11 and FY12 earnings would be $36.6 MM and $40.8 MM, or $0.44 and $0.48 per diluted share.

Valuation: We maintaining our Market Perform rating on ABAT. We believe growth in Shenzhen ZQ segment should pressure overall margins and limit the opportunity for EPS appreciation in the near term. In addition uncertainties driven by the allegations against the company still remain an overhang.

Risks – (1) Intense Competition (2) Country Risk (3) Volatility in raw material prices (4) Inflation in labor cost (5) Weaker-than-expected demand from European customers.

Notice Regarding Privacy and Confidentiality:


This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.

Notice Regarding Privacy and Confidentiality:


This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member SIPC.
Member FINRA.

Rodman and Renshaw on ABAT                  8/22/2011

ABAT: 2Q11 Earnings Update

2Q11 Earnings: ABAT reported its 2Q11 results revenue and net income of $31.4 MM and $10.3 MM, with diluted EPS of $0.12, compared to our expectations of $35.8 MM for the top-line, $8.9 MM for the bottom-line, and $0.11 for diluted EPS. The $10.3 MM net income includes $2.2 MM gains from change in value of warrants. Earnings would be ~$8.6 MM or $0.10 per share if excluding that non-cash gain. ABAT had a backlog of ~$61.2 MM for delivery throughout the next 6 months, including a battery backlog of ~$33.0 MM. The company ended 2Q11 with $74.0 MM of cash and $103.5 MM of working capital.

Revenue Mix: By segments, battery sales contributed $18.1 MM or 58% of total, increased by 73.2% Y-o-Y and 14.04% sequentially. This was mainly driven by the revenue contribution of $5.3 MM from newly acquired Shenzhen ZQ. Electric Scooters accounted for $13.2 MM or 42% of total sales, growing by 4.6% Y-o-Y. Within battery segment, small capacity, medium capacity, large capacity, and miner’s lamp each generated $6.8 MM, $6.0 MM, $4.3 MM, and $1.1 MM in sales, accounting for 22%, 19%, 14%, and 3% of total.

Lower Gross Margin Driven by Shenzhen’s Contribution: ABAT generated 42.8% gross margin in 2Q, a 554 bps drop from 2Q10. Management attributed this sharp decline in GM to a higher revenue contribution from the newly acquired Shenzhen ZQ’s small capacity battery products, which carry a lower GM.

Bottom-line Flat Y-o-Y After Adjusting for Warrants: GAAP earnings of $10.3 MM for the quarter was lower than $12.5 MM in 2Q10. However, after adjusting for the change in value of warrants, earnings would be $8.6 MM, flat compared to $8.6 MM in adjusted earnings in 2Q10.

Financial Estimates: For 3Q11 we are now projecting $35.9 MM for revenue, $9.2 MM for earnings, and $0.11 for EPS. For full year FY11, our estimates are now $132.0 MM, $45.6 MM, and $0.55, respectively. We are also introducing our FY12 estimates of $162.8 MM, $40.8 MM, and $0.48. If excluding the change in warrant value, full year FY11 and FY12 earnings would be $36.6 MM and $40.8 MM, or $0.44 and $0.48 per diluted share.

Valuation: We maintaining our Market Perform rating on ABAT. We believe growth in Shenzhen ZQ segment should pressure overall margins and limit the opportunity for EPS appreciation in the near term. In addition uncertainties driven by the allegations against the company still remain an overhang.

Risks – (1) Intense Competition (2) Country Risk (3) Volatility in raw material prices (4) Inflation in labor cost (5) Weaker-than-expected demand from European customers.

Notice Regarding Privacy and Confidentiality:


This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.

Notice Regarding Privacy and Confidentiality:


This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member SIPC.
Member FINRA.

GeoTeam® Note: First quarter 2011 vs. 2010 Adjusted EPS wsa $0.09 vs. $0.12

Zhiguo Fu, Chairman and CEO of Advanced Battery Technologies, said: "We are heartened by the continual growth of our operating income, which demonstrates the success of our expansion efforts. Although the growth of operating income lagged the growth of revenue, due to low margins on our small capacity batteries, our current expectation, is that, in time, the advanced technology and facilities that we acquired from Shenzhen ZQ, along with our established customer list, will allow us to achieve worthwhile margins in the small capacity battery sector. For that reason we expect that the focus of operations at the Dongguan industrial park that we currently have under construction will be in large part on small capacity batteries. This, coupled with our steady growth in the large capacity battery sector, should give us a solid platform from which to build a strong position in the international battery market."

NEW YORK, June 30, 2011 (GLOBE NEWSWIRE) -- Advanced Battery Technologies, Inc. (Nasdaq:ABAT), a leading developer, manufacturer and distributor of rechargeable polymer lithium-ion batteries as well as a manufacturer of electric vehicles, announced that its Board of Directors today unanimously approved a share repurchase program that authorizes the Company to repurchase up to $10 million of the Company's common stock in the open market. Purchases will be made at the discretion of management, with the timing dependant on prevailing market conditions. The goal of the program will be to increase the per-share equity of the remaining shareholders. 

Chairman of the Board and CEO Mr. Fu Zhiguo stated: "Over the past three months we all have witnessed the dramatic decline in the market price of our common stock driven by online reports inaccurately depicting the Company's financial and production status.   We continue to stand by the accuracy of our public filings and we steadfastly stand by our quality products and by the good people that work so hard to produce them. Our confidence in ABAT is made evident today by this share repurchase program. We want to again thank our shareholders for their support through these trying times."

NEW YORK, June 6, 2011 (GLOBE NEWSWIRE) -- Advanced Battery Technologies, Inc. (Nasdaq:ABAT), a leading developer, manufacturer and distributor of rechargeable polymer lithium-ion batteries as well as a manufacturer of electric vehicles, announced that on June 1, 2011 it had signed, through its subsidiary—Wuxi Zhongqiang Autocycle Co., Ltd., a sales contract with Wuxi Hao Jie Vehicle Co., Ltd. The sales contract is for 24,000 electric vehicles, which include E Bikes and scooters, for a total value of $14,730,000 USD (approximately 95,780,000 RMB). The contract will be fulfilled from June 1, 2011 through May 31, 2012.

The contract was placed after a trial order of electric vehicles purchased in April and May of this year by Wuxi Hao Jie Vehicle Co., Ltd.

The Chairman of ABAT, Mr. Zhiguo Fu, stated: "ABAT continues to utilize its capital resources to develop Wuxi Zhongqiang Autocycle Co., Ltd. by expanding marketing and R&D, implementing more efficient production techniques, and maintaining a solid management team. This contract makes evident the growing recognition of the high quality of ABAT's product lines and shows the continued demand for the advanced technology characteristic of our products."

Rodman and Renshaw on ABAT                          5/13/2011

ABAT: 1Q11 Earnings Update

1Q11 Earnings: ABAT reported its 1Q11 results revenue and net income of $28.6 MM and $17.0 MM, with diluted EPS of $0.20, compared to our expectations of $32.5 MM for the top-line, $8.0 MM for the bottom-line, and $0.10 for diluted EPS. The $17.0 MM net income includes $9.1 MM gains from change in value of warrants. Earnings would be ~$8.9 MM if excluding the non-cash gain from change in warrant value. Total revenue grew by 46.5% Y-o-Y but declined 0.6% sequentially. Battery and E-Scooters each accounted for 55% and 45% of total revenue. Gross profit reached $11.8 MM, representing a gross margin of 41.3%. Operating profit in 1Q11 was $9.8 MM, or 34.2% of total sales, compared to $7.0 MM in 1Q10 and $9.8 MM in 4Q10. As of March 31, 2011, ABAT had a backlog of ~$60.2 MM for delivery throughout the next 6 months, including a battery backlog of ~$49.4 MM. The company ended FY10 with $86.4 MM of cash and $114.0 MM of working capital.

Revenue Mix: By segments, battery sales contributed $15.9 MM or 55% of total, increased by 51.8% Y-o-Y and 4.4% sequentially. Electric Scooters accounted for $12.7 MM or 53.7% of total sales, growing by 35.6 Y-o-Y. Within battery segment, small capacity, medium capacity, large capacity, and miner’s lamp each generated $5.5 MM, $2.7 MM, $7.2 MM, and $0.5 MM in sales, accounting for 19%, 9%, 25%, and 2% of total. In the quarter, small capacity battery sales grew by 362.6%, fastest among all product categories.

Warrant Gains: ABAT reported $17.0 MM in GAAP earnings including a non-cash gain of $9.1 MM from warrant value change. Adjusting for the non-cash gains, the company would have generated $8.9 MM normalized earnings or $0.11 per diluted share compared to our expectations of $8.0 MM or $0.10 per diluted share.

2Q11 Estimates: For 2Q11, we expect the company to generate revenue and earnings of $35.8 MM and $8.9 MM, with diluted EPS of $0.11. For the full year FY11, our estimates after adjustment for the warrant related non-cash gain are $136.5 MM, $36.4 MM, and $0.43, respectively.

Valuation: Maintain Market Perform

We maintain that uncertainties driven by the allegations against the company may cause the stock to continue trading within a narrow range of the current levels and prevent any meaningful appreciation. The At the end of 1Q10, the company had $86.4 MM in cash and had generated $4.6 MM in operating cash flow, the company’s balance sheet and potential access to domestic credit should support its expansion and working capital needs. Management has an opportunity to undertake a share buyback depending on their comfort around the cash needs for the next twelve months.

Notice Regarding Privacy and Confidentiality:


This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.

GeoTeam® Note: 2011 vs. 2010 Adjusted EPS

First Quarter: $0.11 vs. $0.10

Analyst 2011 First Quarter Estimate was $0.10

Rodman and Renshaw on ABAT                               4/19/2011

ABAT: Allegations Are An Overhang; Revising Rating To Market Perform

Revising Rating To Market Perform: ABAT’s stock has come under pressure from various allegations raised about the company’s business model. Though the company has provided a rebuttal to the allegations, we believe, there is now a state of confusion amongst investors about the story. In addition, we are projecting negative to flat EPS growth in 2011 driven by potentially lower margins (impact from higher raw material prices and competition) and higher share count post the capital raise. We are revising our rating on ABAT to Market Perform from Market Outperform. We believe uncertainties driven by the allegations may cause the stock to continue trading within a narrow range of the current levels and prevent any meaningful appreciation. We will revisit our rating on any new developments that may help to clarify the issues raised. 

Potential Catalysts: We believe the upcoming 1Q11 results should provide management with an opportunity to further address the contentious issues and demonstrate that operational execution is in place. Regaining investor confidence through increased transparency will remain the most important catalyst for the stock. The company should also show, as per our estimates, a healthy cash balance of ~$80 MM (post acquisition expenses) at the end of 1Q11. We believe this is a sufficient amount to meet the company’s near term working capital needs. We believe management also has an opportunity to undertake a share buyback depending on their comfort around the cash needs for the next twelve months.

4Q10 Earnings: ABAT reported its 4Q10 results with revenue and net income of $28.8 MM and $5.6 MM, with diluted EPS of $0.07. Total revenue grew by 34.7% Y-o-Y and 11.1% sequentially. By segments, battery sales contributed $15.2 MM or 53% of total, increased by 33.9% Y-o-Y and 26.9% sequentially. Electric Scooters accounted for $13.9 MM or 53.7% of total sales, growing by 35.6 Y-o-Y. 

Full Year Results: On a full year basis, the company reported revenue, earnings, and diluted EPS of $97.2 MM, $36.7 MM, and $0.48, respectively. 

$30 MM of Capital Injection: In early December 2010, the company announced a capital raise of $30.0 MM with the sale of 7.5 MM shares of common stock at $4.00 per share. ABAT also issued warrants to purchase additional 3.75 MM shares of common stock at a strike price of $4.00. Total common shares outstanding after the raise as of March 16, 2011 were 76.4 MM. 

2011 Expectations: For 1Q11, we are projecting $32.5 MM for the top-line, $8.0 MM for the bottom-line, and $0.10 for diluted EPS. For full year FY11, our estimates are $140.3 MM, $34.7 MM, and $0.44, respectively.

Notice Regarding Privacy and Confidentiality: .

This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.

SAN DIEGO--(EON: Enhanced Online News)--Robbins Umeda LLP, a shareholder rights litigation firm, announces that a class action lawsuit has been filed on behalf of all persons or entities who purchased common stock of Advanced Battery Technologies, Inc. between March 16, 2009 and March 29, 2011 (the "Class Period").

Advanced Battery designs, manufactures, and markets rechargeable polymer lithium-ion batteries in the United States, Europe, and Asia. Advanced Battery was founded in 1984, and is headquartered in New York, New York.

The lawsuit alleges that during the Class Period, Advanced Battery made a number of misrepresentations in its public filings with the U.S. Securities and Exchange Commission and in its press releases. Namely, that it: (1) misrepresented certain of its distribution arrangements; (2) paid $1.5 million to acquire another company whose location and existence could not be verified; (3) paid $20 million to purchase a company, but failed to disclose the related party nature of the transaction; and (4) misrepresented that it owned a company subsidiary when it did not, or failed to disclose that it entered into a related party transaction with its Chairman and Chief Executive Officer, which resulted in the owner of that subsidiary being the Chairman and Chief Executive Officer, and not Advanced Battery.

On March 30, 2011, Variant View Research, an analyst firm, issued a detailed report revealing the adverse information to the market. As a result, the price of Advanced Battery's stock fell over 40%, damaging investors.

On April 6th, 2011, the Company responded to the allegations made by Variant View Research. Read the response here.

ABAT - The GeoTeam took a closer look at the ABAT hit piece published yesterday. While we are not attesting to legitimacy of ABAT operations at this time or all of the reports points, BOB believes that the piece contains errors on the following points:

1. The Chairman appears to have transferred ownership of ABAT’s key subsidiary to himself without explanation or compensation;
2. ABAT leads investors to think that it makes cutting-edge electric cars, when in fact it produces cheap scooters and bicycles.
3. ABAT spent $20 million to acquire a company linked to the Chairman without disclosing the relationship;

More on this later

However, we are currently waiting on the analysis of numbers contained in SAIC filings, as this will be the driving factor on our investment stance in ABAT shares.

Red Flag:

ABAT made the following statement in its 2010 10K:

Despite our commitments, we have sufficient liquidity to fund our near-term operations and capital expenditures. If we determine that additional funds are needed for other attractive growth opportunities or for the full implementation of our long term expansion plans for Wuxi ZQ, we have over $57 million in property, plant and equipment that are free of liens which could be used as collateral for potential loans. We believe that secured lenders would look favorably on our strong financial position, positive cash flows as well as promising business prospects, and that secured financing will be available on favorable terms if needed. Given the financial resources available to the Company, management believes that it has sufficient capital and liquidity to sustain operations for the foreseeable future.

Please note that a similiar statement was made in the 2010 third quarter filing just days before they announced an equity raise of $30 million.

Despite our commitments, we have sufficient liquidity to fund our near-term operations and capital expenditures. If we determine that additional funds are needed for other attractive growth opportunities or for the full implementation of our long term expansion plans for Wuxi ZQ, we have over $57 million in property, plant and equipment that are free of liens which could be used as collateral for potential loans. We believe that secured lenders would look favorably on our strong financial position, positive cash flows as well as promising business prospects, and that secured financing will be available on favorable terms if needed. Given the financial resources available to the Company, management believes that it has sufficient capital and liquidity to sustain operations for the foreseeable future.

Third Quarter Financial Highlights

• Revenue increased 46.4% year-over-year to $ 25.9 million.

• Gross profit increased 80.4% year-over-year to $13.8 million.

• Net income increased 118.8% year-over-year to $11.1 million.

• Earnings per diluted share increased 92.5% year-over-year to $0.16.

• Strong balance sheet with $74.3 million in cash and cash equivalents as of September 30, 2010.

Mr. Zhiguo Fu, CEO of ABAT, stated, "We are pleased to report an increase in our revenue attributable to medium and large capacity batteries and electric vehicles. This has been beneficial to the profitability of our overall business. The margins that we are able to achieve in selling larger capacity batteries are significantly greater than the margins we achieve in selling smaller capacity batteries. In order to meet higher demand from both battery and electric scooter markets, the company intends to accelerate growth by both adding more facilities and pursuing acquisition opportunities."

We have sufficient liquidity to fund our near-term operations and to fund the working capital demands of future expansion. If we determine that additional funds are needed for other attractive growth opportunities or for the full implementation of our long term expansion plans for Wuxi ZQ, we have over $55 million in property, plant and equipment that are free of liens which could be used as collateral for potential loans. Moreover, at October 31, 2010 we had a backlog of approximately $55.4 million for delivery throughout the next 12 months, including a battery backlog of approximately $41.6 million. (At October 30, 2009 we had a backlog of approximately $66.8 million, including a battery backlog of approximately $55 million.) Since our ongoing robust backlog indicates that our cash flows from operations will remain positive, we believe that secured lenders would look favorably on our strong financial position, positive cash flows as well as promising business prospects, and that secured financing will be available on favorable terms if needed.

Given the financial resources available to the Company, management believes that it has sufficient capital and liquidity to sustain operations for the foreseeable future

Rodman & Renshaw on Advanced Battery:

Higher Automation In Battery Facility: We were in ABAT’s battery manufacturing facilities in Harbin on Oct 14^th. We were pleased to see all four production lines have now been modernized compared to our first trip in 2008. Over the last year and half the company has been upgrading its manufacturing systems and at the same time adding capacity. The company’s available capacity with all four lines now complete is approximately 140,000 amp hrs per day. We believe this translates to between $80 MM and $90 MM in revenues at full utilization levels. This compares to approximately half this capacity available to the company a year ago. Lines C+D are currently running at full utilization and lines A+B are running at 20%-30% utilization levels. Factory managers believe that A+B lines should be running at high utilization by mid 2011. What was very noticeable compared to our last visit was the increase in automation that has taken place in the production process. Consequently the company has fewer manual functions and associated workers. Please find pictures of the new production lines in page 2. 

Wuxi Scooter Factory Well Integrated: We believe that management has come through nicely on integrating the Wuxi scooter business with the core battery business. We were in the Wuxi facilities in the first half of 2010. We believe both businesses are running fairly smoothly and management has good revenue and earnings visibility. Given that battery costs make up approximately 30% of the total cost of an e-bike / e-scooter, acquiring a scooter maker appears to have been a good strategic decision. We believe 10%-20% of ABAT’s battery production is dedicated to Wuxi scooters. 

3Q10 Expectations: Currently we maintain our estimates for 3Q10 and 4Q10. For 3Q10 we expect a revenue and net income of $27.0 MM and $8.2 MM, with diluted EPS of $0.12. For full year FY10, we are projecting $103.8 MM in revenue and $38.6 MM in net income, with diluted EPS of $0.56. We expect the battery production and sales from the upgrade of A and B line to start ramping from 4Q10. We expect battery sales to contribute ~$48.6 MM in revenue in FY10, while EV is estimated to account for $55.2 MM. 

Valuation: We are maintaining our 12 month price target of $6.00. At current levels ABAT is trading at a P/E multiple of ~7.0x to our 2010 estimates. At our $6.00 price target ABAT would trade at a P/E multiple of ~10.6x to our estimates for 2010. This falls in the middle of the range of 8x to 20x P/E multiples for comparable battery and Cleantech companies. We maintain our Market Outperform rating.

Risks: 1) Intense Competition 2) Country Risk 3) Volatility in raw material prices.

Notice Regarding Privacy and Confidentiality:

This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.

Second Quarter Financial Highlights:

• Revenue increased 65.8% year-over-year to $22.8 million.

• Gross profit increased 74.9% year-over-year to $11.0 million. 

• Adjusted net income increased 236.4% year-over-year to $7.1 million.

• Adjusted earnings per diluted share increased year-over-year to $0.10 from $0.04.

• Strong balance sheet with $62.4 million in cash and cash equivalents as of June 30, 2010.

Mr. Zhiguo Fu, CEO of ABAT, stated, "We are pleased with our results during the second quarter. During the quarter, we experienced strong demand in both domestic and international markets for electric and hybrid electric vehicles as individuals and industries switch to alternate forms of transportation. We are still upgrading the capacity of two battery production lines and are aiming to complete the upgrade in the third quarter in order to meet the strong battery demand from customers."

"ABAT is experiencing strong demand in both domestic and international markets for electric and hybrid electric vehicles as individuals and industries switch to alternate forms of transportation. Following the completion of our acquisition of Wuxi ZQ, ABAT now has the manufacturing capability to produce vehicles, batteries and many key vehicle parts, meaning Wuxi and ABAT can produce high quality vehicles with margins that are superior to its competition."

Battery backlog is approximately $53 million as of August 3, 2009, all of which is expected to be delivered in the next 12 months.

Advanced Battery did not address previously stated guidance in its second quarter press release.

Source: GlobeNewswire (August 11, 2009)

Guidance Report: 

ABAT issued an SEC 8K filing this morning highlighting details from a recent investor conference call, organized by Rodman & Renshaw. The GeoTeam® has created a GeoManaged® Guidance Table summarizing financial guidance mentioned during the conference call. The guidance appears to be significantly higher than analyst estimates provided by Reuters.

First Quarter 2009 Guidance Ending March

Full Year Fiscal 2009 Guidance Ending December

* The company did not provide EPS guidance. The GeoTeam used the 2008 year end Outstanding Share count of 54.67 million to calculate implied EPS figures.

Source: SEC Form 8K ( April 2, 2009)