KULR Technology Group's (OTC Other: KULR) contribution to multiple billion-dollar battery safety markets took center stage last week at the Benzinga Global Small-Cap Conference. Pulling no punches, KULR showed the devastating effects of NOT including its thermal management solutions into the more powerful current ion-battery design. In fact, while its demonstration was powerful enough to remove doubt about the technology's effectiveness for ion battery safety, CEO Michael Mo also gave a compelling interview highlighting reasons why its technology will likely be adopted throughout multiple sectors sooner rather than later.
Best of all, despite its aerospace applications earning most of the headlines, Mr. Mo explained how its thermal management and heat dissipation solutions can earn consumer market share in the microelectronics sector. In fact, Microsoft (NASDAQ: MSFT) has recognized that vertical by including KULR solutions in its Surface Pro aboard the International Space Station. Inclusion there could translate into massive adoption on earth. In fact, considering that Microsoft took steps to protect a billion-dollar project with its thermal management solutions, that adoption may come sooner rather than later. Better still, KULR's recent earnings report shows that's already happening.
KULR's Q1 showed remarkable growth, with revenues increasing over 400% compared to its same period last year. From a revenue perspective, sales surged to $410,000 from $77,509 a year ago and were accompanied by gross profit rising 170% to $140,000 for the period ending March 31st. While that shows impressive past performance, its presentation last week provided investors ample reasons to be more bullish than ever about the back half of this year. In fact, the visuals bring into focus just how vital and mainstream KULR technology can be. So much so that the Benzinga host referred to the technology as being "mandatory" for battery safety.
The excellent news for KULR, and its investors, is that its technology is becoming much less a secret. And adoption by clients from auto racing to military defense could help serve up exponential growth in the coming quarters. CEO Michael Mo explains why in this conference video.
Video Link: https://www.youtube.com/embed/Jrcq_ymSBt0
Broad Market Applications for KULR Technology
Better still, KULR's recent earnings report shows that growth is already surging. And with deals already in place with Andretti Technologies, Airbus (OTC: EADSY), NASA, Lockheed Martin (NYSE: LMT), and Leidos, KULR is exceptionally well-positioned to have a breakout year. Those deals could be a part of the reason why analysts covering KULR expect a near 70% gain in its share price this year.
In a bullish report from Taglich Brothers, its 12-month share price target was revised higher by 40% to $3.50. That revision is based on Taglich modeling KULR's substantial revenue growth, its growing list of tier-one clients, and its tangible proof that its thermal management and heat dissipation technology could capitalize on multiple market opportunities this year. Better still, they are so bullish on the technology that they expect a tripling of revenues by the end of Q4.
But, after watching the Benzinga presentation and noting the technology's diverse applications, those estimates could turn out to be conservative.
In fact, its carbon fiber thermal management solutions included on Mars Rover Perseverance 2020 validates its standing as having a best-in-class solution to protect billion-dollar assets. Even better, the FAA is evaluating its technology for in-flight applications and its effect to mitigate ion-battery malfunctions. Indeed when the FAA speaks, companies have no choice but to listen. And with KULR demonstrating irrefutable proof that its technology can substantially reduce the risk of fire and explosion, expect its inclusion in ion battery design in the aviation sector. And that's just a single but massive, revenue-generating opportunity.
KULR is also working with the Marshall Space Flight Center, evaluating a dual-use opportunity to integrate its technology into 3D-printed battery systems for manned and robotic space applications. And those programs add to working relationships with Leidos and Lockheed Martin to develop hypersonic and directed energy defense applications.
And there are several more projects that make its current $2.08 share price and $208 million market cap appear substantially low. Here are a few:
Partnerships That Drive Value
In what could jumpstart other deals in the surging electric vehicle sector, KULR recently announced an agreement with Andretti Technologies and its EV racing car subsidiary. There, its thermal management and heat dissipation technology are being recognized as a vital inclusion to mitigate the risk of fire and explosion in batteries. Expectations are for significant market penetration in that sector. Better still, KULR believes it can utilize a strategy from Tesla's (NASDAQ: TSLA) playbook by developing products with high-performance specialized needs and then modifying that design to serve mass markets.
Another deal could drive exponential growth in the global electronics and battery sector. While KULR didn't provide a name, they highlighted that a leading supplier of electronic components in smartphones such as the iPhone could soon include KULR technology. Obviously, that market could generate massive revenues from millions of consumer products. The consumer device market also opens the door to expanding its sale of ISC battery testing technology and licensing its innovative TRS technology to clients bringing battery-powered products to market.
Further, with Volta Energy and Drako, opportunities to extend its reach in battery safety technology for grid and stationary energy storage modules and as a supplier partnership for NASA-grade fiber cooling technology are also in play. With new regulations being imposed on the battery industry, KULR expects the deal with Volta, in particular, to ramp considerably starting in Q3.
Other billion-dollar markets are already in play.
A $70 Billion Energy Storage Market In-Play
KULR's focus on penetrating the Energy Storage and Thermal Management markets is more than timely; it's potentially lucrative. In fact, according to Lux Research, the Energy Storage market alone today delivers a more than $59 billion revenue opportunity. However, they expect the market to grow exponentially over the next decade, reaching an estimated $554 billion revenue-generating opportunity by 2035. Notably, KULR has a running start to capture the growth, with products in development or already used to serve e-mobility applications, improve electronic device safety, and mitigate fire risks for stationary storage. Thus, KULR could quickly emerge as a market leader in that segment.
KULR is also targeting the $8.8 billion market opportunity from the Thermal Management Market (TMM) by creating solutions to meet surging industrial and consumer demand for reliable microelectronics and lithium-ion batteries. As noted, KULR could find itself ideally positioned to earn business from its technologies' ability to mitigate fire and explosion in products that use these batteries, making the revenue-generating opportunities in this market alone a compelling case for investment in KULR.
Better still, all of the opportunities presented can be maximized sooner rather than later. Remember, its passive propagation resistant (PPR) battery design prevents fire and explosion by providing a single cell thermal runaway from exiting the battery enclosure. And with validation from NASA, Airbus, and Andretti, to name a few, KULR's reputation as the "go-to" source for thermal management safety solutions is second to none.
And 2021 could be its time to shine.
Compelling Investment Opportunity
Indeed, a sum of the parts makes KULR a compelling investment opportunity. More than a leading provider to a total solution to battery safety, the company is quickly advancing from a component supplier to designing and testing higher-margin complete solutions with its diversified services platform. In short, KULR is well into the process of evolving from a component supplier to a developer, manufacturer, and licensor for government agencies and the private sector for design and testing services.
Better still, KULR made tremendous progress in the past year to strengthen its balance sheet, substantially increase gross margins, and make its platforms scalable to meet enormous diversified demand. A facility being built that is 4X its current operating space will enhance its opportunities to meet that demand.
Also in play are both the near and long-term market and product opportunities from KULR's focus on the clean energy markets. Those efforts could get a boost from a Biden Administration that is planning to spend hundreds of billions of dollars on de-carbonization efforts over the next four years.
Best of all, KULR can create value from a robust IP portfolio, a planned near-term uplist to a more senior NASDAQ market, and a balance sheet that was recently complimented by an $8 million raise. Combining it all, KULR appears to be in its best operating position in history. And with excellent management, KULR is exceptionally well-positioned to leverage its unique technologies to capture significant market share in the global battery market.
Thus, not capitalizing on an apparent disconnect in share price to intrinsic value today could prove costly to those investors looking to seize compelling investment opportunities at discounted prices.
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