Shares of KULR Technology Group Inc. (OTCQB: KULR) are surging by 26% since last week's announcement of a planned June 2021 launch of its new product line of high-capacity lithium battery packs. The company is looking to seize a sizable share of the more than $127 billion commercial drone market, and its new products could help revenues surge in the back half of the year. Shares are trading higher by 14% to $2.53 late Tuesday, adding to their nearly 4% gain from Monday.
The new revenues are expected to be quickly accretive to other initiatives. In fact, KULR is already building relationships with an impressive list of clients, including Andretti Technologies, Airbus (OTC: EADSY), NASA, and Jet Propulsion Labs. The deal announced yesterday adds a global commercial drone manufacturer to that list, and KULR has not shied away from saying it expects to ink deals with additional customers across a wide range of business sectors later this year.
The excellent news about its entry into the lithium battery pack market is that it represents the first step in KULR's overall strategy of targeting adjacent markets that complement its already established battery safety and thermal management products. Other markets in the crosshairs of KULR include substantial revenue-generating opportunities from additional e-mobility markets, military defense, and numerous markets needing its thermal management technology.
The deal is expected to be the first of many this year, and investors are especially excited about how KULR President and COO, Keith Cochran expects to transform the company. In the release made Wednesday, he said,
"As I previously shared when I joined, KULR would be building the organization to prepare for entry into mass production markets. As such, we hired a very experienced VP of Operations and announced our move into a facility with four times the manufacturing floor space. These steps were taken in support of delivering the first of KULR's EV Battery Pack platform. We targeted markets that are adjacent and complimentary to KULR's established battery safety and thermal management products. The first market in our scope is commercial drones. However, we intend to expand rapidly into other markets. We are very excited to finally be able to share this news with our investors."
Investors are right to expect more.
Video Link: https://www.youtube.com/embed/DbQxY156hGU
Big Payday from Drone Industry
KULR, in fact, could seize a sizable share of its targeted niche in the drone market and, because of its innovative technology, could find itself inking deals with billion-dollar companies like Ambarella (NASDAQ: AMBA). Specifically, they can potentially broaden the entire market by making batteries safer and better performing. Not to say that drone adoption is weak; it's just that it can be better, especially if limitations such as energy densities and weight of batteries can be designed for better functionality and utility. Guess what...KULR is focused on those very issues.
In fact, KULR's energy-efficient battery pack platform does more than reduce weight. It also incorporates an inherently safe battery with advanced chemistry and thermal management technology. For drone makers, that translates to a drone that can fly farther and longer on a single charge. The applications go far beyond pedestrian drone fliers, too. Massive revenue could be generated from the military, municipalities, and public center agencies that utilize drone technology to map and survey specific initiatives.
The better news is that KULR is well-positioned to earn its share of the market by leveraging a technology based on its 30+ year history specializing in carbon-based fiber materials applied to thermal management and battery safety. Other "smart" battery features of the KULR drone battery pack include monitoring battery states at the cell and pack level, visible warning indicators, battery capacity indicators, and balancing of charge control. Perhaps most importantly, it integrates anti-spark connectors, maintains battery condition history via CAN/SMBus communication, and mitigates the risk of fire and explosions through its thermal runaway technology.
For investors wanting to see revenues grow, it's good to know that KULR is positioning this technology for mass markets.
Seizing the Opportunity
Designing an effective product is one thing. Successfully selling it is another. There, KULR has at least two advantages on its side. First, the team brings technologies and multi-decades of experience capable of solving current problems in thermal management. Second, they can point to the October 2020 Consumer Product Safety Commission report that said KULR's design solutions could stop fires and explosions in lithium-ion battery packs. That report also included additional insights on the future of safe battery technology. The great news is that KULR may be leading the charge in safety, performance, and design.
Better yet, KULR's initial drone battery pack platform can serve the high-performance market at a retail price between $450 to $550 US Dollars. That price point keeps the market wide open and could lead to a massive increase in sales. KULR noted that drone battery pack platforms serving mid to moderate performance markets are expected to hit the markets shortly after the June product launch.
Those that know KULR know that they have been busy. A surge in revenues in Q4 of last year has set the stage for more increases in the new year. In fact, analysts at Taglich Brothers expect revenues to triple this year. Couple that with KULR's strong margins and operating efficiencies, and those revenues become even more valuable as more dollars make it toward the bottom line.
One more thing. While its high-capacity lithium-ion batteries could generate millions in sales, it's likely a primer for better things to come. That makes KULR very interesting at these price levels.
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