KULR: New Option on the Millennial Stock Menu

Date : July 18, 2020

New Opportunity:  KULR Technology Group Inc. (OTCMKTS:KULR)

 

The Robinhood bull market is apparently upon us, with droves of millennials finally catching the stock market bug. The result has been a highly “thematic” bull market run resembling the early stages of the dotcom bubble in the late 1990’s. We aren’t anywhere near 1999 levels yet in terms of wild valuations and parabolic rallies, but the general tone is similar already.

Exploring the themes in play, it won’t take long for one to land on two major themes in particular – space exploration and electric vehicles – and how they inextricably tie together around the legend-in-the-making known as Elon Musk. To give a sense of the man, last Wednesday, Musk tweeted this with regard to his 18% Tesla stake, now worth about $52B: “Essentially. Long-term purpose of my Tesla stock is to help make life multiplanetary to ensure its continuance. The massive capital needs are in 10 to 20 years. By then, if we’re fortunate, Tesla’s goal of accelerating sustainable energy & autonomy will be mostly accomplished.”

So, he’s going to get so rich that he will save the world from global warming and fly us all to Mars to geoscape some new digs. This guy thinks BIG.

With TSLA shares exploding in a parabolic trend, the trading world has exploded with interest in the Electric Vehicle theme, with monster rallies in NKLA, NIO, SHLL, SPAQ, FUSEF, and others, all serving to reinforce the idea that this is perhaps the red-hot theme to define the current period and the tech bull market we see in front of us right now.

And there are certainly good reasons for the ascendance of this theme and the booster rockets attached to the stocks in the space.

As a powerful symbolic statement contributing to the sense of momentum on this theme, LYFT Inc (NASDAQ:LYFT) announced last month that it would commit to making its entire fleet 100% electric by the year 2030. We would assume that this is a game of “up the ante”, where we will next likely get word that UBER is making the same commitment, but to be completed by 2025. Then the dam will break and municipal transportation systems, rental car companies, buses, truckers, police, cabs, etc. Everyone will eventually join the parade of commitments.

Why? Because another transition has already happened that more or less forces everyone to fall in line: the birth of the ESG investment paradigm. ESG (Environmental, Social and Governance) investing, according to ADEC, refers to a class of investing that is also known as “sustainable investing.” This is an umbrella term for investments that seek positive returns and a long-term positive impact on society, the environment, and the performance of the investment holding.

Morgan Stanley recently put out research suggesting that the ESG theme would attract as much as $57 trillion in capital flows over the next 10 years based on research into millennials’ investment mores and the pace of inheritance likely to capitalize them as the world’s biggest ever investor demographic.

In other words, millennials suddenly love stocks (and $0 commissions), and really love space exploration, Elon Musk, and electric vehicles. And they are starting to become the dominant demographic driving the stock market.

With all of that in mind, we turn our attention now to KULR Technology Group Inc. (OTCMKTS:KULR), a company that develops, manufactures and licenses next-generation carbon fiber thermal management and safety technologies for batteries and electronic systems for use in space exploration and electric vehicles, among other applications.

Note that one of the key elements of the KULR value proposition is to make lithium-ion batteries safer, which has been perhaps the big Achilles heel in the Tesla story – the occasional flaming car.

 

Symbol:  KULR
Company:  KULR Technology Group Inc.
Quote:  http://finance.yahoo.com/q?s=KULR
Latest News: 
http://finance.yahoo.com/q/h?s=KULR+Headlines
Company Website:
http://www.kulrtechnology.com/

kulr, KULR: New Option on the Millennial Stock Menu

The following report is based on our independent research of  KULR Technology Group Inc. (OTCMKTS:KULR),   from publicly available information, including information from the company’s website and investor relations material, as well as news, disclosures, press releases, and other material relevant to understanding the company and its operations and assets. We have been engaged to disseminate our findings from that research process along with our opinion about KULR Technology Group Inc. (OTCMKTS:KULR),  based on that research.

kulr, KULR: New Option on the Millennial Stock Menu

Who is KULR

kulr, KULR: New Option on the Millennial Stock Menu

KULR Technology Group Inc. (OTCMKTS:KULR), as discussed above, develops, manufactures and licenses next-generation carbon fiber thermal management technologies for batteries and electronic systems.

Leveraging the company’s roots in developing breakthrough cooling solutions for NASA deep space missions and backed by a strong intellectual property portfolio, KULR enables leading aerospace, electronics and electric vehicle manufacturers to make their products cooler, lighter and safer for the consumer

The company offers lithium-ion battery thermal runaway shields; fiber thermal interface materials; phase change material heatsinks; HYDRA TRS battery storage bags; internal short circuit device; and CRUX cathodes. Its technologies are used in electric vehicles and autonomous driving systems, artificial intelligence and cloud computing, and energy storage and 5G communication technologies. The company serves electrical transportation, 5G mobile computing, cloud computing, and space exploration and communications markets.

KULR’s main proprietary value-add technology is a carbon fiber material that provides what we believe to be superior thermal conductivity and heat dissipation for an ultra-lightweight and pliable material. Leveraging its advanced cooling solutions, developed through longstanding partnerships with NASA, the Jet Propulsion Lab and others, its products and services make commercial battery powered products safer and electronics systems cooler, and lighter. KULR’s proprietary carbon fiber-based solutions are generally more thermally conductive, lighter weight, require less contact pressure, and offer greater design flexibility and durability compared to traditional solutions. A carbon-fiber solution to heat management works particularly well because it conducts heat many times better than metal, is significantly lighter, does not need to be attached mechanically, and “melts” at a much higher temperature. As a result, we believe KULR has solid potential to offer a unique value proposition to customers in the multibillion-dollar thermal management industry. KULR also has an exclusive perpetual license from NASA for a critical component used in Lithium-ion battery testing, known as an internal short circuit.

kulr, KULR: New Option on the Millennial Stock Menu

A recent research report from Litchfield Hills Research estimated the total available market for KULR products and services at approximately $8 billion in four target markets:

  • Lithium-Ion battery energy storage and battery transportation market,
  • Thermal management,
  • Space exploration and communications market, and
  • Defense

KULR Technology also owns intellectual property being used to address the issue of fires in lithium-ion batteries, which drive most electric vehicles and aircraft. As of 12/31/19, the Federal Aviation Administration has been aware of 264 incidents of smoke, fire, extreme heat, or explosion involving Lithium batteries since early 2006.

kulr, KULR: New Option on the Millennial Stock Menu

Recent Catalysts

The primary element here was the company’s recent update in its quarterly filing. We pay special attention to its on-ramp toward more pronounced commercialization.

In the government activity arena, “We have a history with NASA and government defense customers to create cutting edge technology and then to commercialize those technologies to mass market applications. In the current COVID-19 environment, KULR is fortunate to have ongoing and pending projects with government agencies with defined national security goals and ample budgets. Since the outbreak of COVID-19, KULR has focused on government contracts with NASA, the US Department of Transportation, the US Air Force, the US Army, and the US Defense Logistics Agency. Since early March 2020, we have filed 10 submissions and proposals, including SBIR applications, AFWERX challenges, and Broad Agency Agreement proposals. The goal is to leverage our long-standing relationship with the US Department of Defense and NASA, further strengthen our research and development with government funding, increase industry awareness of our world-class battery safety and electronics thermal management technologies, and expand our channels into mass commercialization.”

That note was accompanied by its non-government-related commercial progress: “On April 13, 2020, we announced that we entered into a license and supply agreement with Americase, LLC, granting a license to Americase for use of our passive propagation resistant (PPR) technology and agreeing to supply our PPR materials for Americase’s “Battery Bag” products. We expect more of these partnerships in the area of battery safety, energy storage, and 5G thermal management, and will continue to explore creative business models with customers to create win-win partnerships and lower our capex spending. We continue to expand our PPR battery design and internal short circuit (“ISC”) battery testing customer engagements into energy storage, electrical transportation and aviation markets.”

At this point, the sales data is still in the early stages of the growth curve, which naturally is exactly why the stock can be bought at such cheap levels

kulr, KULR: New Option on the Millennial Stock Menu
kulr, KULR: New Option on the Millennial Stock Menu

Total revenue for the three months ended March 31, 2020 was $77,500, compared to revenue of $194,952 in the year ended March 31, 2019  “We are still in the early stages of business growth and development of customer relationships which typically begin on a project by project basis, leading to limited volume trials and eventually, product sales. As a result, in the absence of a large installed customer base, our sales can be lumpy and vary from one period to another, however our customer pipeline has been strengthened from 13 customers during 2018 to 28 customers during 2019.”

In other words, small but growing numbers, with an enormous addressable market yet to be tapped, but waiting and lined up for penetration.

“Despite economic uncertainty created by COVID-19 and experiencing some delays with ongoing work, our prospective customer base and customer pipeline remains largely intact. Some of our more mature product development engagements are on track to transition into consistent volume production customers in 2020 and 2021,” said Michael Mo, Chief Executive Officer of KULR Technology Group. “Moreover, we have significantly increased the number of engagements and contract work with strategic government customers including NASA, the US Department of Transportation, US Air Force, US Army and the Defense Logistics Agency in projects that have a high degree of funding commitment.”

Prior to that announcement, the company announced the launch of a passive propagation resistant (PPR) battery design solution for space applications, including both trigger and product cells, for lithium ion battery testing and safety, which is critical for the estimated $146 million global space battery market by 2023. KULR’s PPR design solution prevents cell to cell thermal runaway propagation and inhibits the fire and ejecta of a single cell from exiting the battery enclosure.

“We are proud of our battery solution for space applications and honored to work on the important issue of battery safety,” said Mo. “We are continuously evolving and improving our testing tools and safety solutions and we look forward to sharing them with any customer who relies on safe and efficient battery technology.”

Technical Analysis

KULR shares are pulling back to a key confluence “sweet spot” zone symmetrically positioned around the $1.50 level, as Fibonacci 61.8% retracement support comes into play.

This hovers above bullish trendline and 50-day MA support just below, suggesting the stock retains its new bull trend mode at this point, with volume continuing to surge.

kulr, KULR: New Option on the Millennial Stock Menu
kulr, KULR: New Option on the Millennial Stock Menu

About KULR

KULR (KULR Technology Group Inc.) develops, manufactures and licenses next-generation carbon fiber thermal management technologies for batteries and electronic systems.

Leveraging the company’s roots in developing breakthrough cooling solutions for NASA deep space missions and backed by a strong intellectual property portfolio, KULR enables leading aerospace, electronics and electric vehicle manufacturers to make their products cooler, lighter and safer for the consumer

The company offers lithium-ion battery thermal runaway shields; fiber thermal interface materials; phase change material heatsinks; HYDRA TRS battery storage bags; internal short circuit device; and CRUX cathodes. Its technologies are used in electric vehicles and autonomous driving systems, artificial intelligence and cloud computing, and energy storage and 5G communication technologies. The company serves electrical transportation, 5G mobile computing, cloud computing, and space exploration and communications markets.

Key Points:

  • KULR is already on pace for over 59% topline growth as it begins to commercialize leading IP in the lithium-ion battery market, with applications in the booming electric vehicle and space exploration markets
  • KULR has a small trading float, which suggests the stock could launch higher on any additional influx of interest.
  • KULR is making real money, with trailing revs already coming in at $713K.
  • KULR has expanded its core customers dramatically as it gains a foothold on penetrating what analysts believe is an $8B market opportunity
  • KULR is pulling back after an aggressive run to test the waters above $3.50 last month, and is now running into strong support at Fibonacci, MA, and trendline benchmarks.

 

kulr, KULR: New Option on the Millennial Stock Menu

Conclusion

KULR Technology Group is sitting in the heart of the biggest themes driving the current bull market at a time when the retail investor is suddenly back with a vengeance and a distinct passion for everything that has anything to do with Elon Musk, electric vehicles, or space exploration.

KULR is a thematic tie-in to all of these ideas. And the company is already making real progress toward penetrating an $8 billion market opportunity in the process.

This is also another powerful play on the emerging ESG investing theme that has come to dominate the landscape for new active fund flows from emerging institutional investors. As the company builds operational momentum, it holds the potential to trade at strong multiples to sales and earnings over time.

But, most importantly, KULR is smack in the middle of the thematic sweet spot with real proprietary IP gaining commercial traction ahead of peers. The only barrier is visibility/obscurity. Once the crowd finds it, traders may have to pay up to gain access.

kulr, KULR: New Option on the Millennial Stock Menu

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