Stock Alert for Advanced Battery Technologies Inc.

Advanced Battery Technologies Inc. (ABAT) is a holding company with one subsidiary, Cashtech Investment Ltd. (Cashtech). Cashtech Investment Ltd. is also a holding company with only one subsidiary, Heilongjiang ZhongQiang Power-Tech Co. Ltd. (ZQ Power-Tech). ABAT also owns a 49% interest in Beyond E-Tech Inc., a company that distributes cellular telephones in the United States. In April 2009, Advanced Battery Technologies Inc. completed the acquisition of Wuxi Angell Autocycle Co. Ltd.

Advanced Battery Technologies Inc. was founded in 1984 and is based in New York, New York.

Share Statistics (Aug-17-10)			FY 2007	FY 2008	% Chg	Q4 2008	Q4 2009	% Chg
Symbol	ABAT	Revenue, $Mn	31.90M	45.17M	41.6%	10.73M	63.56M	492.4%
Current price	$3.88	Gross marg.	43.4%	48.8%	12.4%	48.0%	44.7%	6.9%
52wk Range:	$4.80-3.02	Oper. margin	31.9%	41.6%	23.3%	35.7%	27.1%	24.1%
Avg Vol (3m):	495,012	Net margin	32.0%	35.6%	11.3%	29.8%	33.6%	12.8%
Market Cap.	266.11M
Shares Outst.	68.8M	EPS, $	0.21	0.31	47.6%	0.06	0.07	16.7%

Source: Reuters.com, SEC Filings.

Financial Summary

Second-Quarter 2010 Financial Results

The Company had total revenues of $22.8 million for the three months ended June 30, 2010, an increase of $9.1 million or 65.8%, compared to $13.8 million for the three months ended June 30, 2009. The increase in revenues was primarily due to the contribution of sales from the electric vehicle business, which the Company acquired on May 4, 2009. Sales of electric vehicles for the three months ended June 30, 2010, totaled $12.6 million, compared to $3.6 million in the three months ended June 30, 2009. Large capacity battery cells generated $4.1 million in sales, or 18.0% of total revenue in the second quarter of 2010. Medium capacity battery cells generated $2.7 million in sales, or 11.8% of total revenue in the second quarter of 2010. Small capacity battery cells generated $0.9 million in sales, or 3.8% of total revenue in the second quarter of 2010. Miner’s lamp battery cells generated $2.5 million in sales, or 11.1% of total revenue in the second quarter of 2010.

During the three months ended June 30, 2010, gross profit was $11.0 million, an increase of 74.9% year-over year. Gross margin in the second quarter of 2010 was 48.3%, compared to 45.8% a year ago, mainly due to more electric vehicle sales in overseas markets with a higher price premium.

Operating income in the second quarter of 2010 was $9.0 million, an increase of 279.4% year-over-year, from $2.4 million in the prior year’s period. Operating expenses decreased to $2.0 million in the second quarter of 2010 from $3.9 million in the second quarter of 2009. The decrease is primarily due to Wuxi ZQ’s lower selling and administration expenses of approximately $1.4 million in the three months ended June 30, 2010, compared to approximately $2.4 million, including one-time bad debt allowance associated with the acquisition, in the same period of 2009, In addition, ABAT’s U.S. office incurred lower administrative expenses in the second quarter of 2010.

Pre-tax income of $13.3 million in the second quarter of 2010, including a gain of $4.2 million from change in fair value of warrants, represents an increase of $6.2 million from $7.2 million in the same period of 2009. Pre-tax income in the second quarter of 2009, however, included a one-time gain on acquisition purchase of $9.9 million and a loss of $5.0 million from change in fair value of warrants. After taxes of $0.8 million accrued in the three months ended June 30, 2010, the Company’s net income increased 315.0% to $12.5 million, or $0.18 per diluted share, from $3.0 million, or $0.05 per diluted share, in the same period of 2009.

At July 31, 2010, ABAT had a backlog of around $63.3 million for delivery throughout the next 12 months, including a battery backlog of approximately $50.5 million.

Financial Strength (Aug-17-2010)	Company	Industry	Sector	S&P 500
Quick Ratio (MRQ)	42.05	2.55	1.18	0.82
Current Ratio (MRQ)	44.54	3.07	1.47	0.97
Long-Term Debt to Equity(MRQ)	0.00	19.53	57.88	127.70
Total Debt to Equity (MRQ)	0.00	35.70	79.39	188.33

Source: Reuters.com, SEC Filings.

Analyst Consensus

Buy

Outperform

Hold

Underperform

Sell

No Opinion

This is the consensus forecast among one polled investment analysts. Against the Advanced Battery Technologies Inc company.

Analyst Detail	Buy	Outperform	Hold	Underperform	Sell	No Opinion
Latest	0	1	0	0	0	0
4 weeks ago	0	1	0	0	0	0
2 months ago	0	1	0	0	0	0
3 months ago	0	1	0	0	0	0
Last year	1	1	0	0	0	0

The one analyst offering a 12-month price target expects ABAT share price to rise to 6.00 in the next year from the last price of 3.78.

Source: www.ft.com

Consensus Estimates Analysis

	# of Estimates	Mean	High	Low	1 Year Ago
SALES (in millions)
Quarter Ending Sep-10	1	27.05	27.05	27.05	–
Quarter Ending Dec-10	1	34.35	34.35	34.35	–
Year Ending Dec-10	1	103.78	103.78	103.78	122.50
EARNINGS (per share)
Quarter Ending Sep-10	1	0.12	0.12	0.12	–
Quarter Ending Dec-10	1	0.15	0.15	0.15	–
Year Ending Dec-10	1	0.56	0.56	0.56	0.60

Source: http://www.reuters.com/finance/stocks/financialHighlights?symbol=ABAT.W

Investment Highlights

China has become an integral part of the increasing global economy. Chinese enterprises must meet and face worldwide competition that brings with it a unique set of challenges. It is in the front of this ever-changing technology society where leaders of ABAT keep abreast of the market and keep in step with the development of the latest and most sophisticated battery technologies. To this end, ABAT’s R&D department is capable of critically creating a cleaner and more cost effective energy alternative. Currently, China’s economy is developing at an unprecedented rate. More and more Chinese enterprises are expanding into worldwide markets, thus innovation has become a key factor to effectively facilitate increased development.

ABAT is focused on the principle of applied innovations with a pioneering mind set as a way to continue discovering new concepts in the field of clean energy pushing the Company into the technological forefront of the world.

Sticking to the principle of market-oriented, the ABAT gears to the needs of the market and start everything from customers. The marketing department regularly analyzes the market, conducts propaganda, does promotion, holds public exhibitions, and makes plans to provide technical support to the Company to ensure the rapid occupancy of the market. ABAT’s sales department and the marketing department keep regular contact with customers in order to understand their needs, collect and take the feedbacks of their request for the products performance to the related department to make sure the R&D and improvement of the products meet the needs of customers, thus enhancing ABAT’s customers’ understanding and degree of belief to both the Company and its products.

At present, the ABAT has established a worldwide customer network. Its customers distribute in many fields such as civil fields, industrial fields, transportation fields, military fields and some other fields, including the customers from the world famous companies. ABAT is confident that its top quality products, highly competitive prices, and high efficiency production will give the Company access to the establishment of the close relations with the customers in a short time. The Company aims to become a worldwide battery provider in a broad sense. Now the Company has established customer service network in American, HK, Japan and so on, at the same time, ABAT provides them fast and convenient technical and commercial service.

Source: http://www.abat.com.cn/

Technical Analysis

Source: http://stockcharts.com

ABAT is trading above its 50-day moving average. This is considered to be the sign of a bullish trend. There is added weight to this indication because the moving average is rising and suggests that there has been buying interest in this stock.

ABAT has been relatively stable recently. This is evidenced by the width of its Bollinger Bands which are tighter than normal. Additionally, ABAT is trading above its upper Bollinger Band. Relative to recent price action, the stock is currently overextended and due for either a pause or retracement.

The MACD for ABAT currently indicates a strong bullish signal for two reasons. First, the MACD is above the signal line, a 9-day moving average. Second, the MACD is above zero, which implies that the underlying moving averages are trending higher.

Comparative Analysis

Company Name	Ticker	Price per	Mrkt. Cap.	P/E		P/S
Aug-17-2010	symbol	Share, $	$ Mn	2010	2011	2010	2011
Valence Technology Inc.	VLNC	0.80	107.11M	n/a	n/a	6.95	n/a
Ener1 Inc.	HEV	3.50	439.88M	n/a	n/a	12.89	n/a
Ultralife Corp.	ULBI	4.69	79.83M	n/a	n/a	0.47	n/a
Appliance & Tool Median			208.94M	n/a	n/a	6.77	n/a
Advanced Battery Tech. Inc.	ABAT	3.88	266.11M	9.70	n/a	3.83	n/a

Source: Thomson Financial

http://www.thomson.com/financial/financial.jsp

Insider Trading Activity

NET SHARES PURCHASE ACTIVITY Inside Purchases – Last 6 Months
	Shares	Transaction
Purchases	n/a	0
Sales	n/a	0
Net Shares Purchased (Sold)	n/a	0
Total Insider Shares Held	9.13M	n/a
% Net Shares Purchased (Sold)	0%	n/a

Net Institutional Purchases — Prior Qtr to Latest Qtr
	Shares
Net Shares Purchased (Sold)	(89,462)
% Change in Institutional Shares Held	(0.39%)

http://www.thomson.com/financial/financial.jsp

Source: Yahoo Finance

DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS REPORT. We are not registered as a securities broker-dealer or an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority. We are neither licensed nor qualified to provide investment advice.

The information contained in our report should be viewed as commercial advertisement and is not intended to be investment advice. The report is not provided to any particular individual with a view toward their individual circumstances. The information contained in our report is not an offer to buy or sell securities. We distribute opinions, comments and information free of charge exclusively to individuals who wish to receive them.

Our newsletter and website have been prepared for informational purposes only and are not intended to be used as a complete source of information on any particular company. An individual should never invest in the securities of any of the companies profiled based solely on information contained in our report. Individuals should assume that all information contained in the report about profiled companies is not trustworthy unless verified by their own independent research.

Any individual who chooses to invest in any securities should do so with caution. Investing in securities is speculative and carries a high degree of risk; you may lose some or all of the money that is invested. Always research your own investments and consult with a registered investment advisor or licensed stock broker before investing.

Information contained in our report will contain “forward looking statements” as defined under Section 27A of the Securities Act of 1933 and Section 21B of the Securities Exchange Act of 1934. Subscribers are cautioned not to place undue reliance upon these forward looking statements. These forward looking statements are subject to a number of known and unknown risks and uncertainties outside of our control that could cause actual operations or results to differ materially from those anticipated. Factors that could affect performance include, but are not limited to, those factors that are discussed in each profiled company’s most recent reports or registration statements filed with the SEC. You should consider these factors in evaluating the forward looking statements included in the report and not place undue reliance upon such statements.

We are committed to providing factual information on the companies that are profiled. However, we do not provide any assurance as to the accuracy or completeness of the information provided, including information regarding a profiled company’s plans or ability to effect any planned or proposed actions. We have no first-hand knowledge of any profiled company’s operations and therefore cannot comment on their capabilities, intent, resources, nor experience and we make no attempt to do so. Statistical information, dollar amounts, and market size data was provided by the subject company and related sources which we believe to be reliable.

To the fullest extent of the law, we will not be liable to any person or entity for the quality, accuracy, completeness, reliability, or timeliness of the information provided in the report, or for any direct, indirect, consequential, incidental, special or punitive damages that may arise out of the use of information we provide to any person or entity (including, but not limited to, lost profits, loss of opportunities, trading losses, and damages that may result from any inaccuracy or incompleteness of this information).

We encourage you to invest carefully and read investment information available at the websites of the SEC at http://www.sec.gov and FINRA at http://www.finra.org.