ferret's stock to watch: zbb energy corporation

Ferret's Stock to Watch: ZBB ENERGY CORPORATION LIMITED
08:21, Friday, 1 April 2005

MARKET TRIES TO GRASP CONCEPT OF ELECTRICITY STORAGE TECHNOLOGY

Sydney - Friday - April 1: (RWE Australian Business News)

OVERVIEW
********

ZBB Corporation Ltd (ZBB) got off to a poor start on the ASX
list, but it is early days yet and prospects look bright.

In the prospectus dated January 6, chairman Richard Payne
outlined the reasons why investors should take a stake in the company.

The issue was for a minimum of 12 million fully paid shares at
50c, payable in full on application, together with one option to
subscribe for one new share at 50c on or before 15 December 15, 2007 for
every 4 shares allotted.

The offer will enable ZBB to fund the continued
commercialisation of the company's technology, along with end product
applications, and enable the public to participate in the ownership and
growth potential of the company.

However, Mr Payne says he believes that an investment will
provide an excellent opportunity to participate in the building of a
company with the potential to become an international competitive
business.

Mr Payne said ZBB has developed patented electricity storage
technologies for utilities, industry and renewable energy applications.

ZBB's proprietary zinc-bromine battery technologies and
manufacturing know-how are now ready for commercial exploitation and
international licensing and marketing.

Its technologies represent new and exciting commercial
opportunities across a broad industry base, which the company believes
are of immediate use and benefit in the world's energy markets.

In particular, ZBB is ideally positioned to take full advantage
of a rapidly increasing "Distributed Energy" marketplace.

"Distributed Energy" places energy resources in the extremities
of the electricity grid to address problems associated with large
centralised distribution grids.

Not to be confused with energy generation, ZBB is a technology
to store energy from a multitude of generating sources, such as
utilities power, remote area generators and renewable sources such as
wind and solar.

Stored energy can then be returned for later use and at the time
it is required.

Importantly, ZBB's products are environmentally friendly and
easily recycled.

SHARE PRICE MOVEMENTS
*********************

The listing of ZBB shares on Wednesday must have been a
disappointment to directors.

The 50c shares opened at 38c and plumbed 28c before rallying,
while the free option on a 1-for-4 basis traded at 5.2c, making a total
well below the issue price.

It's hard to understand why investors ignored the stock.

Yesterday the shares finished 0.5c lower at 29c while the high
was 38c and low 28c.

The options are at 5.2c.

On listing day the company came up with what appeared to be a
very encouraging development, announcing a joint venture to take its
technology into the massive Chinese market.

More than 9.5 per cent growth in 2004 and an average annual
growth of more than 8 per cent for the past 20 years has made power
shortages common in many parts of China.

ZBB Energy aims for sales of up to $US38 million in zinc bromine
batteries from the joint venture.

China's energy needs are increasing fast on the back of rapid
economic growth.

China's expanded power generation and rising consumption is
leading to growing environmental problems, with an estimated 13 per cent
of its arable land affected by pollution.

The Chinese Government has set as a top priority the need to
generate increasing amounts of energy from renewable sources, and to
increase the efficiency of existing supplies, not only to reduce
environmental damage but also to counter rising global oil and coal
costs.

ZBB Energy will hold 49 per cent of the new JV company with the
balance held by China Century Group Ltd - a newly formed Australian
company investing in high growth areas of the Chinese economy.

The new company will be formed with an initial capital of
$510,000 contributed by the parties.

Initially, the battery modules will be sub-assembled in China
with certain component parts supplied locally.

Eventually, the JV will move to full production in China at a
time determined by ZBB.

Subject to the JV company achieving the following annual sales
objectives on a take or pay basis, the licence issued by ZBB to the JV
company will be an exclusive licence for China, Macau and Hong Kong,
otherwise the licence will be non-exclusive.

The sales objectives are:

* 2 MWh being 4 x 500 kWh (each of 10 x 50 kWh modules) for
delivery and installation as initial commercial test units before June
30, 2006.

* 10 MWh (200 x 50 kWh modules) before June 30, 2007.

* 25 MWh (500 x 50 kWh modules) before June 30, 2008.

* 60 MWh (1200 x 50 kWh modules) before June 30, 2009.

At ZBB's current sales price of $US400 per kWh, the sales
targets represent a potential $US38 million of sales revenue to ZBB.

BACKGROUND
**********

ZBB Corporation is already operating in the United States from a
leased manufacturing facility in Menomonee Falls, Wisconsin, occupying
approximately 35,000sq feet for its production, assembly and
administration headquarters.

It moved into this facility in 2002 and purchased new
manufacturing equipment to expand its battery cell stack production
capacity to 20 MWh annually.

The existing facility in Menomonee Falls is suitable to
accommodate initial expansion of capacity to 100 MWh annually.

ZBB Corporation's Australian subsidiary occupies leased,
self-contained research and development facilities in Bibra Lake,
Western Australia, after previously occupying sub-leased laboratory and
workshop facilities at Murdoch University.

ENDS
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I don't hold ZBB