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China
Energy's Chart on the Brink |
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It
was only a week ago we reviewed China
Energy Recovery Incorporated's (CGYV) $32.7 million backlog
for the next twelve months. Today, we're continuing to see that
growth in the top line by seeing growth in the scope and size of their
projects - the latest one's worth $4.8 million.
We'll take a
look at the news below, but we want to focus more on the chart this
week.
The full press
release is below, as always. Here's a quick round-up and some perspective
though.
China Energy
Recovery (or CER) just completed a $4.8 million project for a nickel mine
in New Guinea. Three waste-heat boilers were installed at the mine, as
requested by China Enfi Engineering Corporation... one of China's
biggest industrial construction firms (and a subsidiary of Global
500 corporation China Metallurgical Group).
 That's
not the biggest single 'build' ever for the company, but it's certainly
a big one.
Of the $4.8
million worth of revenue drawn, about $3.7 million of it will be booked
in the current quarter.
Did you happen
to notice through whom the contract was awarded though?
In our last
newsletter we mentioned China Energy Recovery had to bid to win much of
their business, which they've clearly been able to do with some success
as well as profitability. With this particular contract, however,
CER was chosen by a major - and we mean major - construction firm.
The press release
didn't specify if CER had to bid for the New Guinea project or not, though
we do know this waste-heat boiler build wasn't the first
one China Enfi Engineering chose China Energy Recovery to complete.
Point being,
CER is working with some pretty big guns in the industrial construction
world. And, for China Metallurgical Group to choose China Energy Recovery
at least twice speaks well of China Energy Recovery.
That's not the
kind if information that makes the stock shoot higher, but it does help
lay a strong foundation. And speaking of the stock....
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CGYV
Knocking on the Door |
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Since January
or so we've been talking about the key resistance levels for CGYV's chart.
The $2.10 and $2.20 mark both came up more than once (and they're still
critical lines in the sand), but in the meantime it seems as if
$2.00 has become the more important inflection point.
 How
so? Take a look at the nearby chart.
After reaching
$2.20 in January 27th, and hitting a high of $2.09 on January 28th, CGYV
shares haven't moved above $2.00.... though the $2.00 mark has been
touched 12 different times (with today being the 12th).
To see it happen
a few times wouldn't mean much. To see it happen 12 times - and with
such precision - is meaningful. For whatever reason, $2.00 is a
major resistance level. That's not necessarily a bad thing though.
One of the upsides
to strong resistance lines and a persistent attack on them is this... the
longer the wind up, the longer and stronger the breakout is once it gets
traction. Obviously we can't talk in certainties about it happening
here, but we can say this is the kind of chart that would have a
lot of traders just waiting to pounce on, once CGYV started to trade
at just $2.01 or $2.02. That's the spark that could start the fire.
That's not the
only
compelling part about this chart though. It's not even the
most
compelling part.
All the while
$2.00 has been tested as resistance, we've watched CGYV make a series of
higher and higher lows. That's the rising support line on the chart.
You don't have
to be Einstein to figure out the rising support line and the flat resistance
line are close to intercepting one another, which means the stock is going
to be forced out of the wedge shape soon.., one way or another.
Which direction
will it take? Like we said, there are no certainties, but we believe
the odds favor an upside move rather than a retreat. All it would likely
take is a brief move above $2.01 to jump-start a wave of buying.
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By
The Way... |
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Between the
top and bottom line growth in store for this year, we think the stock
is 'worth' $4.00 or more. Will it get there? Not sure, but a
move above $2.00 would be a huge first step.
Added Bonus:
Most funds, pensions, and money managers can't buy a stock priced under
$2.00, in accordance with their own investment policies. If CGYV can get
and stay above $2.00 for a few days though, that would open up a whole
new universe of potential buyers.
Here's the press
release.
China Energy
Recovery Completes Three Sets of Waste Heat Recovery Systems for a Large
Nickel Mine Project in Papua New Guinea
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Total contract value
amounts to US$4.85 million & revenue to be recognized in Q2 2009 per
US GAAP would be roughly US$3.7 million
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Partnered with Global
500 China Metallurgical Group's engineering arm
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Combined systems
would have an equivalent heat energy generation capacity of 43MW
SHANGHAI, May 5 /PRNewswire-Asia/
-- China Energy Recovery, Inc. (OTC Bulletin Board: CGYV; ISIN: US16943V2060;
"CER"), a leader in the waste heat energy recovery sector of the industrial
energy efficiency industry, today announced that the company has completed
a large order for three sets of waste heat recovery systems for a large
nickel mine project in Papua New Guinea. The total contract value is RMB33.15
million (approximately US$4.85 million based on the exchange rate as of
the date of this press release) and the corresponding revenue to be recognized
in Q2 2009 according to US GAAP (please see below for revenue recognition
details) would amount to roughly RMB25.5 million (approximately US$3.7
million).
China Enfi Engineering
Corporation ("Enfi"), one of China's largest engineering firms for overseas
industrial construction and a subsidiary of China Metallurgical Group,
a Global 500 corporation, is the main contractor for the nickel mine project.
CER has been a partner with Enfi for numerous projects of waste heat recovery
systems in recent years.
"We are very proud
that China Enfi Engineering Corporation has again chosen CER as a partner
in developing the waste heat energy recovery systems for its large scale
overseas industrial projects," commented Mr. Qinghuan Wu, Chairman and
CEO of China Energy Recovery. "Once again, we are able to demonstrate our
strong technological capability in waste heat recovery with a valuable
engineering partner, and broaden our market reach beyond our traditional
areas of operation. As we continue to market our expertise into other regions
and areas, we will continue to develop advanced technologies and systems
to adapt to new customer types. This new nickel mine project is a good
example of adapting our technology into new and developing industries."
These three sets
of waste heat energy recovery systems are designed to generate approximately
215 tons of steam per hour in total. This is equivalent to a heat energy
generation capacity of nearly 43MW. These systems are estimated to achieve
an annual saving of roughly 93,000 tons of coal (coal equivalent), which
would otherwise be required to produce the same amount of power, and will
consequently reduce roughly 247,000 tons of carbon dioxide emissions from
the burning of that coal each year.
The contract value
presented above includes a 17% value added tax ("VAT") and a retainage
for product warranty purpose, which will be recognized as deferred revenue.
VAT and the retainage are excluded for revenue recognition purpose for
the current period according to US GAAP. The numbers presented represent
values based on current exchange rates. Changes in the currency exchange
rates would result in a commensurate change in contract value.
What is Waste
Heat Energy Recovery?
Industrial facilities
release significant amounts of excess heat into the atmosphere in the form
of hot exhaust gases or high-pressure steam. Energy recovery is the process
of recovering vast amounts of that wasted energy and converting it into
usable heat energy or electricity, dramatically lowering energy costs.
Energy recovery systems are also capable of capturing harmful pollutants
that would otherwise be released into the environment. It is estimated
that if energy currently wasted by all the U.S. industrial facilities could
be recovered, it could produce power equivalent to 20% of U.S. electricity
generation capacity without burning any additional fossil fuel, and could
help many industries to meet stringent environmental regulations.
About China
Energy Recovery, Inc.
CER is an international
leader in designing, manufacturing and installing waste heat energy recovery
systems which provide facilities with greater energy efficiency. The company's
primary focus is on the Chinese market. CER's technology captures industrial
waste energy to produce low-cost electrical power, enabling industrial
manufacturers to reduce their energy costs, shrink their emissions footprint,
and generate sellable emissions credits. CER has deployed its systems throughout
China and in such international markets as Egypt, Korea, Vietnam and Malaysia.
CER focuses on numerous industries in which a rapid payback on invested
capital is achieved by its customers, including: chemical, paper manufacturing,
refining (including methanol refining), etc. CER continues to invest in
R&D and plans to build China's first state-of-the-art energy recovery
system research and fabrication facility to allow it to meet the increased
demand for its products and services. For more information on CER, please
visit: http://www.chinaenergyrecovery.com/s/Home.asp
. Information on CER's website does not comprise a part of this press release.
Forward-Looking
Statement Disclaimer
This press release
includes "forward-looking statements" within the meaning of the Securities
Litigation Reform Act of 1995, as amended. All statements, other than statements
of historical fact, included in the press release that address activities,
events or developments that CER believes or anticipates will or may occur
in the future are forward-looking statements. These statements are based
on certain assumptions made based on experience, expected future developments
and other factors that CER believes are appropriate under the circumstances.
Such statements are subject to a number of assumptions, risks and uncertainties,
many of which are beyond the control of CER and may not materialize, including,
without limitation, the efficacy and market acceptance of CER's products
and services, CER's ability to execute on its business plan and strategies
and CER's ability to successfully complete orders and collect revenues
therefrom. Investors are cautioned that any such statements are not guarantees
of future performance. Actual results or developments may differ materially
from those projected in the forward-looking statements as a result of many
factors. Furthermore, CER does not intend (and is not obligated) to update
publicly any forward-looking statements, except as required by law. The
contents of this release should be considered in conjunction with the warnings
and cautionary statements contained in CER's filings with the Securities
and Exchange Commission, including CER's Annual Report on Form 10-K filed
with the Securities and Exchange Commission on March 30, 2009.
For more information,
please contact:
Media
Sean Mahoney
Tel: +1-310-867-0670
Email: seamah@gmail.com
Investor Relations
Jim Blackman
Tel: +1-713-256-0369
Email: jim@prfmonline.com |
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Which
Weighs More - a Ton of Coal, or a Ton of Gaseous CO2? |
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| How
does the old riddle go? Which weighs more - a ton of feathers or a ton
of bricks? The knee-jerk answer is that a ton of bricks has to be heavier
than a ton of feathers .....since bricks are heavier than feathers. Given
a couple of seconds to apply some logic to your answer though, obviously
they weigh the same - a ton is a ton no matter what it's made of.
One
of our astute readers asked a similar question regarding some of the data
he found in a recent press release ....which weighs more - a ton of coal
or a ton of CO2?
Specifically,
he wondered how every pound of coal that's burned emits somewhere between
2 and 3 pounds of carbon dioxide, as described by this snippet from China
Energy's announcement last week (and this week as well):
"The
energy recovery systems under these backlog orders, upon completion, are
expected to generate nearly 174MW heat energy. This is equivalent to achieving
a total annual saving of roughly 370,000 tons of coal (coal equivalent),
which would otherwise be required to produce the same amount of power,
and consequently the reduction of roughly 1,000,000 tons of carbon dioxide
emissions from burning of that coal each year."
The
answer? A 'ton' of CO2 gas doesn't actually weigh a ton. Technically
gas has no weight, so for anyone to compare the weight of a solid to the
weight of a gas is comparing apples to oranges (at best). However, scientifically
speaking, CO2 gas can be said to have weight or the equivalent to weight....
it's
just not the kind of weight you and I understand by putting on a scale.
So
to answer the question "Which weighs more - a ton of coal or a ton of
CO2?", a ton of coal actually weighs more.
That's
the simplified, conceptual explanation; you may want to contact the company
for a more scientific explanation. |
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Updated: 8:15 pm PDT (03:15 GMT), November 2, 2010
