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OTC Journal Members:
| "To achieve a 22 per cent increase in energy
availability in developing countries by 2020 would cost about $2,000bn
(€1,600bn, £1,300bn), according to the International Energy
Agency.
McKinsey Global Institute, the research arm
of the consultancy, has found that the same end could be achieved for $90bn
a year by focusing on energy efficiency improvements with positive returns.
"
From the London Financial Times-
October 29th |
 |
Visibility In 2009 For China
Energy: The Holy Grail For This Market |
|
The London Financial Times pointed
out on October 29th that Energy Efficiency was the best return on
investment in a world looking to conserve energy. China Energy Recovery
is at the forefront of that technology in the least energy efficient place
in the world.
We've had a bit of luck with CGYV
these last two days. At Wednesday's close, the stock more than doubled
off the low print of $.90 on Tuesday. As I stated in Tuesday's
publication- you have now seen the potential power of a high volume stop
and reverse. I wouldn't be surprised to learn this was the only stock in
the microcap world to double in price this week.
Today, just prior to the market's
open, CGYV announced the signing of a single contract in the amount
of $11.6 million. The significance of this is monumental
on a number of fronts, and should serve to open the investment community's
eyes to the scope of what CGYV is achieving. For starters- consider
the magnitude- this one contract is as much revenue as the company
delivered in all of 2007.
You are looking at the image of a
gigantic paper mill in China, and the black river that runs in front
of it. This factory pours massive amounts of heat and pollutants into the
air, and spills tons of a toxic substance known as "Black Licorice"
into the river. Both the Chinese Government and industry know these practices
simply have to stop.
This $11.6 million contract
will eliminate the pollution and wasted energy from a gigantic factory
just like this one by processing the "Black Licorice" in a massive boiler.
It will handle 1200 tons of the stuff everyday. The system will create
145
tons of steam per hour, and generate 12 Megawatts of energy.
The steam will drive a turbine that will be used to power the factory.
Net result- pollution gone and massive energy cost savings. Just so you
understand the scope of this- 12 Megawatts of electricity
is enough to power about 17,000 homes. Clearly, this is a massive
undertaking.
If you aren't starting the understand
the coverage and attention China Energy Recovery will eventually
get out of these kinds of projects, you simply are not in touch with global
needs over the coming years.
Now, consider some of the other disclosures
in the press release. The project is being funded by the Asian Development
Bank. That's the Mac Daddy infrastucture bank of Asia. To learn more
about the ADB, simply click
here. The ADB loans about $7 billion annually to
projects committed to improving the life of Asian people in Pacific Rim
countries.
Most importantly for the financial
community, CGYV disclosed in today's news it already has $19
million in contracts booked for 2009, and expects to deliver substantial
growth over 2008.
This is what the analysts call "visibility",
and China Energy Recovery is one of the only companies I
know that is delivering visible growth in 2009. Analysts absolutely love
this, especially against a global back drop of companies calling 2009 a
mystery.
It boils down to this. I introduced
the right company to you at the worst possible time since Jonathan's
Coffee House put up the first stock prices on a piece of paper in 1690.
Frankly, the timing sucked, but the idea is fantastic, and now you are
just starting to see it.
Here's a quick recap of the past.
In 2006, CGYV delivered $5 million in revs and a small
loss. In 2007, CGYV delivered about $12 million in revs and
a nice profit. In 2008, CGYV will deliver about $22 to $23
million, and a nice profit. $19 million is already booked
in 2009, and the company is willing to say it expects significant
growth over 2008. Where are we going price wise? Do the math.
The chart is revealing, but it's
very tough to predict where we go from here in the short term. Look at
the massive surge in volume and price over the past two days. Technically,
the stock was a toxic mess just like the factories CGYV cleans up.
As I published on Tuesday, the toxic mess caused by forced liquidations
from failing funds was nothing but an opportunity. Some smart investors
came in and cleaned up the mess Tuesday morning, and look at the result.
Technically, I don't know where this
stock is going to go when the world learns about today's news. By the time
you are reading this, CGYV could be much higher than the closing
price of $1.90, or it could be lower on a "sell the news" move.
If it is lower, I strongly recommend you invest in this stock.
If it's higher, it might be prudent
to wait for a retracement before taking a position, or adding to your existing
one. If the stock really surges, it might not be a bad idea to take a little
money off the table if you had the intestinal fortitude to pick it up while
it was cheap.
Longer term, this stock has legs
for much higher levels. It has to get to $2.12 for the institutions
(the ones who are left) to break even from the $8.5 million financing.
After September and October, this
is a welcome development. At least for a couple of days, we can enjoy a
great ride with the expectation of more to come.
Here is the complete text of today's
news for your review:
| Press Release Source:
China Energy Recovery, Inc.
China Energy Recovery
Announces Signing of a $11.6 Million Contract to Build World's Largest
Straw Pulp Alkali Recovery System
Thursday November 6,
7:00 am ET
A Key Pollution/Waste Treatment
Project Sponsored by Asian Development Bank
Contract Expected to Result in
Continued Growth into 2009
-- System will have 12MW
of heat energy generation capacity estimated to recover 145 tons of alkali
per day for reuse - bringing multiple cost saving benefits
SHANGHAI, China--(BUSINESS
WIRE)--China Energy Recovery, Inc. (OTCBB: CGYV - News) ("CER"), a leader
in the waste heat energy recovery sector of the alternative energy industry,
announced today that it has executed contracts for designing and manufacturing
the world’s largest straw pulp alkali recovery system in alliance with
CMIIC Engineering & Construction Corporation, one of China’s largest
industrial construction firms. The recovery system is a key part of the
Shandong Hai River Basin Pollution Control Project sponsored by the Asian
Development Bank. The total project cost is estimated to be RMB95 million
(approximately US$13.9 million based on the exchange rate as of date of
this press release date), of which RMB79 million (approximately US$11.6
million) represents the estimated cost for the alkali recovery system that
CER will design and manufacture leveraging its own technology.
The system is to be built
for Shandong Tralin Group (“Tralin”), one of the top paper manufacturers
in China. The CER technology will treat the toxic residual black liquor
generated from the pulp making process to create cleaner discharge. The
system is designed to process 1,200 tons of black liquor per day and expected
to enable Tralin to meet the government mandate on minimizing pollutant
discharge.
The system is also designed
to generate 145 tons of steam per hour. This is equivalent to nearly 12MW
of heat energy generation capacity and expected to enable Tralin to reduce
the cost of purchasing steam from outside vendors needed to power its paper
making facility. Additionally, the system is expected to recover 195 tons
of alkali per day, which can be reused in the pulp making process, thus
further reducing material costs and bringing multiple benefits to Tralin.
“We expect that the system
will be the largest of its kind in the world upon completion and designed
and developed entirely based on our own technology. This signifies an important
milestone for our further expansion in the market of waste treatment and
energy recovery of the paper-making industry both in China and abroad,”
commented CER Chairman of the Board and CEO, Mr. Qinghuan Wu. “We’re pleased
to see that both the Asian Development Bank and Shandong Tralin Group have
seen the value that CER can bring to them by endorsing our technology and
system which we believe can specifically address their problems.”
Mr. Wu also commented,
“With the addition of this project, we have already secured orders with
a total contract value of approximately RMB130 million (US$19 million)
for 2009. We have seen a steady flow of new business bookings, which we
expect will bring continued substantial growth in 2009. Our dual growth
drivers of reducing energy costs while reducing pollutants are continuing
to drive our growth. The current global economic slowdown does not appear
to affect that.”
The numbers presented
above are total contract values, which include a 17% value added tax and
the retainage amount for product warranty purposes, which is 5% of the
total contract values and will be recognized as deferred revenues. 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 energy recovery systems, with a primary focus 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, Turkey, Korea, Vietnam and Malaysia. CER focuses on numerous
industries in which a rapid payback on invested capital is achieved by
its customers, including: chemical, petro-chemicals, refining (including
Ethanol refining), coke processing, and the manufacture of paper, cement
and steel. 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, 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 SEC, including CER's Current Report on Form 8-K filed with the
Securities and Exchange Commission on April 21, 2008.
Contact:
for China Energy Recovery,
Inc.
Media
Sean Mahoney, 310-867-0670
seamah@gmail.com
or
Investor Relations
Jim Blackman, 713-256-0369
jim@prfmonline.com
Source: China Energy
Recovery, Inc. |
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