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Waste Heat- Bigger Than Solar? |
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Sean Casten, the nation's foremost
energy expert on waste heat, believes waste heat recovery could be bigger
than solar. In a recent article on waste heat recovery, author Michael
Kanellos points out the electrical power plants designed by Thomas Edison
in 1910 were more energy efficient than today's versions.
In the article, Casten also points
out everything done in waste heat recovery has to be customized for the
particular plant it is designed for.
42% of emissions come from power
and manufacturing plants, but that number is considerably higher in China.
Waste heat recovery has much greater potential in the manufacturing center
of the world where the factories are far less efficient than there US counterpart.
The article is a great read. Click
Here, and invest a few minutes to learn more about waste heat recovery.
This morning, pre open, we got another
piece of very strong evidence suggesting China Energy Recovery' is
the leader in waste heat recovery for the worst energy wasting nation on
the planet.
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China Energy Lands Whopping
$8.9 Million Contract |
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CGYV has done it again. Consider
the facts, and it's important to keep a focus on this performance while
we continue to be bombarded by the negative information about the economy
and the equities markets:
-
2006 Revenues: $5 Million
-
2007 Revenues: $11.9 Million
-
2008 Revenues: $22.5 Million (My
estimate)
-
2009 Booked Revenues: $29 Million,
and climbing
Yes, that's right. CGYV appears
to be headed for at least another double, if not more in 2009. After all,
it's only the end of January, and the company already has signed contracts
in hand for nearly $30 million- a full 33% above all of 2008, and we still
have over 90% of the year to go.
Despite this extraordinary growth
rate, CGYV still only commands a anemic $60 million market value
at the nearly $2 level the stock currently calls home. By historical standards,
this number is absurd.
However, in the stock market, these
are absurd times. The stock market has emotionally over reacted to the
global climate. Despite rumors to the contrary, the entire Chinese nation
has not ground to a complete halt. Exports are down, but the malls are
jammed with newly minted consumers who have far less than their possession
laden US counterparts.
To keep perspective, consider the
following. Market excesses have been the norm in the first decade of the
21st Century. Right now, the market excess is fear. The market has the
highest levels of fears in history as measured by the Volatility Index
(VIX). That index skyrocketed since September the same way the price of
oil skyrocketed from January to July.
When oil was challenging the $140
level there were dozens of supposed energy geniuses who were calling for
oil to trade to $200 in short order. That bunch included the energy experts
at venerable Goldman Sachs.
Then the bubble burst, the same way
this fear bubble is going to burst. It may take some more time, but once
the extreme levels of fear subside, growth stocks will return to reasonable
valuations.
CGYV will probably earn $.10
to $.15 per share in 2009. With a 100% growth rate, a stock price of $5
is inevitable. It's just a question of time until the valuations
return to some sort of more normal levels. Ask me how long it will take
and I will truthfully respond with a cheerful "I don't know".
The chart doesn't make a lot of technical
noise. It's the chart of a small stock that got clobbered in the Fall,
has started to come back, and is currently trying to decide if the volume
can materialize to push it to higher levels.
I don't know what the company has
to do to get the attention it deserves. A quick read of today's news reveals
the client is a repeat customer, and CGYV will be retrofitting for
the Jiangsu Sopo Chemical Group, the largest producers of Acetic
Acid in China- this is one of the primary chemical used in industrial processes.
The retrofit market in China is absolutely
mind boggling. Many of the older, inefficient factories are now closing
down during this economic slow down. Thousands of factories will need to
add heat recovery systems to be competitive, and CGYV does it better
than anyone on Planet Earth.
I hope this stock finds its way North
of $2 and stays there. I don't know if it really matters. Someday, money
will chase growth in China again, and CGYV will be in the path of
a lot of that money. Owning it now puts you in a position to profit handsomely.
Here is the complete text of today's
news for your review, and it's a doozy.
| Press Release Source:
China Energy Recovery, Inc.
China Energy Recovery
Secures an $8.9 Million Contract for a Heat Recovery System Retrofit Project
for Jiangsu Sopo Chemical
*
Tuesday January 27, 2009, 7:00 am EST
- China's largest producer of acetic
acid returns to China Energy Recovery for greater energy efficiency
- Multi-million dollar energy costs
can be potentially saved annually
SHANGHAI, China, Jan.
27 /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, announced today that
it has recently entered into an EPC (Engineering, Procurement and Construction)
contract for a retrofit project (the "Project") to build a new low temperature
heat recovery system (the "System") for the sulfuric acid plant of Jiangsu
Sopo Chemical Group ("Sopo Group"). Sopo Group is a leading Chinese integrated
chemical company and China's largest producer of Acetic Acid (Glacial),
one of the major basic chemicals for industrial uses.
The Project is arranged
as a sales-type lease which offers the company higher margin compared to
regular EPC projects. The currently determined total contract value amounts
to RMB60.8 million (roughly $8.9 million USD at the prevailing exchange
rate on the date of the release) with a 4-year installment payment term.
The main low temperature heat recovery system for the Project will be specially
procured from MECS, Inc., a leading US-based company specializing in sulfuric
acid manufacturing equipment and systems and formerly part of Monsanto.
CER partners with MECS to provide the low temperature heat recovery systems
for sulfuric acid plants in China.
The primary purpose of
the System is to utilize the waste heat released from the sulfuric acid
production process and to use it to supply the main facilities with the
hot steam, which would otherwise have to be supplied from coal-fired generators.
Through this process, not only are energy costs significantly reduced but
Sopo Group is able to meet strict environmental protection requirements.
It is estimated that upon completion in early 2010, the System will help
Sopo Group save roughly 17,000 tons of coal (coal equivalent), which would
otherwise be required to produce the same amount of hot steam, and thus
prevent the release of approximately 45,000 tons of carbon dioxide emission
each year. Moreover, approximately 200,000 tons of cooling water will also
be saved annually.
"Sopo Group has been
a long-time customer of CER," stated CER's CEO, Mr Qinghuan Wu. "We are
happy they continue to see the benefits that waste energy recovery can
provide and have returned to us to build the new project. This project
is important to CER as it demonstrates our customers' recognition of CER's
strong engineering capability in carrying out EPC projects for energy recovery
systems. We are also pleased to continue to partner with MECS to utilize
their superior technology in low temperature heat recovery for sulfuric
acid plants. The Project presents a robust start of the year for CER in
2009. We shall continue to strive to provide the best value to our customers,
especially in this current economic environment, because it is the corner
stone of our sustained long term growth."
The number presented
above is the total contract value, which includes a 17% Value Added Tax
("VAT") on the domestically purchased equipment, the retainage amount for
product warranty purposes which is 5% of the total contract value and will
be recognized as deferred revenue, and the interest income due to the sales-type
lease arrangement. The total contract value would be increased to RMB71.2
million (roughly $10.4 million USD) if the Customs Duty and import VAT
would not be exempted. 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, 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:
Media
Sean
Mahoney
Ph.
310.867.0670
seamah@gmail.com
Investor
Relations
Jim
Blackman
Ph.
713.256.0369
jim@prfmonline.com
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