Leading innovation is our main goal, says Company Secretary Steve Au-Yeung. Photo: Andrew Vanburen
CHINA ENERGINE International (Holdings) Ltd (HK: 1185) occupies a very important – and unique – position in China’s economy.
It has over the years helped to keep us in touch with both weather conditions through satellites, and loved ones through satellite-based cellular communications, broadband networks and GPS technology.
It has helped propel us down highways with automotive control systems, rocket us up tall buildings with elevator motor systems, and rocket us into the heavens with group participation in China’s manned space program, which put the country’s first taikonaut into orbit six years ago with the Shenzhou rocket via unit Castelecom www.castelecom.com.
All of these high-tech engineering pursuits are very much behind-the-scenes technical support undertakings, and its ties to the country’s upper echelons of leadership via its participation in aerospace and satellite technology.
And now the Hong Kong-listed firm is using its expertise in a wide variety of engineering, aerospace and high-technology applications to venture further afield into a very hot and growing sector – wind power.
The innovative group hopes to avoid blustery market conditions in some sectors by focusing more on a high-growth industry like wind power technology, and Company Secretary Mr. Steve Au-Yeung recently met with NextInsight, Aries Consulting and a group of Greater China fund managers to explain how.
Throwing fate to the four winds
A wind farm in South Korea. Photo by Leong Chan Teik
China Energine is very excited about prospects for the wind power sector in the country.
And with the world’s attention on the ongoing mega-summit in Copenhagen meant to brainstorm on possible solutions to global environmental concerns, Mr. Au-Yeung says that now, not later, is the best time to invest in China’s wind power sector before a ground-floor entry is no longer possible.
“Our share price has skyrocketed recently. One of our major advantages is that our majority shareholder has contributed a lot of technology and expertise to our operations,” he said, adding that the firm placed 345 mln shares last month.
He said the company currently had four wind farms in China, and that this was destined to grow by a significant amount.
“China Energine plans to build up to 10 mln KW wind power capacity based in Inner Mongolia, Gansu, Xinjiang, Hebei and Jiangsu provinces,” Mr. Au-Yeung said.
China Energine currently had three major wind power products in its product portfolio: 900 KW direct-drive wind turbines, 1,500 KW variable-speed constant frequency wind turbines and 2,000 KW permanent-magnet direct-drive wind turbines.
“Our permanent-magnet motors are used in aerospace, defense, equipment manufacturing and even elevators,” he said.
The company’s four wind farms are:
1) Jilin Tongyu (200 MW)
2) Jiangsu Rudong (150 MW)
3) Aerospace Longyuan Benxi (30 MW)
4) Inner Mongolia Energine Xinghe Wind Farm (under construction: 49.5 MW)
“We are becoming more and more focused on developing wind power equipment including generators and turbines, and also blades. For our four existing wind farms, we have outright ownership for 55% of their equity, and we have listed 45%,” he said.
When asked to explain the origin of the company’s somewhat unique name, Mr. Au-Yeung, who has been with the firm for four years, said Energine is a combination of the words “Energy” and “Engine.”
“Our current expansion in the wind power sector via our New Energy Division (mills and turbines) does not mean our group is moving away from our traditional technological and engineering strengths,” he said.
And these were considerable, as Energine – which listed in Hong Kong in 1997 – seemed to have its fingers in a lot of pots, yet all connected by either “energy” or “engines” as well as communication in some way.
“We help facilitate wireless signals in tunnels and elevators through our transmitters, which is related to our early focus on GPS (global positioning system) and satellite equipment,” he said, adding that its proprietary satellite technology received approval in 2005.
“Today it is utilized quite a bit at airports around China.”
China Energine has a market cap of HK$4 billion. Its stock's 52-week low and high are 25 HK cts and HK$1.46, respectively.
Finding its way
For those of us who have ever asked directions by cell phone, or relied on our dashboard-mounted GPS systems to find our way to family get-togethers over the Holidays, we have Energine to thank in part.
And the company is also committed to making our trek to grandma’s a little less burdensome for the environment.
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These included sealing systems that helped drown out traffic noise from outside, making highway journeys much more relaxing and keeping cool – or warm – air inside, depending on the season.
“Green cars and their systemic component requirements are a steady source of recurring income for us, a cash cow of sorts,” he said.
He added that these were so far mainly sold to PRC auto producers as pollution control systems, and that Energine did work closely with Delphi, the well-known US auto parts maker.
“And despite the recession in the US market and the auto industry troubles there, this has not affected out partnership with Delphi or (Detroit based auto sealing firm) Henninges Automotive.”
And China Energine did not stop at the surface, but was willing to dig deeper, as it was now a notable player in China’s rare-earth metals mining and development sector.
With such a heavy exposure to a wide range of high-tech areas, it was only natural that NextInsight would ask Mr. Au-Yueng about the importance of research and development to Energine.
“R&D and leading innovation is our main goal to ensure continued growth going forward,” he said.