Shares in China New Energy (LON:CNEL) shot up nearly 60 percent this morning as investors get to grips with AIM's newest clean-tech stock.
The Chinese bio-fuel specialist joined AIM last week with a modest £655,210 placing that valued the whole company at £20.8 million. But the listing has caught investors’ imagination and it has quickly dwarfed this initial figure.
Today in its sixth trading session the stock gained 5 pence each, 57.1 percent, to trade at 13.75 pence a share. At this level the company is now worth £40 million.
CNEL is an engineering company that helps design and build bio-fuel (bioethanol and biobutanol) production plants.
The group decided to join AIM so that it could raise its profile and to gain access to additional sources of new capital in the future as it pursues its objectives.
It said it is targeting both acquisitive and organic development. “With rising fossil fuel prices and a greater demand for clean fuel, bioenergy is widely considered to be one of the key alternative fuels because of its easy acquisition and clean emissions,” CNEL said.
"The Directors believe that market dynamics will continue to remain favourable and that CNEL's established position within the industry leaves it well placed to capitalise on the expected increase in ethanol production plant projects globally.”
The group’s wholly owned subsidiary Guangdong Zhongke Tianyuan New Energy Science and Technology Co. Ltd (ZKTY) services primary producers and other bio-energy users. It is mainly focused on the Chines market but it also has customers in Romania, Taiwan, Russia, Thailand and Indonesia.
ZKTY has a proven track record, participating in 88 projects internationally. Furthermore has proprietary and patented bio-energy technology, and it has its own research and development laboratory.
Last year (ended 31 December 2010) the group made a pre-tax profit equating to £2.3 million (RMB 24 million), from revenues of £13.1million (RMB 138 million).
At that time the order book stood at RMB39 million and this was boosted substantially by a recent contract in Thailand, worth about £7.3 million (RMB 77 million).
China New Energy shares soar as investors flock to AIM's new clean-tech stock
Published: 19:55 31 May 2011 AEST