WHILE nobody was looking, the share price of Orbital Engine Corp. has scooted past $2 to hit its highest price in almost a decade.
WHILE nobody was looking, the share price of Orbital Engine Corp. has scooted past $2 to hit its highest price in almost a decade.
It seems the Balcatta-based long-time wannabe technology wonder has finally turned into a gonnabe.
The market is expecting the $9.9 million loss announced this week to be turned into a profit in the current year.
Enthusiasm has been generated by a string of international licensing agreements clinched by Orbital for its direct fuel injection system, and a belief that the company may soon win a spot in an ASX stock index.
This week, Chinese Government officials in Hainan province gave the green light for the local Sundiro scooter concern to begin using the Perth technology in its engines.
Sundiro, which also has a plant in Shanghai, is one of the major motor scooter manufacturers in the country, and it will be wheeling out close to a million machines next year.
China is the biggest producer of motorcycles in the world, making more than 11 million annually.
They help create the dense clouds of blue smoke that are threatening to asphyxiate major Chinese cities. The problem got up the nose of the Ministry for the Environment in Beijing, which clamped a ban on more motorcycles coming into the capital.
Now motor scooters are becoming very popular. From literally a standing start three years ago, they will soon account for a third of total two-wheel motor sales. Orbital will be able to target some of the other 40 scooter manufacturers in China with its fuel injection system which, it is claimed, achieves an 80 per cent drop in noxious emission and reduces fuel consumption by 45 per cent.
This year, it has doubled the number of customers that have moved from testing its technology, to using it in actual production.
The most recent success was an agreement with Saab, the Swedish unit of General Motors, which is likely to be incorporating the system in its engines within the year.
It has been a long and frustrating wait for Orbital shareholders. Many gave up when the price plumbed a low of 50c last year.
Now stockbrokers are hanging “buy” labels on the shares Melbourne firm E L&C Baillieu believes Orbital is on the verge of generating “significant returns” from its technology.
It regards the catalyst as the pressure towards strict exhaust emission targets world-wide that have to be met very soon, with legislation due to come into play in 2003-06.
The company is now valued on the market at approaching $800 million. One more push, say its boosters, and the shares could qualify for inclusion in the S&P 100 ASX index.
