John, here's your online article:
hfxnews.southam.ca
Sunday, April 18, 1999
Market buzzing for fuel-cell technology
By Eric Hicks
Anyone watching the Toronto Stock Exchange on Friday would have noticed a halt in trading of Global Thermoelectric Inc. or GLE stock. When the stock re-opened, it soared to $15 from $3.60 at the day's opening.
So what is all the fuss about?
Global designs and manufactures electric fuel cells or, more precisely, solid-oxide fuel cells. The fuel cells produce electricity by combining oxygen and hydrogen with the only byproducts being heat and water. They are more efficient than internal-combustion engines and produce none of the harmful pollutants.
Many readers will recall the stellar stock performance of another Canadian fuel-cell manufacturer, Ballard Power Systems, whose stock has soared in recent years after forging strategic relationships with the likes of DaimlerChrysler, Ford, and Hitachi.
Global is a Calgary-based company that concentrates on producing fuel cells for the production of electricity and heat in remote locations. The company also produces fuel cells for crew-compartment heaters in military vehicles. Their fuel-cell uses natural gas or propane.
Recent test results and partnership agreements have created a flurry of activity on the stock. In February, the company announced a $1-million project to produce thermoelectric generators for a natural gas pipeline project in Argentina and Chile.
At the end of March, the company announced it was joining an elite group of European research institutes that aims to improve the durability of solid- oxide fuel cells. Global was the only North American partner invited to join the group.
Two weeks ago, Global announced it had reached its monthly production goal of 200 A20 crew compartment heaters for tracked military vehicles. During the year, Global plans to deliver 200 heaters a month for U.S. army combat vehicles.
On April 8, the company announced it had achieved record power output in the first test of a new proprietary design for fuel cells. At 800 C, Global management said, the new power system produced twice the power of any they had previously tested.
This means the firm might be able to significantly reduce the size of fuel-cell systems and, because of their abilities to work at lower temperatures, use less expensive materials in their design.
On Friday, Global announced a commitment and initial order by Delphi Automotive Systems to develop a solid oxide fuel system.
Delphi is the world's largest supplier of automotive components with annual revenues of $28.5 billion US and more than 200,000 employees.
"We were chosen to work with Delphi because of our advanced fuel-cell technology, proprietary sealing systems, and our recent breakthroughs in power capability," said Jim Lumsden, vice-president of research and development at Global.
The stock chart shows Global shares traded steadily this year at about $0.60 until the April 8 announcement when it jumped to more than $5. Friday's announcement drove the stock from the $3.60 level well into the teens and settled back to the $9 level by the end of the day.
Fuel-cell technology is still in its infancy, but recent tests are proving it offers potential in many areas where internal-combustion engines are used now.
Global Thermoelectric Inc. has more than 16 million shares outstanding and produces earnings.
Investors should understand risks are still high, though, as this is a small company in a relatively new field.
Eric Hicks is an investment adviser and the branch manager of the Halifax office of Levesque Securities Inc. Material in this column is for information only and does not necessarily represent the views of Levesque Securities Inc.
IJ |
