Getting your foot in the door with a major corporation is a common goal for any company, big or small. If a job is performed well and services are exemplary, it often leads to bigger and better things in the future, which obviously drives revenue and company value. Such an achievement was announced Tuesday by China Keli Electric Company Ltd. (TSX-Venture:ZKL) as news of a nearly-half-million-dollar contract was released by the Company.
Based in Vancouver, China Keli is a company that develops, manufactures and installs high-voltage electrical components and equipment, including preassembled mini-substations, electrical controllers, pressurized/vacuumed switchgears and circuit breakers in the People's Republic of China.
This morning’s news featured China Keli’s announcement of signing a sales agreement with Jiangsu Province-based Guo Ao Electric Technology Company. The agreement is for the supply of 12 start devices for 10-kilovolt air compressors and is valued at approximately $450,000. The starters are part of the infrastructure for the multi-billion-dollar Foxconn plant that is being built in part by industry behemoth Guo Ao Electric.
The new $5-billion factory in Chengdu is slated to employ more than 100,000 people for Foxconn as Apple's manufacturing partner and producer of iPads. Production is already happening in the new plant, but final construction will allow for Foxconn to produce 40 million iPads per year.
Commenting on the new order and potential things to come, Lou Meng Cheong, China Keli’s Chief Executive Officer, said "We're pleased that one of our products has been selected by such a well-known company. Although we're sure this isn't the biggest order we will see in the next few months, it's always nice to secure an order for nearly half a million dollars. We're very confident that we'll see some meaningful rewards for the sales and marketing effort in which we've invested over the last few months."
China Keli targets several markets including electrical transmission and distribution systems, Smart Grid, and the transportation sector (railways, subways, street lighting, etc.). The Company has seen an increase in revenues as was recently reported. For the three months ended January 31, 2011, China Keli reported total revenue of $2.99 million, an increase of approximately 17% over the same period in fiscal 2010 ($2.56 million), with gross profit of $280,000, representing a rise of nearly 36% over the same period in 2010.
Investors have been responding favourably to the news over the last few weeks, after shares touched a new multi-year low at $0.195 in March and held a base around 20 cents per hare until the recent news hit the wires to wind down March and kick off April. Shares were up again in Tuesday’s trading, albeit on low volume, to print 25 cents as the trading day approached the closing bell.
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