Westport Fuel Systems Inc. (WPRT - Free Report) recently announced that Weichai Westport Inc. (WWI), the company’s joint venture in China, has secured certification for its 12-liter engine integrated with the HPDI 2.0 fuel system (WP12HPDI) from the Ministry of Ecology and Environment of China (MEE).
According to Westport Fuel, this certification enables its Chinese joint venture WWI to promote and sell the heavy-duty natural gas engines equipped with HPDI technology to various truck Original Equipment Manufacturers (OEM) in China.
The certification was initially delayed due to the coronavirus pandemic-induced lockdown scenario. Nonetheless, now that the company has successfully secured the approval of MEE, each of the core HPDI component required by every engine equipped with HPDI technology and marketed by WWI, will be supplied by Westport Fuel, per the terms of the agreement announced earlier.
Westport Fuel Systems Inc. is a developer, manufacturer and supplier of advanced alternative fuel systems and components. Westport Fuel Systems’ technology and products allow the use of low-carbon fuels, such as natural gas, propane, renewable natural gas or hydrogen in combustion engines. The use of natural gas instead of petroleum-based fuel reduces emission and cost.
In 2008, the Canada-based auto company entered into a joint venture with Weichai Power, China's largest heavy-duty engine manufacturer, and Hong Kong Peterson (CNG) Equipment Ltd to form an entity named WWI. This joint-venture entity manufactures and sells alternative-fuel engines for automobiles, heavy-duty trucks, power generation and shipping applications to customers across the globe.
China’s emission regulations are one of the most rigid heavy-duty vehicle emission norms worldwide. Winning their approval for sale in China marks a glorious victory for the company and will fuel its future growth prospects in the Middle Kingdom.
Following the announcement of winning Chinese certification, shares of Westport Fuel rallied on Friday, closing at $2.25, appreciating 38.9% from the previous day’s close.
Last week, Westport Fuel signed a conclusive agreement with its joint-venture partner in India — Uno Minda Group — to sell the assets of its wholly-owned subsidiary Rohan BRC Gas Equipment Pvt. Ltd. to Minda Emer Technologies Ltd. The extended partnership between the companies will offer an enhanced and wider selection of CNG products to the Indian automotive market in a cost-effective manner.
Additionally, the company recently procured a long-term contract, entailing the supply of key electronic control units to a leading Tier One automotive supplier. This agreement, encompassing the supply of electric control units over a span of seven years, with estimated revenues of $58 million, highlights the competitiveness of the company’s electronic product offerings and manufacturing capabilities.
Zacks Rank and Other Stocks to Consider
Westport Fuel currently carries a Zacks Rank #2 (Buy). Shares of the company have declined 5.1% year to date, underperforming its industry’s decline of 3.8%.
Some other top-ranked stocks in the auto space include BRP Inc (DOOO - Free Report) , LCI Industries (LCII - Free Report) and NIU TECHADR (NIU - Free Report) . Both BRP and LCI Industries sport a Zacks Rank of 1 (Strong Buy), while NIU carries a Zacks Rank of 2 at present.
You can see the complete list of today’s Zacks #1 Rank stocks here.
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