350_nol-containership
APL is one of the largest container shipping lines globally.

CHINA AUTO CORP’S stock price surged 50% overnight to close at 3.3 cents on Wed after its 49%-owned associate inked a deal with NOL’s wholly-owned container shipping arm, APL.

It ended the week at 3.4 cents, translating into a market cap of S$142 million.

Once known as Acma and famous for its Acma refrigerators and airconditioners, China Auto Corp had good news to announce: Its 49%-owned associate, Neftech Pte Ltd, has won a deal to treat the auxiliary engines of up to 50 APL container ships with nano particle additives to generate savings on fuel consumption. 

Founded by Russian scientists, Neftech is an R&D company that has developed its own proprietary applications in cavitation science, which breaks water clusters into smaller clusters or individual molecules, thereby achieving more complete fuel combustion.

In Aug 2011, Neftech said that its fuel saving system had been verified by the American Bureau of Shipping Consulting, an important maritime body which sets rules for the design and construction of vessels and marine structures.

APL conducted 6 months of field tests using Neftech’s solutions on its containership and awarded the contract after fuel savings of more than 10% exceeded expectations.

Neftech has a 30-year agreement with the manufacturer of the nano particles with a fixed price and exclusivity for the entire shipping industry.

Neftech’s other customers include major shipping lines such as Pacific International Lines, CMA CGM (world no.3 container shipper) as well as an independent power producer in Cambodia.

Not to be confused with China Auto Electronics, which is a PRC automobile wire harness manufacturer, China Auto Corp's core business is in tooling and plastic injection moulding services.  It is also a distributor of communications electronics and equipment.

Singapore company with PRC name

chewhuaseng
Chew Hua Seng

China Auto Corp is largely owned and managed by Singaporeans.

Its largest shareholder is none other than Mr Chew Hua Seng, the Singaporean founder and CEO of Raffles Education.  

According to its latest annual report, Mr Chew owns about 22% of China Auto Corp, while Neftech's executive chairman, Victor Levin, a Russian, owns about 12%.

Other prominent shareholders in China Auto Corp include former NOL director and deputy CEO Lim How Teck, GK Goh chairman Goh Geok Khim, former transport minister Yeo Cheow Tong and Oei Siu Hoa, the younger sister of billionaire investor Oei Hong Leong.

China Auto Corp reported a loss attributable to shareholders of S$6.2 million for the 9 months ended Sep 2012 after posting 3 consecutive years of losses from FY2009 to FY2011.

stk-px
The contract win caused China Auto's shares to spike by 50% after languishing below 2.5 cents for the past half a year. Bloomberg data

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