NF Energy: Speculative Buy In The Clean-Tech Space

| About: NF Energy (NFEC)

NF Energy Saving Corp. (NASDAQ:NFEC) is a provider of integrated energy conservation solutions utilizing energy-saving equipment, technical services and energy management solutions with the following investment highlights:

  1. Strong revenue growth: up 53% from 2007 to 2008 and expected increase of at least 60% in 2009
  2. New manufacturing facility under construction that should be completed within six months, focused on additional wind energy equipment manufacturing capacity
  3. Prime beneficiary of China's push to promote energy efficiency and renewable energy initiatives and the strong current growth in the power industry as the Chinese government's recent five-year plan is funded for 4 trillion RMB (nearly US$600 billion)
  4. Growth opportunities that include expanding and diversifying their product, service and consulting offerings within the clean energy infrastructure space

NF Energy Saving provides energy savings and emissions reduction equipment and services for China's rapidly growing cogeneration sector. The company provides integrated energy conservation solutions utilizing energy saving equipment, technical services and energy management solutions. The company manufactures energy efficient flow control systems and provides services to improve energy efficiency and reduce emissions.

The company also provides energy saving technology consulting, optimization design services, energy saving reconstruction of pipeline networks and contractual energy management services for China's electric power, petrochemical, coal, metallurgy and construction industries as well as institutions and municipalities.

The company's subsidiaries are Nengfa Energy and Nengfa Sales, 99% owned by Nengfa Energy. Nengfa Energy manufactures, markets and distributes energy saving flow control equipment, wind power equipment and fittings, and a variety of flow control components including industrial valves, hydraulic systems and electric control systems, all widely used in water supply and sewage systems, coal and gas fields, power generation stations and the petroleum and chemical industries. Flow control system equipment is the key factor in determining the efficiency of pipeline systems.

Nengfa Energy also provides energy saving technical reconstruction and consulting services, including energy saving technology consulting, design optimization services, energy saving reconstruction and retrofitting of pipeline networks and contractual energy management services. Nengfa Sales is primarily involved in the sale and marketing of valve components and products.

The company categorizes its business into two reportable segments, heavy manufacturing and energy saving. Heavy manufacturing includes the production of valves and components and the provision of valve improvement and engineering services. Energy saving includes the production of wind energy equipment, the provision of energy saving related reengineering and technical services, and long-term construction projects.

On August 26, the company conducted a 1:3 reverse stock split, and changed its trading symbol from NFES to NFEC. The primary reasons for the reverse split were to potentially increase investor interest and to improve the marketability and liquidity of the stock, to potentially facilitate an alternate listing of the company's stock onto a national exchange (from its current OTCBB trading status), and to potentially reduce trading costs in the stock due to brokers' commissions on lower-priced stocks.

Disclosure: No position

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.