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Author: jimpiccard Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 3296  
Subject: Re: WPT - Engines to Power Buses in Vancouver Date: 12/10/2005 11:56 AM
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My feeling is that no city/town/company is going to order thousands of buses until they see "a hundred here, a few dozen there" running successfully.

Actually, Beijing Transit has 2,700 of these running on the streets of Beijing right now. (Beijing is currently their largest customer; and likely to stay that way for the next 2 years. But if I'M not mistaken, the other cities in China that have bought the engines have
And while Beijing's last order was 11 months ago.....it was not only a repeat order, but the largest order to date, at over 400 units.

In one of my earliest posts on WPT.TO I opined that management expecting large Beijing orders in 2004 and 2005 may be unrealistic, given that, at the same time, the company decided to open local production lines in both China and India. After all, Beijing's single driving deadline on natural gas transit engine installment is the 2008 Olympics--something about the athletes wanting to be able to breathe air, and all that (Beijing officially now has the world's most polluted air, by the way......not the best title at the beginning of 2006 with the Olympics in 2008....during the summer.........).

http://www.guardian.co.uk/international/story/0,3604,1605041,00.html

WPT.TO has publicly stated that locally-produced engines are at least 30% cheaper than the North American-produced ones; so IF they have delayed more orders simply to be able to buy local, that has always made sense to me.

The reason WPT.TO/CWI (Cummins Westport) is not far off of its business plan, even with huge Chinese orders not in place, is because while getting fewer orders these last 24 months than expected from China, they have gotten more orders than expected from North America--and the North American engines are the larger C-series, with higher margins. The Vancouver purchase, like Los Angeles, for example, are C-series. (Almost all Chinese bus orders are the smaller B-series).

The next conference call (February maybe) should state that both local China and Indian lines are up and operating and have successfully output the initial engines, and are ready for operational orders. If they don't state that at the next conference call, then they will be behind schedule. I think that they will; in fact, the last conference call made it clear that both are supposed to be up and running NLT January.

Beijing is indeed testing several new clean bus technologies now. There are several fuel cell buses running around there, for example; with BLDP fuel cells, no less. There are also a couple of other versions of hybrid buses, et al. Each one of these demo technologies will be kept through the Olympics and used in the tourist/olympic areas after their current demo periods; presumably with Fuel Cell Bus or whatever written on the side. But, in terms of all of the advanced technologies, none of the others, to my knowledge, has Beijing bought greater than dozens. None have bought, say, 270 other bus engines, much less Cummins Westport's 2,700. And all of those already-bought 2700 were the expensive foreign-devil built engines; not the local Dong Feng ones.

So, i'm still holding--though even moi is under water at this point. I'm convinced that Mr.Market absolutely, positively, is waiting for The Big China Order and The Big India Order--which I don't think will come. When (and I am saying 'when' not 'if') the orders start coming in, don't be surprised if they are like the last one, in the hundreds....but since they are just-in-time orders and deliveries, the following 12 months will see many of these mid-sized orders, rather than a single large one.

Then again, I'm the one who thought the stock price wouldn't go under $1.20....................

jp
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