Eco-friendly engine: an important way to solve haze

The new energy-saving and environmentally friendly engine is the future direction of the world's automotive industry. Domestic traditional engine companies lack the core technology with independent intellectual property rights and have a huge gap with their foreign counterparts. Zhongding Power's joint stock company Zhongding Power has entered into the environmental protection engine industry through cooperation with leading overseas companies.

OPOC Engine: 2011 Best Technology Achievements in Automotive Class 1 Energy Saving and Environmental Protection

Ecomotors Inc., an eco-friendly car engine developer, has an OPOC (opposite-piston, opposed-cylinder) engine that is lightweight, low-power, and low-emission. It has a higher power density and has advantages in terms of fuel economy, exhaust emissions, and manufacturing costs. Small cars using the OPOC engine can achieve fuel consumption as low as 2.4 liters/100 km and emissions up to Euro VI standards. Compared to conventional turbocharged diesel engines, OPOC engine parts are reduced by 50%, weight is reduced by 30%, volume is reduced by 25%, and fuel consumption per 100 kilometers is reduced by 50%. U.S. Motors' best-selling scientific and technological achievements in 2012, TESLAMODELS electric cars, TSLA (Tesla) and its concept stocks are sought after in the US and Chinese capital markets.

EcoMotors: Acquired the strength of Bill Gates, Kosler and other multi-round investment EcoMotors company, has more than 150 patents, developed more than 20 engines and more than 20 vehicles into production. The company continued to receive multiple investments from first-tier venture capital funds such as Bill Gates and Vinod Kosra, and has accumulated a total of US$66 million in venture capital. In May 2011, Zhongding Group and GlobalOptima LLC jointly invested US$18 million to support the development of EcoMotors' OPOC engine.

Industrialization: Zhongding Power has been awarded orders for 100,000 engines from EcoMotors

EcoMotors has signed cooperation agreements with Zhongding Power, Navistar Navistar, and Generac in the industrialization of passenger vehicles, non-road machinery, commercial vehicles, and generators. Zhongding Power has obtained orders for 100,000 EcoMotors engines and is sold directly to its customers by EcoMotors. In the first phase of Zhongding Power's design, it has a production capacity of 150,000 new OPOC engines, and its annual revenue may exceed RMB 6 billion after it reaches production. It is expected that mass production will start in 2014. Zhongding Power also plans to build a second OPOC with similar production capacity in 2014. The engine factory can produce 80-100 horsepower engines suitable for passenger vehicles.

Investment advice: Give the "recommended" rating for the energy-saving and environmental protection engine industry. It is recommended that Zhongding shares be recommended to focus on the progress of Zhongding Power's OPOC engine industrialization.

The main risk factors are: the industrialization progress is lower than expected, and new energy vehicles are replacing risks.