Perfectenergy International Ltd (fka PFGY)

[northenlightsk05]

Here is what I got from the company. Just finish talking to the CEO.

PFGY made a prepayment of $3.8 million USD to a silicon supplier in Germany to buy the silicon starting material. PFGY canceled the purchase and asked the supplier to return their money. The supplier failed to return their money so far. PFGY continues to ask and force the supplier to return the money. But from the accounting point of view, they would need to write it off for now. But it is still possible that they can get this money back. If so, it will be treated as one time gain in the future quarters. They wrote 50% off in Q3. If they cannot get any penny back, there will be another $1.9 million needs to be writen off. Currently, they purchase all the starting material in China.

From operation point of view, PFGY is doing great. They are currently generating $4 - $5 million USD revenue per month at 15-20% gross margin. Demand and contracts on hand far exceed what they can deliver. They have contacts on hand that they can generate $10 million USD revenue per month. But they are running short of prodcution capacity and working capital. So they can only generate $4 - $5 million revenue per month right now. They start to deliver product for the German contract. They expect to generate $10 million revenue from this German contract this year. They will meet the rest of German contract next year. They also have other contracts from other customers. When I called the CEO, he was just finishing a conference call with their potential partners. They plan to subcontract parts of their contracts to their partners to deliver the products to their customers.

Next year, he is very confident to deliver as least $80 million USD revenue and $6 million net earning. If they can have extra capacity and working capital, they can do much more. With contracts on hand, they can do $120 millionn revenue annually if they have the sufficient capcity and working capital right now.