Shares in Windar Photonics PLC (LON:WPHO) soared in early deals on Friday after the wind sensors maker received a new order for 25 of its WindEYE LiDAR units from a newly-appointed regional distributor in China.
Denmark’s export credit agency, Eksport Kredit Fonden, is providing the financing for the order, which is expected to be delivered in the first half of this year.
Once on site, the LiDAR units are expected to be installed and commissioned shortly after.
The order validates the decision taken by Windar last year to shake up its sales strategy and extend its regional distribution network.
The Danish group now has 13 regionally appointed distributors throughout Asia, Europe and the Americas.
“After last year's reorganisation of our sales team and strategy in China, we are clearly seeing momentum building in this very important Chinese market,” said chief executive Jørgen Korsgaard Jensen.
“I expect to see continued momentum not only in China but also through the extensive distribution network established over the last nine months.”
As Jensen said, the Chinese market is an important one for the technology group given that four of the top ten wind turbine manufactures are based there.
To try and crack a potentially-lucrative market, Windar said the newly-appointed distributor is working closely with original equipment manufacturers (OEMs) in the country.
Cantor Fitzgerald analyst Adam Forsyth is a fan of the new sales strategy and thinks today’s order could be the start of things to come.
“Windar’s new order offers helpful traction but it also demonstrates success in the policy of appointing regional distributors,” wrote Forsyth in a note to clients this morning.
“With 13 of these now signed we think the company should be well placed to make further progress.”
LiDAR technology helps optimise wind power generation
Windar’s technology analyses the wind ahead of a turbine so it can be optimised to fit conditions.
In other words, short term variations in wind speed can be measured before they reach the wind turbine which can then be adjusted to deal with these changes.
The principle of LiDAR was developed in the 1970s but Windar has enhanced and fine-tuned it using lasers.
According to the company, the WindEYE units increase annual energy production from each wind turbine by 1-4%, and at the same time it reduces costs associated with maintenance and repair.
Depending on the price of power, the sensor could pay for itself within 12 - 36 months. And overall, in terms of asset value, the sensor systems typically add 4-7% to a turbine’s worth.
Windar uses lasers and there are no moving parts so it is much cheaper than competing products in the market. The product is over 60% cheaper and almost 50% lighter than the best competing products.
Shares were up 14% to 99.9p in early trading on Friday.
--Updates for share price, background info and broker comment--