Shares of Westport Fuel Systems (NASDAQ:WPRT) exploded out of the gate Friday and are up 27.8% as of 10 a.m. EDT. The natural gas-fueled engine maker announced that its Weichai Westport Inc. joint venture in China has secured certification for its 12-liter "HPDI 2.0" engine from the Ministry of Ecology and Environment of China.
According to Westport, this certification puts Westport in a position "to market and sell the heavy-duty natural gas engines with HPDI technology to various truck original equipment manufacturers" in the Middle Kingdom. Certification was held up initially because of "delays introduced by COVID-19," confided Westport CEO David Johnson, but now that it's in hand, the company can begin supplying "critical HPDI 2.0 components to" Weichei Westport, which will produce WP12HPDI engines equipped with the technology.
This sounds like good news, but it's not immediately apparent how good. Westport didn't say, for example, how much it expects to take in in revenue from HDPI 2.0 sales to support the new engine. Data from S&P Global Market Intelligence, meanwhile, suggest that Westport currently has only minimal assets in China proper, and sales to the Asia/Pacific region, in general, make up less than 8% of Westport's annual business.
Regardless, investors seem pleased and they're buying Westport shares hand over fist on the news.