Formerly known as SML Corporation Ltd, Synertec Corporation Ltd's (ASX: SOP) shares are storming higher today as the company announced an update of its pilot program in China. At the time of writing, the Synertec share price is trading more than 110% higher at 8 cents.
What Synertec does
Synertec is a services company that provides mission critical engineering products and solutions to complex, high-risk and highly regulated industries. To this end, the company targets industries with high barriers to entry such as pharmaceuticals, oil and gas, critical infrastructure and defence.
The company has been listed on the ASX since 2013 and has a market capitalisation of about $20 million. Its services are provided across Australia and overseas through offices in Melbourne, Perth and Sydney.
So what?
Today, Synertec announced it has successfully completed its pilot program, however, international patent applications are still progressing.
Synertec has been working on the project in conjunction with its partner, Sichuan Greentech Environmental Co, a Chinese company. The companies are planning to globally commercialise Greentech's novel, environmentally-friendly and composite dry powder (CDP) technology for the treatment of hydrocarbon drilling mud.
What happened?
The Synertec share price has been sent flying today as Greentech successfully completed its commercial scale program with one of two major Chinese, state-owned enterprises in oil and gas production. The positive results have reaffirmed the earlier modelled outcomes of CDP. Following the announcement, Greentech plans to invoice the customer for $0.9 million.
Promisingly for Greentech, and as a result Synertec, it expects both of these customers to enter into exclusive strategic alliance agreements for the provision of Greentech's CDP technology. This includes the supply of chemicals and processing of drilling mud using its machinery.
Furthermore, as a natural development in the relationship with Greentech, Synertec has appointed its own independent representative on the ground in Chengdu, China. This comes as Synertec announced a loan facility to Greentech as recently as July. These funds have been immediately applied in Greentech's operations.
What now for the Synertec share price?
With the good news, Synertec has wasted no time in applying for international patent protection. To this tune, Synertec had advised it is committed to taking Greentech's technology under its own name. It further reported that this indicates Greentech's faith in the transferability and global scalability of this unique intellectual property.
Synertec Managing Director, Mr. Michael Carroll, was excited as he commented:
The trial results of the CDP pilot programs to date indicate that it is a potentially revolutionary and globally applicable solution to the significant environmental challenges presented by toxic drilling mud.
