Can you find a profit in a techno-slag heap?

That’s the promise of an up-and-coming stock I found on Morningstar.com this week. I do some consulting work for a mutual fund firm and this technology company fits the bill – across the board.

First some background. The company’s name is Fuel Tech (FTEK) and it’s hip deep in the energy field - - a curious pick, I know for a technology stock supposedly headed upwards. Fuel Tech has about 1,500 coal-fired plants in the United States, where there is a huge market potential for the company’s Fuel Chem's proprietary slag-reduction technology. Morningstar pegs the domestic market for slag-heap technology at $1 billion.

But it’s not the domestic market where Fuel Tech will leave its heavy footprint. It’s China where the promise of the technology really lies. According to Morningstar, Fuel Tech’s alliance with the Chinese energy company Itochu opens the door for the company‘s chemical technology to help Fuel Tech ramp up sales in China much earlier than the company could have otherwise, possibly five years ahead of the pace Fuel Tech could have achieved on its own. China, after all, is the world’s largest consumer of coal.

More good news for Fuel Tech investors . . . there really aren’t many competitors in the increasingly lucrative China market. My only concern is that Fuel Tech doesn’t have the resources to fully take advantage of the China card. The company recently released third-quarter results that showed it has a ways to go before it’s running on all cylinders. Wall Street analysts say that the company experienced contract delays in its Air Pollution Control (APC) business and that delayed startups in the Fuel Chem business negatively impacted top-line growth in the quarter. But the company did rack up $24.7 million in new business for the quarter, which should tee Fuel Tech up nicely for 2008.

I know it's an energy play and I know we're at peak oil right now. But China is a world of opportunity right now, and Fuel Tech is at the right place at the right time. And timing, as we all know, is everything on Wall Street.