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Rising PRC energy consumption propels China Energy on US$443 million expansion plans.
Singapore, 3 December 2007 - China Energy Limited , China?s largest producer of Dimethyl Ether (?DME?) ? an
environmentally-friendly and cost efficient alternative fuel, has announced its target to triple its Methanol production capacity by the end of 2008. This will effectively increase the Group?s Methanol production capacity from the existing 250,000 metric tons per annum (?mtpa?) to 750,000 mtpa.
Look like it time to pick up this baby again. !
http://www.jfe-holdings.co.jp/en/dme/02-seizo.html
Check out this link it tells you how DME is derived using Methanol
DME Production using Methanol Dehydratio
Methanol dehydration heats and evaporates liquid
methanol so that it is converted to DME in a dehydration reactor. The
energy consumed in DME refining is very high at about 20% of the
calorific value of the DME product.
Larger methanol synthesis plants run at about 3,000 tons/day, but
plants to produce DME from methanol dehydration are still very small,
only measured in 40-50 tons/day. They would have to be hundred-fold
larger before they would be ready to produce DME that could be used as
fuel.
Today, it gone up for another 7 cents...... let the price state the fact....
Citigroup has lowered its target price for China Energy to $1.96 from $2.30 but maintained its "buy" rating on the stock, citing expectations of improved margins in the first quarter of 2008.
do your homework plz. C. energy is not really energy play. in fact higher crude oil px will affect its profit. this is what i read from other forums.
High tide all ships will float. Monday will be the day. DOW +188. This counter will add another 5 cents.
I agree it should be for long term investment. Energy counter will be on spot light. There should be ample growing space since the target price is range from $1.50 to $1.70.
monday should gap up. no much point to enter le for short term i think. lots of resistance just abv 1.2.
Bouncing back 15 cents quietly for the past 3 days. Something is boiling here........
Moving up now
Maybe time for it to move up. Oil going down.
China Energy
Nov 6 close: $1.30
CIMB RESEARCH, Nov 6
WITHIN expectations. Q307 net profit of 64.7 million yuan (S$12.6
million), +26 per cent year-on-year, was in line with consensus and our
estimates as lower-than-expected revenue was compensated by
better-than-expected Ebitda margins (3 percentage points above).
9M07 net profit represents 65 per cent of consensus and 58 per cent of
our previous full-year forecasts. We were expecting a very strong Q407
led by capacity expansion.
Sales jumped 37 per cent year-on-year
in Q307, driven by a 120 per cent year-on-year increase in DME output
(100,000-tonne Phase II expansion at Shandong plant completed in August
2006) and higher ASPs on the back of rising LPG prices.
Completed in September 2007, CEGY's Phase III expansion in Shandong was
running at about 40 per cent utilisation, while the new Guangzhou plant
added little output at 12 per cent utilisation.
Ebitda margins
remained stable year-on-year, as higher gross margins (+1.4 percentage
points year-on-year) were offset by higher administrative expenses
post-IPO. Because of higher depreciation costs and a 15 per cent tax
rate in Shandong (versus tax exemption in FY06), net profit rose 26 per
cent year-on-year, less than the topline growth.
Short-term margin crunch on higher methanol prices, due to supply disruptions and outages in global methanol plants.
While DME prices had risen in tandem with crude oil price increases,
near-term margins are now expected to contract by 5-15 percentage
points. Methanol prices are expected to soften in Q108, due to slowing
demand during the festive season (fewer working days), the resumption
of operations at methanol plants by end-2007, and surplus supply from a
new plant in Oman. CEGY may try to secure its own methanol supply if
prices fail to decline by mid-FY08.
Q4 focus on ramping up: The
Shandong Phase III plant is on track to reach 70 per cent utilisation
by end-FY07, to account for about 90 per cent of total sales in Q407.
As for the Guangzhou plant, management aims for breakeven by end-FY07
(four million yuan loss in Q307) and more significant contributions
from Q108.
Forecasts reduced; maintain 'outperform': We have
reduced our FY07-09 EPS forecasts by 4-39 per cent to factor in lower
utilisation rate assumptions for Q407, higher methanol costs for
FY07-09, and a longer ramp-up period of six months, versus three months
previously.
Accordingly, our target price falls from $1.94 to
$1.73, still based on a 30 per cent discount to our DCF valuation (WACC
13 per cent, LTG 2 per cent) of $2.48. At $1.73, CEGY is valued at 10x
CY09 earnings, which we believe is undemanding against a three-year EPS
CAGR of 55 per cent for FY07-09. Maintain 'outperform' for its
still-solid growth fundamentals.
OUTPERFORM
Hi AT01167 , could you send me the link for the CNA News ? I have been reading lots of good news abt China Energy, but this stock just keep dropping. ... Donno if i should sell to cut loss or hold.
Just watch CNA. The expert has good words on this counter. and targeted for 2.20
Just vested for long term :)
Hope to see it in more energy to cheong soon
"China Energy is up on results, the market is not really focusing on the downgrades because the share price has been bashed down recently," said a local dealer.
"Despite the adverse conditions at present, we believe methanol prices will retreat in first-quarter of 2008 and China Energy's growth potential remains intact," said Lehman analyst Yong Liang Por.
China Energy posted a 26% gain in Q3 net profit to 64.7 million yuan over the same period last year. Revenue increase 37% to 231 million yuan.
Lehman Brothers has lowered the price target for shares of China Energy to $1.72 from S$1.89 and kept its "overweight" rating on the stock citing weaker than expected Q3 results due to higher global methanol prices.
Deutsche Bank has cut the price target for shares of China Energy to $1.56 from $1.70 and kept its "hold" rating on the stock citing high methanol prices as affecting earnings.
people shrug off the analyst reports according to reuters after the results.
Administrative Expense UNUSUALLY high though.
