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This is one of the many china stocks that is worth 'investing'.
After the capacity expansion, China energy looks set to have great potential. The revenue in 3Q should double or triple if they managed to utilise the 100% cap. Meanwhile, china has released guideline, allowing DME to be used as home cooking fuel like LPG, in year 2008.
Most probably most people are still not aware or unable to see the potential gain for coming 3Q. However, the recent increase in volume tells us that, suspected lots of big buyers or funds starting to accumulate or loaded at this current 1.5 price. .
Crude oil price remains high and DME looks cheaper compared to LPG gas. Methanol cost has dropped quite a lot on the international market, but quickly recovering. As we know that chinese are highly competitive and lots of smaller players has began planning production of 1 million or lesser facilities all over china, many located at inner mongolia. Price and profit margin will get squeezed very soon after next 2 years. Fortunately, DME production facility demanded lots of funding. I foreseen many will failed too.With the largest DME production running active now in china, China energy is going have an advantage over the rest of the player. The profit generated will keep it alive for longer term, while the rest of the players will have to try to raise funds to keep them alive.
This counter has been floating at $1.5 for quite sometimes...... Waiting for the East wind to blow?
China Energy completes acquisition
New facilities will quadruple production capacity
http://www.businesstimes.com.sg/sub/companies/story/0,4574,246467,00.html?
End of Year Finiancial report confirm up already.
Plus the 2 new plants coming into operation, i think next 1 year very good.
Moreover, clean alternative energy consumption shld go up and not be affected by US consumer index.
cheers.
Well, chinaenergy finally have delivered what they promised.
China Energy Limited (?China Energy? or ?The Group? or
), China?s largest producer of Dimethyl Ether (?DME?) ? an
environmentally-friendly and cost efficient alternative fuel, has announced the acquisition of
450,000 mtpa of DME capacity for RMB397.8 million. The acquisition of these new facilities
effectively raises the Group?s DME capacity by four-fold, from 150,000 mtpa to 600,000
mtpa
Taken from methanex :
Methanol price : Aug 07 USD$285 ( dropped from $520 in Jan )
When the 2 factory comissioned, it will benefit from the dropping methanol price.
CE has to prove that they have the execution power and the ability to deliver project on time.
Once they confirmed GZ and shandong started prod, most likely the price will appreciate.
CE has posted their 2Q result late in the evening, the numbers are not impressing , due to delay in the getting the permits for GZ and shandong facilities to start production.
Nonetheless, given the sales volume and respecting revenue for 1Q07 and 2Q07, i plugged that into 2 linear equations and get the pricing contribution of methanol and DME to the overall sales. ( assuming the selling price of both changes little )
1Q07 : methanol 45800 tonnes, DME 21800 tonnes, 1Q sales 192091('000)
2Q07 : methanol 17900 tonnes, DME 44200 tonnes, 2Q sales 199465('000)
Solving the linear equation will tell u
- methanol per tonne = $2537
- DME per tonne = $3480
Current DME production is about 160000 mta, that means about 40000 tonnes per quarter. With GZ and shandong facilities, the capacity will expand to 600000 mta, which means 150000 tonnes per quarter. Assuming methanol stay at 17900 tonnes per quarter, we have
Estimated Quarter sales ( with expanded DME prod)
- 179000*(2537) + 150000*(3480) ==> 567412('000) rmb
Question is :
- When are they getting the 2 factories to start churning out DME ?
kilroy.. no need to apology lah..but i really thank you for the explanation. am still new n dumb. i ve wanted to enter this counter but always miss the good times, so i thought since its now below your 1.68 conso price, this is my day.. but, i ll do my homework again first before deciding. thanks.
amateur99,
Apologies. I know I didnt highlight that if the range breaks 1.68 below, the setup is NULL since the ATR indicator is now rank at 0.79% (the lower this value the less volatility) which is high after the recent break to the downside.
With the recent major downside break, its still too early to defined a support even I would like to quickly point one out for you. My bias is on the downside after it fails breaking the 1.89 topside on 25th JUL.
is today good time to buy?
Kilroy, can you tell me how you derived 1.68 consolidation price? is it still applicable today? thanks.
yesh.
Slowly creeping back.
Waiting for 1.68 consolidation price again. :) Still have some room to extend lower.
Ranging bet 1.68 - 1.82 after 4th Jun high.
Agreed..China Energy has further expanded their production capacity by acquiring Jiutai Energy...Development On The New DME Production Capacity Of 1.0 Million MTPA Each In Ningbo And Tianjin
Current Price is 1.77...CMIB has tp of 2.12...
First Quarter earnings higher due to incerase in sales of both methanol and dimenthyl ehter....
Cheers!
This will come into limelight again once the oil price moving upwards
It fell after a Credit Suisse report cautioned that the firm's margins could be squeezed by higher raw material costs, said dealers.
The report said methanol, a raw material that China Energy uses to produce DME, could become more expensive, after Chinese media said the China may halt new methanol projects approvals.
"Should there be a significant halt to new methanol projects approvals, we may see a constraint in methanol supply," said Credit Suisse in a recent client note, adding that this would result in margin pressures with the rise in methanol prices.
The report noted that the acquisition of Jiutai Inner Mongolia to produce methanol in-house might be affected, since the approval process could become more difficult.
take profit on Chinanergy and Yangtse..switch to firstlink...chances that CEnergy and yangtse has already moved much....leverage your share proceeds on firstlink..another banjoo.So what it is speculative as along as U make $$$$$
Some potential investmens that will yield substantail benefit for this co and pull it out of the red..its previous director Ngu Tieng Ung had been dealt for fraudalent trading but that was past history....strategic investments in salt lake in China going to bear fruits....announcements will be made soon...at least 20 cents or >.....buy b4 regret just like Banjoo at 12 cents have been shouting till throat dry but luckily most of the pple in this forum made $$$$$ :P :P :P
Any coverage for TP again? Wow Yangzijiang got coverage today and have a gd run...
Hope to see a new coverage for CE's TP to be $3....
Seem to be picking up after dropping to day low of 1.78...Anyone care to comment worth to go in at 1.83 when mkt resume? Seem to move in line with Yangzijiang ususally but today seem the other round...perhaps catching up with Yangzijiang soon since they are both covered at tp of 2.20-2.30...
Thanks.