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Price traget on China Energy has been raised to 3.03 singapore dollars a share
5 December 2007
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CIMB-GK Research has raised its price target on China Energy to 3.03 singapore dollars a share after increasing its earnings forecast for China's largest producer of dimethyl ether (DME).
"Coupled with rising DME prices and softer methanol prices, we expect gross margins to improve to 29-39% in 2008-2009, from 17-21% previously," the brokerage said.
Also China Energy said it wants to triple its methanol production capacity by the end of 2008 in a plan estimated to cost $193 million. The firm also intends to spend $250 million to increase its production of dimethyl ether by expanding its existing plants.
CIMB-GK estimates the move would increase China Enrgy's self-reliance for methanol to 86 percent for its Shandong and Zhangjiagang DME plants.
Current share price of China Enrgy on the Stock Exchange of Singapore: 1.31 singapore dollars
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