Dongfang Electric 1072

Dongfang Electric 1072

Postby winston » Tue May 27, 2008 7:51 am

From Dr. Check:-

Just before the Sichuan earthquake, power equipment manufacturer Dongfang Electric (1072) traded at HK$30 - about HK$63 below its record high of HK$82.70 last September.

The Sichuan-based company said that equipment at its turbine manufacturing plant was severely damaged by the earthquake.

Sales of turbines accounted for 20 percent of turnover last year.

Still, facilities for making hydraulic generators, utility boilers and combustion engines were not affected.

The Bank of China yesterday said it would set up a 30 billion yuan (HK$33.77 billion) credit line for Dongfang Electric Corp, parent of the Hong Kong-listed company, to help fund reconstruction work.

So the stock rose 4.6 percent to HK$26.05.

The question, then, is whether we should chase this stock.

The answer is no.

The company's first-quarter profit slumped 26.97 percent to 425 million yuan year on year even as revenue rose 2.64 percent to 5.96 billion yuan.

Gross profit margin narrowed 1.4 percentage points to 16.97 percent.

The soaring price of steel was a major headache.

Morgan Stanley cut its 2008 and 2009 earnings forecasts for the power equipment maker and believes more than one year may be needed to rebuild facilities so that it can return to original capacity.

Calyon expects Beijing to rely on Harbin Power (1133) and Shanghai Electric (2727) to rebuild power facilities devastated by the quake while Dongfang Electric recovers.
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Re: Dongfang Electric 1072

Postby winston » Wed Jun 04, 2008 3:35 pm

Dongfang Wins 7 Billion Yuan Orders After China Quake (Update1)
By Eugene Tang

June 4 (Bloomberg) -- Dongfang Electric Corp., which lost 500 workers and factories accounting for 20 percent of revenue in China's May 12 earthquake, said it received as much as 7 billion yuan ($1 billion) of orders for power plants and generators.

New contracts include a coal-fired plant for Huaneng Power International Inc. and generators for Huadian Power International Co., Chief Financial Officer Gong Dan said in an interview at Dongfang's office in Chengdu, about 50 miles from the epicenter. The orders include projects outside of the quake zone, he said.

Dongfang Electric, China's second-largest maker of power- plant turbines and boilers, will need one to two years to return to normal production after the 7.9-magnitude temblor killed about half of the workers at a factory belonging to its Dongfang Steam Turbine Co. unit in Hanwang, Sichuan province. The company will relocate the plant to a site near the company's Deyang headquarters in the same province.

``We have the resources and contracts to overcome the problem,'' Gong said yesterday. ``Our priorities now are to resume output to complete the 40 billion yuan of contracts in hand, resettle our workers and relocate our production.''

Orders worth 4.5 billion yuan were placed with Dongfang for six 660-megawatt coal-fired and wind-powered generators, Huaneng Power said on May 24.

The contract for projects in Shaanxi province, away from the Sichuan quake epicenter, was the first order since the earthquake and would ``give some support to Dongfang's reconstruction after the quake,'' Huaneng spokesman Li Zhaokui said today. Wang Riwen, director of the Huadian president's office, could not be reached to confirm the contract with Dongfang.

Loss Assessment

Last year, Dongfang reported net income of 2.2 billion yuan on sales of 24.1 billion yuan. The company is still assessing the financial loss, which the Guangzhou Daily newspaper on May 26 estimated at 5 billion yuan.

The quake, the most powerful in more than half a century, killed almost 70,000 people and left 15 million homeless.

Dongfang fell 0.4 percent to HK$25.65 as of the 12:30 p.m. trading break in Hong Kong today. The stock has lost 15 percent since the quake, compared with a 3.5 percent gain in the benchmark Hang Seng Index.

The company's yuan-denominated A shares in Shanghai declined as much as 3.4 percent to 32.83 yuan, plunging as much as 26.8 percent since the earthquake.

China's government has urged banks to ease lending terms and accelerate loan approvals to help rebuild the quake-hit area. Companies in Sichuan face economic losses of 67 billion yuan, according to the Ministry of Industry and Information.

Credit Lines

Dongfang Electric, which also makes pumps for nuclear power plants with Areva SA, received almost 60 billion yuan of credit from Industrial & Commercial Bank of China, Bank of China Ltd. and China Construction Bank Corp. The company had 3.9 billion yuan in cash at the end of 2007, Gong said.

``We're still studying our financial requirements to see whether and when we need to draw the loans,'' Gong said. ``We are also working on cutting our internal costs and improving our efficiency to be able to fulfill orders.''

The company is in talks to subcontract some of its turbine orders to factories in China and overseas to meet supply deadlines, Gong said, declining to name its subcontractors.

Dongfang had almost 16,000 workers at the end of 2007, making it the biggest employer in Deyang, a city of 3.8 million people about 90 minutes northeast of Chengdu. Its administrative offices and factory space were completed in 2006.

The complex, the size of a city block, was unscathed in the earthquake. A subsidiary office built in 1958 and the company's archives suffered some damage, including broken windows and cracked walls.
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Re: Dongfang Electric 1072

Postby winston » Wed Jun 18, 2008 6:23 pm

Dongfang Electric Wind Turbines Surprise After Quake (Update1)
By Lee Spears

June 18 (Bloomberg) -- The biggest surprise to emerge from the Chinese earthquake may be Dongfang Electric Corp.

China's second-biggest power-plant builder fell 27 percent to a 16-month low after the 7.9-magnitude quake in Sichuan province on May 12 flattened a Dongfang factory and killed 500 of its workers. Since the disaster, the company has received 10 billion yuan ($1.45 billion) of new contracts for wind turbines and other generation equipment, investor-relations manager Liu Zhi said.

The orders, which are running at twice last year's monthly pace, may help revive the company's shares. Dongfang has underperformed the CSI 300 Index, tracking 300 stocks traded in Shanghai and Shenzhen, by 16 percentage points since the quake. It has lagged behind the Hang Seng China Enterprises Index in Hong Kong, where the company also is listed, by 11 points.

With the Chinese government planning an increase in alternative-energy use, Dongfang's wind-turbine earnings will increase eightfold by 2009, said Michael Zhang, an analyst with BNP Paribas in Hong Kong who rates the stock ``buy.'' The unit accounted for about 2 percent of revenue in 2007, its first year of operation, and posted a profit of 45.5 million yuan, according to the company's annual report. That's about 1 percent of total profit from Dongfang's equipment-manufacturing businesses.

``Dongfang's wind-power business will only start contributing significantly to earnings this year, so it's not fully reflected in the stock valuation,'' said Zhang, who covers Chinese machinery makers. ``Most of the analysts on the street haven't realized how big the wind power business is for Dongfang.''

Demand Surge

Wind-power demand is surging as the government turns to alternative-energy sources to help drive an economy that expanded 10.6 percent last quarter.

Chinese wind-equipment purchases total 30 billion yuan annually, making the country the world's fastest-growing market after the U.S., said Dave Dai, a Hong Kong-based analyst at CLSA Asia-Pacific Markets. Domestically assembled gear costs 20 percent to 30 percent less than machinery from Siemens AG and General Electric Co., said Dai, who doesn't cover Dongfang.

Cheapest

Dongfang trades at 7.8 times estimated 2008 earnings, making it the cheapest of three mainland power-equipment makers listed in Hong Kong. Shanghai Electric Group Co., the country's biggest, is almost twice as expensive, while No. 3 Harbin Power Equipment Co.'s valuation is 28 percent higher than Dongfang's.

Five analysts rate Dongfang ``buy,'' four say hold and two advise selling, according to data compiled by Bloomberg.

Dongfang's Hong Kong-traded shares rose 6.4 percent, the most in almost three weeks and triple the daily gain in the Hang Seng China Enterprises, to close at HK$25 today. The Shanghai- traded shares advanced 5.6 percent, the most in more than three weeks.

Dongfang's damaged factory made steam turbines, the company's most profitable item, and it will take as long as two years to reopen.

Jan Wim Derks, an economist and head of the global emerging- markets team overseeing about $2 billion for ING Investment Management in The Hague, sold his Dongfang shares out of concern the earthquake damage may cause the company to lose business.

``They have to focus on rebuilding their facilities rather than on the market, so they may lose some focus in the near term,'' Derks said. ``For now, I prefer to be on the sidelines.''

Wind Power

China, the world's biggest energy consumer after the U.S., forecasts wind-power capacity will reach 20 gigawatts by 2010, double the previous government target, according Wu Guihui, deputy head of energy at the National Development and Reform Commission. The amount is equivalent to about 3 percent of the country's total power-generating capacity in 2007.

``Wind farms are ordering a lot of equipment, which is keeping the manufacturers busy,'' said Maggie Lee, lead manager for Invesco Hong Kong Ltd.'s $4.6 billion Asia Infrastructure Fund. Her firm owns 11 percent of Dongfang's shares, Bloomberg data show.

Adding wind-energy capacity is cheaper than other alternative forms such as hydroelectric, solar or nuclear, Lee said. The country plans to spend 1.5 trillion yuan on renewable power over 15 years to reduce dependence on fossil fuels and cut pollution.

China will rebate taxes paid by domestic companies on imports of parts and materials used to make larger wind-power equipment, according to a statement on the Customs General Administration Web site.

Dongfang's share of China's wind-power market, currently at about 5 percent, will triple by as early as 2009 as it catches up with market leader Xinjiang Goldwind Science & Technology Co., BNP's Zhang said.

Prices that undercut overseas rivals will help Chinese producers hold onto the market, Dai of CLSA said. Denmark's Vestas Wind Systems A/S, the world's largest wind-turbine maker, saw its global market share fall to 23 percent last year from 28 percent in 2006.
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Re: Dongfang Electric 1072

Postby winston » Wed Jul 16, 2008 2:19 pm

Not vested.

Quake-hit Dongfang sees huge losses


Dongfang Electric (1072) said it expected to report losses of no more than 1.6 billion yuan (HK$1.83 billion) this year due to China's devastating May earthquake.

The estimate equals to nearly 74 percent of the company's net profit in 2007.

One of its major plants producing power generating equipment at Hanwang, in Sichuan province where the May 12 earthquake took place, was in particular damaged, the company said.

More than 500 Dongfang staff were killed by the quake, the company had reported in June.

Dongfang said it expected to complete its full evaluation work of assets and losses at the end of this year and relevant losses would be reported in the company's 2008 results.

REUTERS
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Re: Dongfang Electric 1072

Postby winston » Fri Aug 22, 2008 9:14 am

Not vested.

APPLE DAILY

-- Hong Kong-listed Dongfang Electric (1072.HK: Quote, Profile, Research, Stock Buzz) saw a 63 percent decline in net profit to 452 million yuan for the first six months. The company said the Sichuan earthquake is a factor in the decrease but the fixed asset losses will not exceed 1.6 billion yuan
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Re: Dongfang Electric 1072

Postby winston » Mon Feb 16, 2009 3:12 pm

DJ MARKET TALK:BNPP Starts Dongfang Electric At Hold;Target HK$18

1201 [Dow Jones] STOCK CALL: BNP Paribas starts Dongfang Electric (1072.HK) at Hold with target price at HK$18.00. Says this year "will be a fresh start" for company after it writes off all of its CNY1.57 billion earthquake-related losses in 2008 results.

Says it believes company is in best shape among rivals in the clean-energy segment. "The new-energy investment theme and government support to Dongfang will help alleviate investors' concern on the downside risks of the thermal segment, but we still don't see evidence of a strong Buy."

Notes company is fully exposed to the power-equipment business, which is very much affected by the big 5 IPPs' incentive to expand. Stock down 4.0% at HK$17.12.
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Re: Dongfang Electric 1072

Postby greenhoney » Tue Feb 17, 2009 11:29 am

this is one counter i have interest in. these guys may have lost a lot in the quake, but they are shaping up to be one of the companies investing in a lot of green energy esp wind energy sector. i am not surprised if China overtakes the US as the world largest wind energy player in the world in the next 5 years.

another chinese company, A Power Generation (APWR) recently teamed up with GE to make gearboxes for wind turbines is also shaping up to be a big player in the wind energy industry.
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Re: Dongfang Electric 1072

Postby winston » Mon Aug 10, 2009 8:14 am

Not vested. From Dr. Check, The Standard HK:-

You may consider Dongfang Electric (1072). It makes and sells thermal power and hydropower equipment and AC/DC motors for coal-fired, gas-fired and nuclear power plants and wind generators.

The firm's operating revenue in 2008 rose 12.3 percent from a year earlier to 27.9 billion yuan (HK$31.65 billion). As of the end of 2008, Dongfang's orders in hand amounted to 120 billion yuan.

Calyon is bullish on the stock as use of wind and nuclear power is widely expected to rise in the mainland. It set a target of HK$48.

Morgan Stanley expects Dongfang to record compound annual earnings growth of 48 percent through to 2011.

The stock price was only 90 HK cents in 2003. It surged to HK$82.70 in 2007 before plunging to HK$9.97 last October. It closed on Friday at HK$35.85 - a reasonable level.
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Re: Dongfang Electric 1072

Postby winston » Mon Mar 08, 2010 8:00 am

Not vested. From Dr. Check, The Standard HK:-

Let's look at Dongfang Electric (1072), which makes and sells thermal and hydropower equipment.

The company also makes motors used in large-scale coal, gas and nuclear power plants and wind power generation sets. Not only that, it is well known for the reactor pressure vessels and steam generators it produces in large numbers.

The company had record sales in 2008.

It is currently trading at HK$42.50, or 18 times its expected price-earnings ratio for this year.

Dongfang Electric's share price is still far below its record high of HK$82.70 set in 2007.

It closed on Friday at HK$42.50, not too far from JPMorgan's target price of HK$45.90.
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Re: Dongfang Electric 1072

Postby winston » Thu Apr 08, 2010 8:32 am

Not vested. From Dr. Check, The Standard HK:-

Electricity equipment maker Dongfang Electric (1072) is another high-growth share to watch. It hit a high of HK$82.70 in September 2007.

But the firm was dealt a big blow in 2008 after the Sichuan earthquake damaged some of its plants. But since then, earnings have recovered and 2009 net profit is expected to have risen 779 percent year-on-year to 1.54 billion yuan (HK$1.75 billion).

CLSA tips Dongfang to win 52 billion yuan worth of new orders this year.

The stock closed 12.1 percent higher at HK$48.90. Below HK$47, it is worth more than just a cursory glance.
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