PX-Shandong Sign Oxy-Fuel Contract - Analyst Blog
July 13 2011 - 7:30AM
Zacks
Praxair (China) Investment Co. Ltd,
the Chinese unit of Praxair Inc. (PX) recently
signed a contract with a leading steel and iron enterprise in
Shandong province, North China, the Shandong Guangfu Group Co. The
contract will strengthen the company’s foothold in North China.
As per the terms of the combustion
equipment contract, Praxair will provide its proprietary oxy-fuel
technology to Shandong Guangfu Group. One set of Praxair’s gas
injection system will be installed at the 100-ton electric arc
furnace of the steel mill of Shandong Guangfu Group. The injection
system includes three oxygen gas injectors and other related
equipment.
Praxair’s oxy-fuel technology is
primarily used in steel and non-ferrous metal industries and is
widely used in North China, including the provinces of Shanghai,
Jiangsu, Zhejiang, Guangdong and Hubei. The technology enhances
operation safety, cost saving, productivity and environmental
protection.
We believe Praxair’s constant
efforts in expanding its activities within its areas of operation
and new regions by adding new customers will accelerate profit
growth in the future. High project backlog of $2.5 billion at the
end of the first quarter 2011 will also add abundantly to its
business expansion plan.
For the long run, the company has
set a goal to achieve annual organic sales growth of 8%-12%, while
it is anticipated that emerging markets, including South America,
Asia, and Mexico, would account for approximately 45% of total
sales by 2015 compared with 36% in the fiscal year 2010.
The company is slated to release
its second quarter financial results on July 27, 2011. Currently,
the Zacks Consensus Estimate for the quarter is $1.37, representing
a year- over-year increase of 15.44%. Estimate for the fiscal year
2011 and 2012 is $5.47 and $6.27, respectively.
Praxair faces stiff competition
from Air Products and Chemicals Inc.(APD) and
Airgas Inc. (ARG). We currently maintain a Neutral
recommendation on Praxair.
AIR PRODS & CHE (APD): Free Stock Analysis Report
AIRGAS INC (ARG): Free Stock Analysis Report
PRAXAIR INC (PX): Free Stock Analysis Report
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