Epic : WCC

Last Results : http://www.investegate.co.uk/Article.aspx?id=200703270701277583T


The Company, which is headquartered in Xi'an the provincial capital of Shaanxi Province, operates three cement production plants in Pucheng, the first of which has been operational since 1977 and now have a combined production capacity of 1.5 million tonnes per annum. Two new lines are coming on line soon which will boost output by an additional 2 million tones. Some of this additional output will be seen in 2007 financial year, the rest in 2008 financial year.

The PRC Government is actively promoting the restructuring of the Chinese cement industry with a shift away from small-scale producers towards large, modern environmentally friendly production plants. This will benefit WCC are the smaller and more polluting plants are shut down and production at larger more efficient plans is ramped up, eg WCC.


Activities

The Group manufactures three types of cement, as well as clinker, a cement compound:

* Ordinary Portland Cement is a mixture of clinker, mineral admixtures (accounting for 6 to 15 per cent.) and gypsum, which is widely used in industrial and civil construction projects

* Flyash Portland Cement is a mixture of clinker, flyash and gypsum. The content of flyash by weight ranges from 20 per cent. to 40 per cent.depending on its intended use

* Composite Portland Cement is a mixture of clinker, at least two kinds of prescribed mineral admixtures and gypsum, which is widely used in industrial and civil construction projects

* Clinker is the base of the above mentioned products, the principal raw material of which is limestone. The Group does not intend to sell clinker as a separate product in the future

whoops! ..... did i forget to voice great caution when dealing with the chinese? ..... very remiss of me!

The Chinese are very cunning nowadays since they have been bitten once, twice shy from the past.

the chinese have been bitten? ..... more likely the dumb gweilos

What I meant was dated back to historical opium war when the Chinese were duped literally into letting the gweilos into China and siphoning their wealth and culture, cynic.

113.5p now...how come the China Olympics is not boosting this company???

perhaps because the chinese are crooked by occidental standards and the markets are just waking up to that fact

122p today...maybe this is the turning point for another huge spike towards 200p

big spike to puncture balloon!

Hahahaha...so funny, cynic...you got a great sense of humour

and i make fun of myself too

Despite the recent profits, WCC has not even budge...looks like the Chinese are keeping the money to themselves...SELL.

about time someone started to agree with me!

Shareholders don't get any benefit from below, it is a tragedy, cynic.


West China Cement Limited
31 March 2008

Full Year 2007 Preliminary Results

Strongest results to date lay foundations for significant future growth

31 March 2008: West China Cement (WCC), the producer and distributor of cement based in the western Chinese province of Shaanxi, whose shares are quoted on the London Stock Exchange's AIM market, today announced its preliminary results for the year ended 31 December 2007.

Key financial highlights

Revenues increased to Rmb 526 million (37.6 million) from Rmb 307
million (21.9 million) - up 71 per cent

Record post-tax profit of Rmb 150 million (10.7 million), a 69 per
cent increase over 2006

matter of opinion ..... my view of chinese-run companies is no secret

96p now despite above results...SELL WCC!

.

This one is on a current year PER of just over times 2, and a forward PER of under times 2. Makes it very cheap.

I had a change of stance on this one and have been buying in since 120p levels, and see the potential here to do a "SOLA" given over 1 pounds of earnings forecasts for next year.


Broker forecasts :


Evolution Watter... 31-03-09 BUY

2009 PTP 56.62m
2009 EPS 78.63p

2010 PTP 75.94m
2010 EPS 104.57p

West China Cement has a simple, strong product, using very modern facilities, and is ideally placed as the second largest cement producers in the central China region of Shaanxi. It has ambitious but quite achievable targets for growth, an excellent growth track record and is currently stunningly good value.

WCC has raised significant capital to fund the development at Ankang, which has recently come on stream, soon to raise production capacity by 50% (1.8 million tonnes) to about 5.3m tonnes. The full benefit will be seen in H2 2009. The debt incurred for completing this development is expensive (due to the dreadful credit markets), but could still be comfortably repayed over the next 2 years, given the strong demand for their products and cash flow, if WCC were not aiming for further growth in production of 2m tonnes by Q3 2010.

Two new 1m tonne p.a. plants near the city of Hanzhong are targeted to come on stream in mid 2010. Debt for this new development should be charged at a modest 5%. The longer term target is to increase capacity yet further to some 10m tonnes p.a. by 2011.

Strong product: WCC has won awards for the quality of their building materials (e.g. in 2007 an award for Outstanding National Laboratory in the Building Materials Industry; more recently in January 2009 they were "Provincial Model Enterprise for Environmental Protection"). WCC was the first in Shaanxi to get ISO14001 (Environmental Management system) accreditation. They also use waste heat for power generation. This is important, as small and less green and efficient producers have been shut down. The Lantian waste heat project was completed in August with expected cost savings of RMB 14 million p.a.. WCC naturally got official praise for this too.

Ideally Placed: While the current downturn has hit export-based areas of China such as Guangdong, WCC is well removed from this, being located in Shaanxi, one of the key provinces targetted by the government for infrastructure development, with a host of roads and railways being planned and built to both improve the local transport links and also use Shaanxi as a corridor connecting other parts of China. The government's huge stimulus package specifically targets this kind of development, and in this area. WCC's recent expansion with Ankang, and the two new 1m tonne developments at Yangxian and Mianxian (near Hanzhong), are in the South West of Shaanxi, where there is little competition and robust demand, so margins should be good. WCC have won a number of contracts in the last year, and have obviously excellent prospects for more, which will result in a healthy order book. Currently, there is additional demand from the earthquake-shattered areas of neighbouring Sichuan, and WCC are providing cement for reconstruction work.

The board is well connected, with the CEO Jimin Zhang being a Shaanxi Congress Delegate, advising on links between government and Enterprise.

New Thread : http://www.moneyam.com/InvestorsRoom/posts.php?tid=14049#lastread



.