.

Good news :

http://www.investegate.co.uk/Article.aspx?id=200906090700135534T

RNS Number : 5534T
West China Cement Limited
09 June 2009

West China Cement Limited (AIM:WCC)

Contract Wins

Shitian Expressway and Baotou - Xi'an Railway Line

West China Cement Limited ('WCC'), the AIM listed cement production and sales company located in Shaanxi Province, China, is pleased to announce it has won contracts on two projects in the area.


Shitian Expressway

The more significant of the two is winning the majority of contracts up for tender for the Shitian Expressway project. As at 31 May 2009, Shitian Expressway had opened 64 tender sections, 51 of which are in Ankang Section and 13 in Hanzhong Section. WCC won 43 contracts in Ankang and 11 in Hanzhong, resulting in an overall number of 54 contracts obtained so far, an impressive 84% of the total sections up for tender. There are another 25 sections within Hanzhong region that are yet to be opened for tender. This accomplishment can be credited to the experienced WCC team, the reputation of the Company, and the market share and advantageous geographical locations in which WCC operates.


The Shitian Expressway is of great importance as it links Central China and North Western China. It runs from Shiyan in Hubei Province to Tianshui in Gansu Province, passing across 11 counties in southern Shaanxi Province, linking Ankang and Hanzhong. The total mileage is 750 km, of which 480 km is in Shaanxi Province.


Construction of the Expressway commenced in late 2008 and is expected to open to traffic in 2011. The estimated cement consumption for the sections that fell within WCC's sales radius is 3 million tonnes, with 1 million tonnes per section needed specifically for Ankang West Section, Ankang East Section and Hanzong Section respectively.


An investment of RMB 32 billion (2.8 billion) has been allocated for this project and given its scale and breadth, it will be instrumental in facilitating provincial productivity distribution and economic development.


Baotou - Xi'an Railway Line

On 1 June 2009, biddings for three sections of the Baotou - Xi'an Railway Line took place. WCC tendered for the one section running through the Weinan region, where WCC's Pucheng plant is located and consequently was awarded this section. The estimated cement consumption for this section is approximately 600,000 tonnes.


The line will be 935 km long and will connect Baotou in Inner-Mongolia and Xi'an in Shaanxi Province. The sections that were opened for bidding stretch from the Yulin region in Northern Shaanxi to the Weinan region.


Commenting on the projects, WCC's Chief Executive Officer Jimin Zhang said:


'I am delighted with the wins on both projects. The high percentage of Sections on the Shitian Expressway that have been awarded to us is a result of the determination of our successful team at WCC. These are significant projects for the Provinces involved with large scale investment which will enhance productivity distribution and economic development for all the regions involved and beyond.'



For further information, please contact:


Citigate Dewe Rogerson

Pui Shan Lee Tel: + 86 21 6340 4186 / Mob: + 86 138 1712 5781

ps.lee@citigate.com.cn


Susanna Gale Tel: + 852 2533 4607 / Mob: + 852 9457 4356

susanna.gale@citigate.com.hk


Notes to Editors:

West China Cement listed on the AIM market of the London Stock Exchange on 4 December 2006, raising approximately 20.1 million net of expenses.

Prior to the listing, the Company, which is headquartered in Xi'an the provincial capital of Shaanxi Province, had operated three cement production plants in Pucheng with a combined production capacity of 1.5 million tonnes per annum since 2003.

In order to service the growing demand for cement in the region, a new plant running two cement production lines, funded by money raised at the IPO, opened in Lantian in 2007 and has a production capacity of 2 million tonnes.

The company's 1.8 million tonne third plant at Ankang started producing and selling cement in March 2009 and is expected to reach full capacity in the second half of 2009.

Approval for the building of two new cement plants, Yangxian and Mianxian, each with a capacity of 1 million tonnes per annum, was announced in March 2009. With the massive government spend on infrastructure as part of the RMB 4 trillion fiscal stimulus package and the need to rebuild in the wake of the Sichuan earthquake which occurred in this area, the Company has chosen the appropriate location to build these latest projects.

Enjoying a superb long holiday but keep getting alerts about WCC going up leaps and bounds.

Nice to see it moving, but its still cheap as chips below 10 pounds, so no reason to get excited yet just keep on holding and adding.

Enjoy.

Edit.

Given 2010 EPS could be well over 120p and given the ratings for these companies on the Hang Seng, my target is 15 pounds by 2012, all being well.

Present forecasts are for 2009 EPS of over 77p and 2010 EPS of over 103p.

However, these are based on cement prices that are currently 20% below what the actual price is where WCC sell. Its also based on higher energy costs than currently are actually in effect.

Therefore certainly upgrades are possible for 2010. For 2009 I would just like them to get near to the 77p, so around 73p or a bit more.

For 2010 we could see 120p EPS or more.

With the current price of 250p they are on just over a 2010 PER of times two. Far too low given the recent IPO's in Hong Kong.

So certainly ten pounds a share is a more fair valuation, and there is potentially lots more upside to come as people come to realise just how cheap WCC is, and its cheap but has liquidity meaning its possible to buy large and sell large through a decent stockbroker.

Pro S - Its good to see the recent rises, and awakening of the market. One factor, over and beyond the pure economics of this company is a secondary listing, which in itself would mutliply the share price overnight.

WCC are comitted to this over the medium term so yet another sterling reason to buy/add.

As interims are due in September its worth working out what kind of quarterly earnings should be seen in 2009 to estimate the realms of target earnings.

The new plant will be 100% production from late August onwards, therefore Q4 will be the best earnings for the year.

Could be something like Q1=15P, Q2=15P, Q3=20P, Q4=25P giving a full year 2009 of 75p.

Based upon that we should be looking for between 25p to 30p of earnings for the interims in September, and then 75p for the full year.

The new plant starting its run up process is the reason for the increase in earnings in Q3 and then it being 100% on line for Q4 the rise again in Q4.

In the region of 25p to 30p at interims would be fine and in line. Anything more could lead to upgrades for the full year forecast which is presently 77p.

More development of the plants and increasing efficiencies along with cheaper energy costs could lead to 4 quarters of 30p earnings in 2010, which gives the 120p figure I have for 2010 earnings.

On top of that the recently announced two smaller plants come on line, again leading to potential for Q4 2010 being higher, and leading to a 2011 potential earnings in the region of 150p to 170p all of course depending on cement prices and energy prices amongst the other variables.

With a potential forecast in the region of 150p to 170p for 2011 its the point at which I would attempt the secondary listing and exit strategy for the founders, and why I would look to 2011 for that from the BOD as I said earlier. Crystal ball gazing but it does not hurt to be thinking a few steps ahead.

Cement prices in Shaanxi still nice and high.

http://www.cementchina.net/news/shownews.asp?id=5920

(Shaanxi of WCC fame comes under North West Shanxi, not the North China Shanxi in the link)

Brokers using circa 300RMB prices for forecasts for WCC.

Actual as can be seen is 20% higher at over 370RMB.

Nice .

Cement prices in their home province (North West Shanxi (Shaanxi)) are up again being +5 to 378RMB now.

http://www.cementchina.net/news/shownews.asp?id=5953

Provided they keep above 300 then I am happy.

An interesting Friday last week with a sharp shake down and then finishing up on the day, may or may not bode well for some strength this coming week.

Interims next month.

Rising well today.

Appears that SCSW gave WCC a good write up over the weekend and a buy rating. ( http://www.scsw.co.uk/ )

Cannot blame them given the potential for this company going forward. Should be looking at over 150p of earnings for 2011, so you can guess what the stock price might be at that time.

in many ways, it's quite a tempting stock (despite its parentage!), but it is so thinly traded - about 130k per day - that even buying 2500, or trying to sell same in a soggy market could prove problematic ..... the spread also tends to be pretty hefty too

I thought you didn't like any China stocks cynic especially this one ,we had a ding dong about this a couple of years ago,,why the turnaround ,(not having a dig by the way) .

i don't like china stocks, and i allude to that in my post ..... for all that, i contemplated having a few of these, but for the reasons above, have decided against

Trading in size is not a problem, you just need a good broker, not an online one or a bucket shop job.

2500 shares for on line trades is suffucient for plenty of PI's. 5 trades of that size and thats 30K pounds traded.

i have L2 and can deal direct with the market .... my comment remains the same about illiquidity

Done well to keep hold of the rise and consolidate a little.

There simply is no better Chinese stock on the AIM. Keep buying and adding and holding it what I shall do, and let the profits pile up as the stock price continues to rise up to my 15 pounds target price.

This is not some techy stock that might fall over anytime, or some weird software company that pumps out profit warnings and could fall over anytime. This is cement and its in demand and demand will keep on growing. A very safe investment IMO. Put your money in and forget about it for 2 years and then be very delighted at whats happened.

The Yangxian plant (due to be on line Q2 2010) appears to be still on schedule.

Link Click Here

Company News August 7th 2009

Shaanxi Provincial Inspection Group visited Yangxian Plant

Shaanxi Provincial inspection group and a Standing Committee Member of Yangxian County visited Yangxian plant, the fully owned subsidiary of West China Cement Limited (“WCC”), which is under construction. The plant manager Mr. Wang Fayin and relative leaders warmly welcomed the inspection group.

During the visit, Mr. Wang gave a detailed introduction of the project progression, and the performances and achievements that have been recognized in the past months. The group hopes all staff will be overcome the bad weather and other adverse factors to ensure the plant can be successfully fired up on time and contribute to the local economic development.

At the same time, the plant manager Mr. Wang on behalf of all staff gives thanks for the provincial leader’s support and care. He also pointed out that the group will overcome all the difficulties, continue to be hard working and strive to build a high-quality and high-efficiency demonstration plant.

Edging up.

Cheapest Chinese stock on the market imv given who they are, what they do and the forward looking firm potential.

Nearing 300p, would be nice to break through and get the bid price at over 300p.

Nice to see someone as prominent as Giles Hargreave saying he likes West China Cement and the price could double quite quickly. I am expecting it to triple in the mid term, but yes double short term.

Interview from 14th August, comment on WCC about 1m 47s in.

Enjoy.

http://www.citywire.co.uk/adviser/-/video/week-in-investment/content.aspx?ID=353760


.