.

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


.

http://business.scotsman.com/personal-finance/If-the-small-cap-fits.5556824.jp

'.......Hargreave is partial to "quirky" companies, a good recent example being West China Cement, listed on the alternative investment market (AIM) but insulated from the UK economy. "Chinese companies quoted on AIM sell on amazingly low ratings even though they are growing," Hargreave noted. "If West China Cement gets listed in HK or even here there will be a dramatic rise in its share price........"'

MM's really had to spike the price today to loosen up some stock to fill buyers demands.

All very good for the future to get some churn and getting weaker holders out.

EVO are forecasting 1.89m tonnes sold for half one of 2009 at a price of 300RMB average for the period.

That is sales of 568m RMB with gross margin at around 40.8% giving a PBT of 195.4m and a net profit of say 181 million RMB.

That should fall in with my desires of 25p earnings for the half year, or say 2.75 RMB of earnings.

There is potential for a little upside if the average price is a little higher than 300RMB but given the close relationship between EVO and their client I would suggest their figures should be close.

For those looking ahead WCC should be producing and selling 10m tonnes by end 2010 (this is the stated goal and also everything is in place). For for 2011 you would get 10m tonnes sold at say 400RMB average price (cement is on the up in Western China and over 400 already in some places) which would be sales of 4 billion RMB . So in a very simple illustration of taking 7 times (4 billion divided by the 1st half 568m) the forecast earnings for 1st half 09 at 568m sales you get 7 x 2.75rmb = 19.25 rmb or prospective 1.72 of EPS for full year 2011 results.

Again the 1.72 of earnings is in the range I was talking about earlier for 2011 full year.

Happily holding and adding and waiting patiently for 10m tonnes sold in 2011 with further plans announced by that stage and in process to increase capacity even more.

Bit of expected profit after some good rises, allows other to now buy in and add more.

Cheapest and best quality Chinese stock on AIM, and well worth buying lots more IMO.