Changjiang Fertilizer

Changjiang Fertilizer: signed MOU to acquire a pdtn facility in Hunan province from Handan Chemical, for RMB 75m. Plant will have a target capacity of 50k tpa of anhydrous ammonia, and boost Group’s overall pdtn capacity by a third. This follows an earlier acquisition of a 40k tpa anhydrous ammonia factory also in Hunan.

CJ Fert hopes to increase its presence in Hunan, and tap onto Handan’s existing clients in the region to raise market share in the nitrogenous fertilizer industry, as part of its M&A growth strategy. Acquisition to be financed by mix of internal funds and debt (if necessary). CJ Fert trades at 4.6x PE, vs larger peer China XLX at 16.4x PE.