China XLX Fertiliser: intends to invest ~RMB3bn to construct a new 4th production plant to expand production capacity for urea to over 2m tons per yr. Facility expected to yield additional cost savings, reinforce company's position as one of country's largest fertiliser producers when completed in 2013…
The 4th plant will be located at Xinxiang City, Henan Province, alongside its 3 other existing pdtn plants, but will use sand coal as raw material instead of anthracite coal currently being used. Sand coal is apparently cheaper and more energy efficient compared to anthracite coal. Stock trades at 13x consensus fwd PE. Street rates at Buy, with targets ranging $0.66-0.73.
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