Friday, December 24, 2010

RH Energy

RH Energy: Won contracts worth US$8.7m to provide design and service for the upgrading of Caprolactum (chemical used in nylon production) plant of 200k ton annual capacity and Epoxy (adhesion and protective material) used in plant of 50k ton annual capacity for SINOPEC companies…

To impact earnings till 2nd half of 2011. Co has had recent US$8.5m contract win in Oct. Adding both contracts at US$17.2m, still falls short of FY09 rev of US$24.8m and 9M10 Sep’s rev of US$28.4m. Note that co has started return to profitability in last 2Qs but will need to win more contracts to prevent earnings decline. Trades at trailing P/E of 10.9x, avg at 12.6x

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