Yes, there will be dilution. In the past, the company killed the stock by selling shares significantly below market value. Fortunately, they didn't do that with their latest deal with Abax Lotus Ltd. But it definitely is a concern.
A bit off topic but still addressing the growth potential, I am currently reading a book written by James Kynge, the former China bureau chief of the Financial Times in Beijing. In one chapter he discusses how China is building an interstate system patterned after the US. The roads are numbered as in the US and even have signs with white letters and green backgrounds. "Although 18,500 miles have thus far been completed, Beijing plans by 2030 to have laid 53000 miles, about ten thousand miles more than the existing US system."
As we have learned in the US, if you build those roads more cars and trucks will come. Natural gas will be part of their solution to fueling their transportation needs. Below is an excerpt from an article in NGV Global:
Rosita Liang, Cornerstone’s Managing Director states that the Chinese government has already been promoting NGVs as the optimal public transportation choice in many cities. Most large cities, especially those along gas distribution routes, currently use natural gas powered public buses and taxis. She estimates that within 5 years all such public vehicles in large and medium sized cities will be NGVs.
The Chinese NGV market as a whole is expected to increase dramatically in the coming years, with a targeted goal of NGVs making up 20% of the total vehicle population in China by 2020 (currently 50,000 NGVs). There are also approximately 200 commercial filling stations currently in operation increasing at a rate of 9% per year. |
