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Strategies & Market Trends : Greater China Stocks

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From: Julius Wong	10/28/2010 7:45:07 AM
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** OT ** Shanghai Electric Rises to 2 1/2 Year High on $8.3 Billion Order By John Duce Oct. 28 (Bloomberg) -- Shanghai Electric Group Co. rose to the highest in more than 2 1/2 years in Hong Kong trading after the Chinese power-equipment maker said it will sign an $8.3 billion contract to supply generators to Indian billionaire Anil Ambani’s group. Shares rose as much as 7.4 percent to HK$5.06, the highest since March 12, 2008, and were traded at HK$5 at 10:50 a.m. local time. The stock has surged about 40 percent this year compared with the 6 percent advance in the Hang Seng Index. The contract to be signed with Reliance Anil Dhirubhai Ambani Group today is for 36 coal-fired generators and spare parts, Shanghai Electric said in a statement to the Hong Kong stock exchange yesterday. The equipment will be supplied over a decade and will bring as much as $600 million in sales each year, according to the statement. “This a huge boost for the company,” said Dave Dai, an analyst at Daiwa Securities Capital Markets in Hong Kong. “This is a long-term contract which will give steady income over the next ten years.” About 84 percent of Shanghai Electric’s revenue came from China last year and just over 16 percent from overseas. The company reported yesterday a 33 percent increase in third- quarter profit from a year earlier. “Shanghai Electric wants to look abroad as the market for coal-fired generators in China will fall in the coming years as the government tackles pollution,” Dai said. The deal with the Reliance group will help improve Shanghai Electric’s market share in the Indian power-equipment market, according to yesterday’s statement. noir.bloomberg.com

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