Industrial gas producer and supplier, Praxair Inc’s (PX) subsidiary, Praxair China announced the commercial opening of its new air separation plant in Wuwei, Anhui province.
Located 100 kilometers from Nanjing, this plant will be supplying a range of industrial gases including oxygen, nitrogen, and clean air to the Anhui Wuwei coal based chemicals project of Anhui HuaYi Chemical Co., Ltd, an affiliate of China’s prominent chemical groups, Shanghai HuaYi (Group) Company. Daily air separation capacity of the plant is roughly 3,000 tons.
Apart from gases, the plant will also be producing liquid oxygen, nitrogen which will add to Praxair china’s existing capacity. The Chinese unit of Praxair of late, has been active in increasing its foothold in the region.
In June 2012, Praxair China signed a long-term gas supply contract with China-based Yankuang Guohong Chemical Co., Ltd. and Yankuang Group, one of the largest coal exporters and producers in China.
Moreover, series of contracts won by Praxair throughout the world shows very clearly the growing preferences among customers for the company’s world class technology, high quality products and gas supply services.
The current Zacks Consensus Estimate for the second quarter of 2012 is $1.43, representing a year-over-year increase of 3.44%. Estimates for the fiscal years 2012 and 2013 are $5.80 and $6.61, reflecting annual growth of 6.87% and 13.91%, respectively.
Praxair is slated to release its second quarter 2012 financial results on July 25, while its prime competitor, Air Products & Chemicals Inc. (APD) is expected to release its third quarter results on July 24, 2012.
We maintain a Neutral recommendation on Praxair. The stock also carries a Zacks #4 Rank, implying a short-term (1-3 months) Sell rating.
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