6.4.12

KunLun Energy Co. Ltd


Saw this company (Kunlun Energy Co. Ltd) on the news a few days ago and got curious about it...

I have done some research on the firm and found out that it is actually quite a Fundamentally Sound company, being the Biggest Gas Company in China!

Let's direct you to the 3 main articles i have seen and what we got there:


1) http://www.reuters.com/article/2012/03/29/idUSL3E8ES66Z20120329
Hong Kong-listed Kunlun Energy, headed by a vice president of PetroChina, has become a leading player in the sector. It builds gas liquefaction plants, operates LNG receiving terminals, trucks the fuel and builds LNG filling stations.

The booming trucked LNG business is now targetting the country's tens of thousands of trucks, city buses, river fleets and fishing boats as the next users, aiming for an ambitious 10 percent of China's transportation diesel market by 2015.




2) http://www.businessweek.com/news/2012-04-02/kunlun-energy-seeks-about-1-dot-4-billion-in-share-sale
Kunlun Energy Co. (135), a Chinese gas supplier controlled by PetroChina Co. (857), is seeking about $1.4 billion in a stock offering to accelerate its liquefied-natural gas expansion.

Last week, Kunlun posted full-year sales of HK$25.4 billion and net income of HK$5.61 billion. Profit exceeded the average estimate of HK$4.85 billion from a Bloomberg News survey of eight analysts.




3) http://www.ft.com/cms/s/0/39d82ca6-7d47-11e1-a676-00144feab49a.html#axzz1rG0pSlma
Richard Ong’s RRJ Capital and Temasek, Singapore’s state investment agency, are investing about $600m to anchor Kunlun Energy’s $1.35bn capital raising, two people familiar with the deal said. In addition, key investors in the deal included CIC, China’s sovereign wealth fund, which put in $50m and Petronas, the national oil company of Malaysia, which took a smaller stake.



Now as for the stock chart...


The stock price has already risen almost 40% from Dec last year when it was at around 10 HKD. You can see that the rally looks unstoppable from here.
A calculation of its PEG (Read more about it here - http://kissinvesting.blogspot.com/2012/03/why-pe-ratio-might-be-useless-and-what.html) shows around 0.75

Key Take-away:

In my opinion, the
fundamentals and growth prospects for this company looks D*mn Good. Other countries' sovereign funds are supporting it, and as China turns to eco-friendly alternative for fuel, LNG is the best option as of now. (nope, not water or sun or wind energy.. all these are just not easily transported... to be honest). 

However, i think that the
best time to enter will be for the retracement to come.. and a fibonacci retracement indicator will be really useful when the time comes.

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