ORLANDO, Fla., Feb. 18, 2010 (GLOBE NEWSWIRE) -- RedChip Visibility, a division of RedChip Companies, Inc., has initiated coverage on China Natural Gas, Inc. (Nasdaq:CHNG), a clean tech company providing natural gas for transportation use in China.
Clay Mahaffey, CFA, RedChip Research Analyst, reported:
"CHNG's joint venture with the largest natural gas producer in China, China National Petroleum Company (CNPC), simultaneously puts them in both a strong offensive position based on available supply of gas and defensive position since CNPC will not be working with any other compressed natural gas (CNG) operator.
"In addition, CHNG is one of a few companies that received authority to build a natural gas liquefaction (LNG) facility in China based on domestic natural gas supply. The Company's planned LNG facility is a uniquely Chinese business: the size is similar to the peak shaving plants in the U.S., but rather than store the LNG and use at a peak time period, CHNG intends to transport the LNG to more distant provinces and sell at a good margin. LNG consumer prices are set by market prices not the Government. Consequently CHNG is sourcing their product under low Government prices and selling at the market, creating a pricing arbitrage."
"Further, CHNG is talking to a large port and harbor of a nearby river to install refueling for trucks and equipment at that facility. This is analogous to Clean Energy Fuels' (Nasdaq:CLNE) arrangement with the Port of Long Beach in the U.S."
Grubbs continued: "We believe the Company's LNG project and joint venture with China National Petroleum Company (CNPC) are very significant and can generate $100 million of additional revenue over the next few years. Based on these conditions and our 2011 earnings estimates, we are initiating coverage of CHNG with a Strong Buy rating and a target price of $19.50."
To receive a complimentary copy of the RedChip Visibility Initial Research Report for CHNG, please visit: http://www.redchip.com/about/aboutmain.asp?rid=219
To learn more about China Natural Gas, Inc. visit http://www.redchip.com/visibility/investor.asp?symbol=CHNG
About China Natural Gas, Inc.
China Natural Gas transports and sells natural gas to vehicular fueling terminals, as well as commercial, industrial and residential customers through its distribution networks in China's Shaanxi and Henan Provinces. The Company owns approximately 120 km of high-pressure pipelines and operates 24 CNG fueling stations in Shaanxi Province and 12 CNG fueling stations in Henan Province. China Natural Gas' four primary business lines include: (1) the distribution and sale of CNG through Company-owned CNG fueling stations for hybrid (natural gas/gasoline) powered vehicles; (2) the installation, distribution and sale of piped natural gas to residential, commercial and industrial customers through Company-owned pipelines; (3) the distribution and sale of gasoline through Company-owned CNG fueling stations for hybrid (natural gas/gasoline) powered vehicles; and (4) the conversion of gasoline-fueled vehicles to hybrid (natural gas/gasoline) powered vehicles through its auto conversion division.
About RedChip Companies, Inc.
RedChip Companies is an international, small-cap research and financial public relations firm headquartered in Orlando, Florida with affiliate offices in Qingdao and Beijing, China; Paris, France; and Seoul, Korea. RedChip delivers concrete, measurable results for its clients through its extensive national and international network of small-cap institutional and retail investors. RedChip has developed the most comprehensive platform of products and services for small-cap companies, including: RedChip Research™, Traditional Investor Relations, Digital Investor Relations, Institutional and Retail Conferences, RedChip Small-Cap TV™, Social Media Services, and RedChip Radio™. To learn more about RedChip's products and services please visit: http://www.redchip.com/visibility/productsandservices.asp.
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Disclosure
None of the profiles issued by RedChip Companies, Inc., constitutes a recommendation for any investor to purchase or sell any particular security or that any security is suitable for any investor. Any investor should determine whether a particular security is suitable based on the investor's objectives, other securities holdings, financial situation needs, and tax status. China Natural Gas, Inc. ("CHNG") is a client of RedChip Companies, Inc. and of RedChip Visibility, a division of RedChip Companies. CHNG agreed to pay RedChip Companies, Inc. a monthly fee of ten thousand dollars in cash for twelve months of RedChip Visibility Program services, which includes the preparation of the equity research report(s) and investor awareness services. The equity research report(s) are prepared for informational purposes only and are paid for by the company portrayed in the report. The equity research report(s) are not a recommendation of a solicitation to purchase or sell any security, nor do they constitute investment advice. Investor awareness services and programs are designed to help small-cap companies communicate their investment characteristics. These services may include investor conferences, digital and print distribution of CHNG investor-related materials and radio programming. RedChip Companies, Inc., employees and affiliates may have positions and affect transactions in the securities or options of the issuers mentioned herein.