The stock price for China Natural Gas (OTC:CHNG) appears about to break out for valid reasons. Energy, and especially clean energy, is critical to China. Clean natural gas and compressed natural gas is being mandated by the PRC and local governments. China Natural Gas has a head start in the mid and down stream segment of this important source of energy- natural gas.
Most Chinese regional stocks, including CHNG, have withstood recent negative media on China, a long run that is strengthening the government's intervention to contain the booming economy. More specific to CHNG, the PRC has also added tax incentives for use of clean energy. Solving pollution problems is critical to China's survival. Now that natural gas is a competitive energy source, the outlook is blooming.
CHNG's ability to take advantage of the favorable situations has resulted in more than doubling of revenues and income for several years. Major commitments to LPN facilities for the future will further diversify the company products. Their regional natural gas pipeline and strong management keeps them competitive and less exposed to newly available foreign money. The overall Chinese markets have locals lined up to buy stocks and foreigners adding venture money for growth. TA analysis is supportive of these great fundamentals.
Now, one can expect the added trade volume to be supportive as the stock is bumping against all time highs. Management's recent guidance for additional filling stations, expanding into virgin territories. Their likely listing on a major U.S. exchange and a robust '07 and '08 outlook is more than just strong support at these latest price levels. The strong stable management has a good record of meeting its past optimistic commitments. I have followed the Chinese market for years and have averaged up my holdings of CHNG.
CHNG 1-yr chart:
Disclosure: The author has a position in CHNG.