CB&I Wins China Contract - Analyst Blog

Chicago Bridge & Iron Company (CBI) announced that it has won a contract from Liaoning Tongyi Petrochemical Co., Ltd. for the engineering design consultancy work for OCT olefins conversion and dehydrogenation units at several sites in China.

The units will produce isobutylene and propylene which are the building blocks in the petrochemical industry for a variety of finished products, including plastics and automotive components.

Chicago Bridge & Iron Company is a worldwide provider of fully integrated specialty engineering, procurement and construction (EPC) services and related licensed processes, primarily used by the energy markets for large-scale storage and refining of liquids and gases. We believe the stock will continue to outperform over the near term. The company's improving outlook and strong fundamentals only strengthen its appeal.

CBI designs, procures, fabricates and builds facilities and major equipment for power industry customers around the globe. Its expertise encompasses both traditional and emerging technologies, including electric, cogeneration nuclear, LNG, hydroelectric and wind power.

The business depends on major construction projects, time and cost overruns of which may result in significant fluctuations in cash flow and earnings.

Revenue and earnings may be adversely affected by a reduced level of activity in the hydrocarbon industry, especially in light of the global financial and economic crisis.

The company's improving outlook and strong fundamentals strengthen our belief that the stock will continue to perform well over the near term. A major competitor of Chicago Bridge & Iron Company is Matrix Service Co. (MTRX).

Chicago Bridge & Iron Company is a worldwide provider of fully-integrated specialty engineering, procurement and construction services and related licensed processes, primarily used in energy markets for large-scale storage and refining of liquids and gases. The company segments its operations into four broad market sectors: Liquefied Natural Gas (LNG), Energy Processes, Steel Plate Structures and Lummus Technologies.

We currently maintain our Neutral recommendation on Chicago Bridge & Iron Company.

 
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