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Strong Buy
Summery and pictures of my visit to CHGY headquarter, mine, and plant!I visited CHGY last week, look below the picture to read more! Here is the power station Here is the mine: I have 25 pictures of my visit here: http://s411.photobucket.com/albums/pp199/firehelixmedia/CHGY/ =====Summery of my visit===== Company HeadquarterMy first impression of CHGY was how modest its headquarter was relative to the size of its operations. The CEO and owner, Mr Ding, had operated out of the same building for more than 10 years, and shows non of the lavishness and wastefulness now commonly associated with coal company owners in China. You would normally expect several hummers, bentleys, or at least several mercedes if you come across coal company owners in China - that isn't the case here. Mr Ding was very welcome and told me that I was the first foreign shareholder to request a visit to their company. He had people arrange drivers/meals/hotel for me during my visit to the coal mine and power plant - one of the most thoughtful hosts I have visted - despite me being just an individual shareholder. Mr Ding himself is pretty low-key person, and listened as much as he spoke. I mentioned one of the main problems of CHGY was the lack of PR to promote investor awareness and communication. He told me in person that he has focused only on operations and not much on PR. His main strength, he determined, was running the operational as efficiently as possible (the company is so focused on efficiency that it actually makes bricks out of the burnt coal waste powder from its power plants and sells them - talk about not wasting anything). Mr Ding believed the rest would take care of itself if he focused on operations. He said it took him a while to realize the importance a PR campaign has for shareholders. I don't blame him - it is difficult for an action-oriented Mr Ding to understand all the intricacies of public relations in another country. The good news is CHGY is starting a compaign in early March 2010 to promote awareness and communication. Further, he wants to bring CHGY to a major stock exchange in August/September this year. He mentioned his goal is to be able to attract some larger investors and buy out local mines with no access to foreign or domestic capital markets at discounts. Mr Ding mentioned that he was very upbeat about the prospects for power generation and the coal industry in China in the foreseeable future, as he mentioned that China's net coal import has grown dramatically during the past year - there is a domestic shortage of suppliers. He also mentioned that, the coal mine he operates in Mongolia has one huge advantage over the big, traditional mines being operated in Shanxi province - known for its coal mines since decades ago. The Mongolian mines he operates - he explained - has some of the highest GCV of 6000-7000 - of any coal mine in China. Most importantly, does not contain a lot of gas, thus dramatically reducing the risk of gas explosions - the leading cause of worker injuries and death. The advantages above are further cemented by a new policy of the Mongolian Province to enforce minimum production requirements. The policy dictates that only mines with annual production capacity of 600,000 tons may continue operations, as the government intend to force consolidation and clean up the smaller, poorly equipped mines to reduce worker death. CHGY, with some of the best equipment installed just last year and annual production capacity of over 1 million tons - are well over the threshhold. Lunch Mr Ding treated me in a restaurant right below his office, and at the table was another guest who was a reporter for the XinHua news agency. The reporter mentioned to me that Mr Ding is one of the few self-made, operationally-focused types in the coal industry in Mongolia. He said most coal owners in China are either friends or relatives of high powered officials and have zero interest in operational efficiency or long-term planning - and Mr Ding is a rare kind of self-made industrialist. It could be flattery but I saw that he meant it when he said it. Toward the Mine On my way toward the coal mine - 3.5 hours away on a highway - I asked my driver and company several questions, like how they handle the coal produced, transportation, and sales. The way the process works is that coal is first extracted from the mine and brought into a storage compound, and depending on how many idle workers are available, coal is divided into powder and rock. The large rock pieces sell for much more than powder or mixed coal. There are two shifts of trucks driving 24 hours/day transporting as much coal as possible toward their power plants or rail stations. CHGY operated at full speed the last few month of 2009 and mined and transported over 3000 tons of coal per day, translating into over 90,000 tons/month. I counted over 20 trucks next to the compound. At the exit of the mining compound is a huge scale that weighs the outgoing trucks to get an accurate measure of the coal being transported out.The coal produced from CHGY's mine is already famous in Qinhuangdao Port - one of the largest coal port in China - since it considered to be of the highest quality at GCV 7000. Just several weeks ago, some of the coal sold by CHGY in Qinghuangdao fetched more than 760 RMB/ton, or nearly 110 USD/ton. Staying overnight at a 5-star hotel Courtesy of Mr Ding Mr Ding generously treated me to a stay at a 5-star hotel in a town close to the mine, and CHGY's power stations supply the entire heating and some of the power of this town. The stay was nice and the next day we headed toward the power station. Toward the Power Station The first thing I saw at the power station was the new residential buildings CHGY built for its employees. The company takes care of its employees pretty well and constructed new apartments for them. There is also a new office building built for the power plant officers and workers - and this is better than the office Mr Ding himself uses. I noticed that many of Mr Ding's officers generally work in better conditions than the himself. I then visited the main office of the power plant and was taken on a tour of the place. I was not allowed to go inside as only trained workers were allowed in. I saw a huge (probably 20 stories) high building with a huge conveyer belt transporting coal into the massive chambers of this plant, and a large cooling tower (or I think it was one) nearby. Next to the plant, there was a facility that turned burnt coal waste powder into bricks for sell - this company is pretty efficient. The plant also had its own basketball court nearby for its employees to excercise during breaks. Back to Company Headquarter I returned to the company headquarter at noon and saw Mr Ding one more time, but was unable to chat further as he had to go to a conference at another location. The trip was very educational and does not paint the picture of a dirty-and-dangerous coal industry China is known for. I observed that Mr Ding is frugal and is well ahead of the competition of its peers when it comes to operational focus and planning. He just needs a better PR compaign and a sharper focus on investor relations to bring CHGY the recognition that it deserves. |
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Msg # | Subject | Author | Recs | Date Posted |
1726 | Re: Summery and pictures of my visit to CHGY headquarter, mine, and plant! | northenlightsk05 | 0 | 3/2/2010 3:34:39 PM |
1727 | Re: Summery and pictures of my visit to CHGY headquarter, mine, and plant! | Chris II | 0 | 3/2/2010 4:02:21 PM |
1728 | Re: Summery and pictures of my visit to CHGY headquarter, mine, and plant! | summer | 0 | 3/2/2010 4:21:25 PM |
1729 | Re: Summery and pictures of my visit to CHGY headquarter, mine, and plant! | quick007 | 0 | 3/2/2010 4:24:15 PM |
1730 | Re: Summery and pictures of my visit to CHGY headquarter, mine, and plant! | v80alue | 0 | 3/2/2010 5:44:09 PM |
1731 | Re: Summery and pictures of my visit to CHGY headquarter, mine, and plant! | stockguruu | 0 | 3/2/2010 7:41:43 PM |
1736 | Re: Summery and pictures of my visit to CHGY headquarter, mine, and plant! | Spartacus07 | 3 | 3/3/2010 7:21:25 AM |