Check on China: Hanwei Energy Services

In late January and the first half of February, China's worst snowstorms and most severe winter weather since the government began keeping records in 1950 wreaked havoc on the country's energy infrastructure. Heavy snowfall, sleet and freezing temperatures disrupted coal shipments, crippled mainland transportation networks near oil and gas production facilities, snapped power lines, froze pipelines and even caused a number of power plants to shut down.
 
Outages left millions without power. Coal, which fuels 80% of China’s electricity supply, soared to record prices. Inflation in the country surged to an 11-year high in February. And electricity shortages, spikes in energy prices and the Chinese government's freezing of oil, natural gas, electricity and water prices for individual consumers are squeezing energy company profits.
 
The good news is the unusually rough weather that caused $3 billion in damages, according to the Civil Affairs Ministry, has blown over. And while it promises to be a tough year for China's battered energy industry, Chinese power companies and their suppliers remain good long-term bets, since the country's energy demand will continue to be robust (many industry analysts say Chinese power companies can expect double-digit consumption growth).
 
Hanwei Energy Services Corp. (TSE: HE.TO) serves major energy companies by providing products for the oil, coal, and wind power industries. The company manufactures and sells high-pressure, FRP (fiberglass reinforced plastic) pipes to the oil industry, develops pollution control products for the coal industry, and also engages in wind blade and other wind power product production.
 
Last December, Hanwei entered into an agreement with Daqing Deta Electric Co. Ltd., a provider of wind power turbines, blades, towers and control systems, to supply $232 million of wind power equipment over a three-year period. The initial order called for Hanwei to engineer, build and provide Deta with various wind power products, including 20 FRP wind blade sets, 20 turbines and 30 towers.

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