Hi Guangzhi, can you expand on Geo’s M&A plans, any targets found or when can it be completed? I understand they are intending to seek an acquisition to boost their reserves for a stated amount and an ROI of >20%. How difficult or easy is it to find such a target given that coal prices have increased substantially since M&A plans were announced in 3Q17?
– Asked by a participant during Weekly Market Outlook (19 Mar 2018)
Thank you for your question!
It is expected that Geo will announce some acquisitions this year. Right now the average market price of mines measuring by reserves is US$2.5 to US$3/tonne. Based on the outlook of coal price of US$40/tonne, Geo could achieve the target. In 1Q18, Geo approached several targets.
– Chen Guangzhi, Investment Analyst
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About :Guangzhi graduated from Singapore Management University with a Master degree in Applied Finance and from South China University of Technology with a Bachelor degree in Electronic Commerce.
About :Paul has almost 20 years of experience as a fund manager and sell-side analyst. During his time as fund manager, he has managed multiple funds and mandates including capital guaranteed, dividend income, renewable energy, single country and regionally focused funds.
About :Tara covers the REITs and Property sector. Previously a consultant advising listed companies on their investor relations strategy, Tara’s transactions experience includes high-profile M&As, IPOs and privatisations.
About :Zheng Jieyuan is a research analyst in Phillip Securities Research, focusing on the China and Hong Kong markets as well as China stocks listed in the US.