Russia infrastructure play: KHD Humboldt

Posted by Tim

February 19, 2008

KHD Humbolt Wedag, International, Ltd. (KHD: 26.17 +0.17 +0.65%) has announced two new concrete plant contracts signed with Russian concrete companies worth $119 million. This is a pretty nice addition to the company’s reported order backlog of $925 million.

KHD provides industrial equipment like concrete plants primarily in developing nations, with a significant amount of their business in Russia and India. As these countries work to improve their infrastuctures, KHD will have lots of opportunities for increased orders, revenues and profits.

From what information I can find, this company has had very little following in the financial world. KHD is Hong Kong based and in 2007 divested itself of a financial services arm, that had up until that time defined the company. They now are focused 100% on the equipment business, and growth prospects are excellent there.

The share price has fallen significantly recently on no news. The press release today (link below) has had a positive effect on the shares. I think the company has huge longer term potential and the stock could double or triple in the next few years. KHD is a component of this site’s hypothetical 20 Stock Portfolio.

KHD Humboldt Wedag International, Ltd. - News Release

Note: I have a long position in KHD.