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Dow and Johnson Matthey License Process Technology to Huayi

Zacks Equity Research

Dow Inc. DOW and Johnson Matthey announced that Guangxi Huayi New Material Company Ltd. selected LP Oxo Selector 10 Technology for producing butanol at a new manufacturing plant.

Under the license, the facility is expected to be constructed at the integrated petrochemical complex of Huayi in Qinzhou Port, P.R. China. Notably, the facility will likely have an annual butanol capacity of 300,000 metric tons.

LP Oxo Selector 10 Technology, which is licensed through Dow and Johnson Matthey, allows efficient butanol production, with low operating costs and capital investment. Notably, Dow and Johnson Matthey offer personalized plant designs, performance assurances, technical support (pre- and post-plant start-up), continued technology updates, and many more to the licensees.

To date, the suite of LP Oxo Selector Technology has been licensed into a large number of projects throughout 15 countries.

Per Dow’s management, its Licensing & Catalyst technologies platform remains significant for its long-term growth.

Dow and Johnson Matthey will help Huayi to expand by offering a variety of downstream applications from paint and coatings to adhesives and sealants. Notably, the new plant is Johnson Matthey’s 55th license of LP Oxo Technology in collaboration with Dow.

Dow’s shares have gained 6.7% over the past six months compared with 4.5% growth of the industry.

 

 

Its adjusted earnings of 78 cents per share for the fourth quarter beat the Zacks Consensus Estimate of 74 cents.

Net sales declined 15% year over year to $10,204 million. However, it beat the Zacks Consensus Estimate of $10,015.4 million.

On the fourth-quarter earnings call, Dow said that it will remain focused on advancing its investments in higher-return growth projects, especially in sectors where it is seeing favorable demand conditions. The company also expects to retain its competitive cost positions by leveraging its unique feedstock capabilities.

Dow expects to further reduce its cost structure throughout 2020 as it completes the stranded cost removal. The company also intends to direct its free cash flow toward debt reduction and shareholder returns.

Dow Inc. Price and Consensus

 

Dow Inc. Price and Consensus

Dow Inc. price-consensus-chart | Dow Inc. Quote

Zacks Rank & Stocks to Consider

Dow currently carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks in the basic materials space are Daqo New Energy Corp. DQ, Sandstorm Gold Ltd SAND and Commercial Metals Company CMC.

Daqo New Energy has a projected earnings growth rate of 353.7% for 2020. The company’s shares have rallied 137.1% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Sandstorm Gold has an estimated earnings growth rate of 66.7% for fiscal 2020. It currently flaunts a Zacks Rank #1. The company’s shares have rallied 30.1% in a year.

Commercial Metals presently has a Zacks Rank #2 (Buy) and a projected earnings growth rate of 20.2% for 2020. The company’s shares have rallied 30.7% in a year.

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