SHANGHAI - Hangxiao Steel Structure Co Ltd received an order worth $69.56 million from Reliance Infrastructure Ltd, a subsidiary of India's Reliance Anil Dhirubhai Ambani Group, on Thursday, marking substantial progress in the Hangzhou-based company's overseas business.
In a statement filed with the Shanghai Stock Exchange, Hangxiao Steel Structure said it will provide steel structure for the Indian company's power plant and coal storehouse 17 months after it receives the design blueprint.
The deal was made between Hangxiao Steel Structure and Reliance Infrastructure, while Asia Pacific Power International Ltd, is acting as purchase agent for the deal.
Hangxiao Steel Structure has been seeking to develop overseas and this deal may push the company in the right direction after several unsuccessful attempts, said Zhang Qi, an industrial analyst from TX Investment Consulting Co Ltd.
In March 2007, the Hangzhou-based company was reported to have received a 34.4 billion yuan ($5.19 billion) order from Angola. Spurred by the news, Hangxiao's shares surged from 4.14 yuan apiece to 10.75 yuan between Feb 12 and March 16, up 159 percent.
However, the deal later proved to be non-existent and the company's share price dropped shortly thereafter. Trading in its shares was suspended on March 19, 2007, and the firm was fined 1.1 million yuan by regulators for illicit information disclosure.
"The reputation of the company was ruined in the domestic capital market by this incident, and this new deal will perk up the company's morale," said Zhang.
Hangxiao Steel Structure is working hard to explore emerging markets in India and south Asian countries, especially as the global meltdown affected its traditional markets.
Although, analysts said China's steel structure market is still in its infancy and has great potential.
