General Electric Company (GE - Free Report) recently announced that it has signed deals with Huaneng Power International (HPI) and China Power International Development Limited (CPI International), for two steam turbine power generating units in China.
Headquartered in Boston, GE will be establishing two ultra-supercritical steam turbines along with two turbo generators at the Taihang Power Plant. The company is looking forward to producing electricity that will light up around one million homes in the region.
GE will also establish its ultra-supercritical steam turbine generators at the Dabieshan Power Plant phase II project. Dabieshan Power Plant is one of the primary power providers in China’s Hubei Province.
With these two deals, GE expects to meet the increasing high-efficiency power needs of northern and central China.
As a U.S-based multinational, these deals with two of the top power providers in China will help GE expand its markets in China. GE hopes that both the deals will pave the way for long-term strategic associations.
GE’s recent acquisition of French power generating company Alstom has helped it expand its markets to a great extent. GE has divested some of the Alstom’s turbine-related businesses to Ansaldo Energia, in which China’s Shanghai Electric hold a 40% stake. The association with Alstom has allowed GE to expand its market in Pakistan as well. GE recently set up two high-efficiency 9HA gas turbines, one steam turbine and two heat recovery steam generators, manufactured by Alstom, as part of its third project in Pakistan.
With continued portfolio restructuring, GE expects operating earnings from the industrial business to comprise over 90% of its total operating earnings by 2018. Alstom’s assets integrated with GE’s power generating unit should establish the latter as one of the biggest manufacturers of power plant equipment globally.
GE currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space include, Macquarie Infra (MIC - Free Report) , Noble Group Ltd and Lsb Inds Inc (LXU - Free Report) . Macquarie Infra and Noble Group Ltd sport a Zacks Rank #1 (Strong Buy), whereas Lsb Inds Inc has a Zacks Rank #2 (Buy).
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