Back to top

Dow Chemical Technologies Support Green Initiatives in China

Read MoreHide Full Article

Dow Chemical recently said that its innovative technologies have been recommended for use in projects supported by the U.S.-China Building Efficiency and Green Development Fund.

The Fund is a public-private partnership convened by the Paulson Institute that aims to provide financing to bring innovative technologies from the U.S. to China to help mitigate building-energy emissions.

Dow’s solutions and expertise will play a major role in supporting the overall goal of bridging green technology implementation and affordability in China. The chemical giant remains committed to help China achieve its climate change goals since the plans to launch the Fund were declared in Sep 2014. In Jun 2016, two cities in China signed letters of intent to set up infrastructure for investment in five construction projects in which recognized innovations will be used.

Dow’s engagement with the Fund is aligned to its 2025 Sustainability Goals. Involvement with the Fund has provided the company opportunities to build relationships and gain recognition in the Chinese marketplace. Dow serves as one of the core members of the Paulson Institute’s CEO Council for Sustainable Urbanization.

The company’s solutions in the Fund’s recommended technologies include Dow Building Solutions, Dow Construction Chemicals, Dow Polyurethanes, Dow Elastomers and Dow Coating Materials.

As China represents roughly half of all new construction globally for the foreseeable future, Dow is working with governments as well as U.S. and Chinese companies to make sure that sustainability is considered at the design phase of building development. With 40% of global carbon emissions coming from buildings, building technology adoption should be the first priority to help China achieve its ambitious climate goals, Dow noted.

Dow’s shares closed around 0.6% higher at $54.33 last Tuesday.

Dow’s adjusted earnings for third-quarter 2016 topped the Zacks Consensus Estimate, aided by its productivity and cost-reduction actions. However, profit (as reported) slid year over year, hurt by charges related to the Dow Corning ownership restructure. Revenues rose year over year, and beat expectations.

The company’s building and construction business saw higher volume in the quarter on healthy demand for acrylic-based construction chemicals and sustained adoption of Bluedge polymeric flame retardant technology. Coating materials volumes rose on healthy growth in Asia Pacific and gains across architectural and industrial markets. Polyurethane volumes rose on higher demand for downstream, higher-margin system applications while the elastomers business registered record volumes on robust demand for automotive plastic components.

Dow should benefit from its productivity and aggressive portfolio management actions as well as strategic investments in the U.S. Gulf Coast and the Middle East. The company is also moving forward with its planned mega-merger with DuPont , which is expected to create significant synergies. Dow should also gain from cost synergies associated with Dow Corning Silicones business in 2016.

However, Dow’s agriculture business remains affected by depressed crop commodity prices. Its crop protection volumes are expected to remain under pressure through the remainder of 2016. The company also faces weak demand in the energy market and pricing & currency headwinds.

Dow currently carries a Zacks Rank #3 (Hold).

Other Stocks to Consider

Better-ranked companies in the chemical space include The Chemours Company (CC - Free Report) and FMC Corporation (FMC - Free Report) , both holding a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Chemours has an expected earnings growth of 44.7% for the current year.

FMC has an expected earnings growth of around 14.1% for the current year.

Zacks’ Best Private Investment Ideas

In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?

Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>   

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

FMC Corporation (FMC) - free report >>

Chemours Company (The) (CC) - free report >>

More from Zacks Analyst Blog

You May Like