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Praxair to Supply Gases for EverDisplay Optronics in China

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Praxair’s new deal

On January 22, 2018, Praxair (PX) announced that it has entered a long-term contract with Everdisplay Optronics (EDO), a China-based producer of 4.5 generation AMOLED displays. Praxair will supply helium, nitrogen, oxygen, and other gases. PX will build a new plant to provide 720 tons of nitrogen to EDO’s projects in Shanghai. Supply from the plant is expected to begin from mid-2018.

Through this deal, Praxair further enhances its strong presence in China. However, Praxair didn’t disclose the financial aspects of the contract. “China is one of the world’s largest and fastest growing AMOLED markets,” said Will Li, president of Praxair China. “This project further builds on our long history of successfully serving electronics customers in China and around the world. Through this new agreement, we will continue to enhance our competitive position in Shanghai.”

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Stock price update

Praxair rose 2.4% and closed at $165.69 for the week ended January 26, 2018. The stock traded 11.7% higher than the 100-day moving average price of $148.36, indicating an upward trend in the stock. However, investors need to be cautious as its 14-day relative strength index of 68 suggests its movement towards an overbought situation. An  RSI of 70 and above indicates that the stock has been overbought while an RSI of 30 and below indicates that the stock has moved into the oversold situation temporarily.

Investors can get indirect exposure to Praxair by investing in the Vanguard Materials ETF (VAW), which invests 4.7% of its portfolio in Praxair. The fund also provides exposure to DowDuPont (DWDP), Monsanto (MON), and LyondellBasell (LYB), which have weights of 17.8%, 5.4%, and 4.1%, respectively, as of January 26, 2018.

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