APD: Capital Deployment Kickoff; Raising Numbers on Lu'An JV

Summary:

Let the capital deployment begin! Air Products announced on Sunday a new $1.3bn, 60%-owned JV with Lu'An Clean Energy for production of coal-based synthesis gas in China (syngas is a combination of hydrogen and carbon monoxide or "CO"). We view the move as strategically sensible and consistent with hints dropped on the company's F3Q17 earnings call on 1 August. While investment of the company's excess capital is a highly anticipated event, we would nevertheless expect APD shares to perform relatively well on today’s session based on forward progress.