The Feasibility Analysis Of Yongzhou Jinying Company M33Methanol Gasoline Project

China Jinying Petroleum New Energy Co., Ltd. is a new high-tech energycorporation petroleum, incorporated in2009in Hong Kong. The company hasresearched and developed production of methanol and ethanol mixed gasoline additiveand substitute fuel with independent intellectual property rights. In September2010,China Jinying Petroleum New Energy Co., Ltd. seted up a wholly owned subsidiary–Yongzhou Jinying Petroleum New Energy Co., Ltd. in Yongzhou, Hunan Province andplanned to invest260million yuan in modified methanol fuel (M33) project withannual output of90Tons per year in Yongzhou.The project feasibility analysis is to make systematic and comprehensive researchand analysis and to use the evaluation of scientific technology to obtain a series offinancial and non-financial evaluation to finalize the feasibility of the project beforemaking investment decisions. The modified methanol fuel M33Produced by Jinyingcompany is superior in performance and can bring good environment and socialbenefits,and is expected to have a good return on investment. But the project has alarge amount of investment, and the failure of the project will give the companyserious losses, so it is necessary to analyze its financial viability. In addition, manydifficulties will arise when the project is specifically implemented. For example,national policy support is not enough, distribution network is limited, productperformance can not fully meet the needs of the market and so on. Before theimplementation of the project it is necessary to analyze the associated risks anddevelop appropriate responses. In short, the project has certain risks, so it is necessaryto make a comprehensive analysis of the feasibility of the project before investing inthe project.From the start of methanol fuel industry environment,we should keep thecombination between theoretical knowledge and the actual situation of the JinYingcompany. Meanwhile, we pay more attention to the qualitative analysis andquantitative analysis on the basis of the literature. In the process of analysis, ouranalysis focus on operation viability and financial feasibility of the investment M33methanol gasoline project. Then we analyze the operational risks and financial risksthe project faces, and put forward the relevant proposals.By analysing, we find that methanol gasoline industry is in line with national industrial development strategy. The M33methanol gasoline project of Jin Yingcampany can bring good social and environmental benefits. Nowadays the methanolgasoline on market is mainly M5, M15, M50, M85and M100. Compared with theproducts above, the M33methanol gasoline of Jin Ying campany has the advantageof technology and market. Considering from the finance, we can not predict futuremarket conditions accurately, so we use the scenario analysis, that is, in expectedfuture sales of684.4million,20billion and30billion yuan a year cases, we estimatethe future income statement and cash flow conditions, then, we calculate and analyzethe project’s financial indicators. By analyzing the present value of the project,payback period, rate of return and risk, we conclude that the project is feasible on thefinancial side.