Monitor for breakout above 0.130 again, following up from previous post…….
Sent: Tuesday, February 25, 2014 12:36 PM
Subject: ************** Consolidating before Breakout: Hankore.... Monitor for break of 0.130 i surge of new HIGH.
Hankore is currently consolidating from 0.122 to 0.130 at the moment after seeing a fairly reasonable run up and a breakout of the sort term downtrend line as mentioned previously. More upside likely if the sellers at 0.130 and 0.131 get taken out and Volume remains strong. Currently at TOP Volume and high today at 0.129. DMG target price at 0.161. Those waiting for the break can consider accumulating within this range for more profit if it does happen. Average up on breakout can be done also and take profit from 0.136 to 0.140 first.
Stop loss at 0.119
Sent: Monday, February 17, 2014 11:40 AM
Subject: ************ May continue uptrend on breakout: Hankore. Share price 0.119.
Subject: ************ May continue uptrend on breakout: Hankore. Share price 0.119.
Hankore has staged a strong breakout above the channel resistance downward sloping line last Friday. Quite a convincing breakout seen on Top volume previously. This could mean a reversal of the short term down trend. Next resistance to watch is the psychological 0.120 level which is also the high for today. At this price level it has also lifted above the 20 DAY Short term MA which can signal strong short term momentum. A break above 0.120 can pave the way to 0.125 which was the previous high in Jan last month. Lets see whether sellers at 0.120 get cleared out?
DMG – 21ST February 2014
HanKore Environment: SGD0.123 BUY (TP: SGD0.161)
Highlights From The Non-Deal Roadshow
HanKore Environment Tech (Hankore) chairman David Chen and ED/CFO Felix Yau participated in our 19 Feb non-deal roadshow (NDR) in Singapore. We have a BUY rating on the company with a SGD0.161 TP that is based on 25x FY15F P/E. Hankore’s strong points include further progress in its merger with CEI, potentially lower financing costs and solid asset quality.
Merger with China Everbright International or CEI (257 HK, NEUTRAL, TP: HKD9.04) on track. As reiterated earlier, Hankore’s merger with CEI is making good progress. The injection of the latter’s assets should take place going into FY15 and will bring the former’s combined capacity to ~3.6m tonnes/day. The union between HanKore and CEI is a highly complementary one, given the location of their water assets. Each has a foothold in Jiangsu and Shandong, which are amongst China’s provinces with the highest GDP growth levels.
State backing to lower HanKore’s financing cost. With CEI – a state-owned enterprise (SOE) backed by the State Council of China – as HanKore’s parent, we will see the company’s financing costs fall to ~4% from 7.5% currently. This will give rise to cost savings as well as provide the company with higher returns on its wastewater treatment investments.
Asset quality to be key differentiator. HanKore’s existing 11 wastewater treatment plants, which have design capacities of ~155,000 tonnes/day on average, are the key large-sized plants in their respective regions. These plants have the potential to tap on rising economies of scale and operating leverage as they grow in operating capacity, thereby outperforming other plants of smaller scale through greater cost efficiencies.
Re-rating in motion. Maintain BUY with SGD0.161 TP. We believe that as HanKore draws closer to completing its merger with CEI, its valuations will re-rate. This process is already underway. At the current price of SGD0.123, the stock is trading at a 19x FY15 P/E (incorporating CEI’s asset injection), compared with the peer average of 30x. Maintain BUY, with our SGD0.161 TP based on a 25x FY15 P/E.
Highlights From The Non-Deal Roadshow
HanKore Environment Tech (Hankore) chairman David Chen and ED/CFO Felix Yau participated in our 19 Feb non-deal roadshow (NDR) in Singapore. We have a BUY rating on the company with a SGD0.161 TP that is based on 25x FY15F P/E. Hankore’s strong points include further progress in its merger with CEI, potentially lower financing costs and solid asset quality.
Merger with China Everbright International or CEI (257 HK, NEUTRAL, TP: HKD9.04) on track. As reiterated earlier, Hankore’s merger with CEI is making good progress. The injection of the latter’s assets should take place going into FY15 and will bring the former’s combined capacity to ~3.6m tonnes/day. The union between HanKore and CEI is a highly complementary one, given the location of their water assets. Each has a foothold in Jiangsu and Shandong, which are amongst China’s provinces with the highest GDP growth levels.
State backing to lower HanKore’s financing cost. With CEI – a state-owned enterprise (SOE) backed by the State Council of China – as HanKore’s parent, we will see the company’s financing costs fall to ~4% from 7.5% currently. This will give rise to cost savings as well as provide the company with higher returns on its wastewater treatment investments.
Asset quality to be key differentiator. HanKore’s existing 11 wastewater treatment plants, which have design capacities of ~155,000 tonnes/day on average, are the key large-sized plants in their respective regions. These plants have the potential to tap on rising economies of scale and operating leverage as they grow in operating capacity, thereby outperforming other plants of smaller scale through greater cost efficiencies.
Re-rating in motion. Maintain BUY with SGD0.161 TP. We believe that as HanKore draws closer to completing its merger with CEI, its valuations will re-rate. This process is already underway. At the current price of SGD0.123, the stock is trading at a 19x FY15 P/E (incorporating CEI’s asset injection), compared with the peer average of 30x. Maintain BUY, with our SGD0.161 TP based on a 25x FY15 P/E.
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