OSK-DMG: Buy HanKore, target price 16.1 cents
Analyst: Sarah Wong & Terence Wong, CFA
David Chen, executive chairman of HanKore Environment. NextInsight file photoHanKore Environment Tech posted a strong operational performance in 2QFY14, with PATMI rising 19.7% y-o-y in 2Q and 62.5% y-o-y in 1H. This was driven by a massive surge in EPC/construction and a healthy growth in wastewater treatment revenues.
The merger process with CEI is progressing well and we maintain our estimate for the asset injection to go through going into FY15.
Maintain BUY and SGD0.161 TP.
2H to see even stronger operational performance. With the completion and/or upgrade of Henan Sanmenxia Phase 1 (30,000 tonnes/day), Nanjing Liuhe Phase 2 (20,000 tonnes/day) and Shaanxi Xianyang Phase 2 (100,000 tonnes/day) by end of 1HFY14, HanKore Environment Tech is set to generate another surge in its recurring wastewater treatment income in 2HFY14.
Meanwhile, construction activities at Jiangsu Kunshan Phase 3 and another Sanmenxia project should continue to lift the construction segment’s revenue in 2HFY14.
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OCBC Investment Research: Buy Goodpack, target price $2.17
Analyst: Yap Kim Leng
David Lam, executive chairman and founder of Goodpack. NextInsight file photoGoodpack’s revenue and PATMI for 2QFY14 met our expectations by increasing 9.8% YoY to US$50.9m and 12.0% to US$12.5m respectively. 1HFY14 revenue at US$103.0m forms 99.9% and 49.1% of our 1HFY14 and FY14 forecasts respectively.
Correspondingly, 1HFY14 PATMI at US$26.4m forms 100.4% and 49.0% of our 1HFY14 and FY14 forecasts.
We maintain our previous investment thesis that new accounts and segments will drive growth as Goodpack acquired a new synthetic rubber client in China and also three new auto parts clients to start off with trials.
We maintain our BUY call with a DCF-based fair value of S$2.17.
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