HL Asia

HL Asia: Co. reiterate view that that it will ‘Think outside China’, setting sights on growing rev from other emerging economies like Indo and Vietnam, and reduce earnings dependence from its China business (currently 80%) to around 65-70%. Co. may also add a fifth business stream of providing after-mkt technical services

Sees potential to improve the industry positioning of each of HLA's four existing business lines - home appliances (Henan Xinfei Electric), diesel engines (US-listed China Yuchai), cement (Tasek Corp) and industrial packaging (Rex Industrial Packaging and GPac Tech) - by expanding product portfolios.

Similarly, Xinfei, whose profitability has taken a hit with heightened competition, may go from making refrigerators to other comfort systems, while grp’s cement business will continue on the back of construction demand locally and in Malaysia. Mkt has diverse Calls on grp with a mean TP of $2.19.