Hankore

Hankore: ($0.082) Gaining visibility and shareholders’ trust Hankore shares today advanced to a new multi-year high of $0.082, with a substantial 378m shares changing hands by 2.30pm, making it the second most traded stock on the index. Over the weekend, The Edge magazine carried a feature story on Hankore, noting how the group has successfully emerged from a financial restructuring. Hankore is now preparing for a rapid expansion plan to upgrade its existing facilities and to grow via acquisitions. To this end, Hankore is preparing to move its headquarters from Beijing to Singapore, which offers a better platform to engage its investors and bankers. Chairman Chen Dawei will also make the same relocation to support his company. With much scrutiny on S-Chips following various high profile scandals, Mr Chen is keen to build trust amongst its stakeholders, and improve his company’s corporate governance image. Hankore’s public relations efforts are starting to pay off. We observe improving sentiment in the counter, in tandem with increasing coverage on the previously neglected company. Two weeks ago, Market Insights was the first in the street to highlight Hankore’s recovery story. Readers can refer to our commentary dated 10 Sep 2013, titled “Hankore: Precipitating a fresh start”. Maybank-KE Research followed a week later with an unrated report on the stock. We do not rule out more brokers eventually picking up coverage on Hankore, which may lead to improved price discovery for Hankore shares. Hankore trades at just 12.4x P/E compared with its Singapore-listed peers of ~22x.