HanKore

HanKore: 3QFY14 net loss of Rmb111.9m from profit of Rmb31.8m, affected by fair value loss of Rmb109.9m from contingent consideration payable in relation to the acquisition of Jiangsu Tong Yong Environment Engineering and warrants exercised. Bottom line was also plagued by higher finance costs (+67%) from the issue of fixed rate Medium Term Notes and administrative expenses (+314%) due mainly to an employee share option issue and expenses in relation to its recent capital market activities. Stripping out these one-off items, recurring net profit would have been 15% higher at Rmb21.8m on revenue of Rmb125.7m (+56%), buoyed by higher construction revenue (+152%). Meanwhile, revenue raced 56% to Rmb125.7m, buoyed by an increase in work done for new and ongoing projects, higher construction revenue and the consolidation of Jiangsu Tongyong Environment Engineering. Due diligence and commercial negotiation are still in process for its framework agreement with China Everbright Water Investments, with an exclusivity period up to 31 May 14. NAV of Rmb0.38/share.