HanKore

HanKore: CIMB reckons that the recent underperformance of HanKore’s share price can be partially attributed to the uncertainty surrounding the deal. A scenario analysis in its initiation report indicated a TP of $0.101 for HanKore if the deal eventually failed. Management still remains positive that the deal would go through and said that negotiations regarding the terms of the deal were ongoing. CIMB also believe the acquisition will eventually go through as the deal will benefit both parties- HanKore will benefit from significant interest expense savings and a better chance of clinching future projects while CEI will own a controlling stake in HanKore, which specialises in water investment, thus allowing CEI to unlock resources to focus on its own waste-to-energy business. CIMB reckons that the one-month extension is reasonable, considering the complexity of dealing with a China SOE and all the necessary negotiations for more favourable terms. House maintains Add rating with $0.156 TP.