HanKore

HanKore: the EGM to approve the CEI RTO deal will happen today, where approval is likely. Maybank-KE thinks HanKore will go on an acquisition spree, given sufficient targets in its pipeline and its much stronger financials after the deal. Policy support should provide near-term catalysts for the sector. China’s State Council is likely to approve a Water Pollution Prevention Plan submitted by its National Development and Reform Commission in the next one month. MKE expects more stringent wastewater disposal standards and higher treatment coverage. The plan is also likely to offer a more detailed timeline for China’s goals. It marks the execution phase of the government’s water-pollution-control ambitions. This could force out inefficient, low-quality players and propel further industry consolidation. Maybank-KE thinks it is the stock to own for FY14. Rolling TP to FY16e at $1.26, pegged to 30x P/E. MKE maintains Buy