In today’s briefing:
- Contenders for MSCI Korea Inclusion in 2H 2023
- Dongfang Electric (1072 HK): Profit Surged, Record New Orders Signed
Contenders for MSCI Korea Inclusion in 2H 2023
- We have provided a list of 10 stocks that could be included in the MSCI Korea index in 2H 2023.
- Among these 10 companies, the top five companies with the highest free float based market cap have greater probabilities of becoming included in the index, in our view.
- The five companies include Jyp Entertainment (035900 KS), Hyundai Rotem Company (064350 KS), DB Hitek Co., Ltd. (000990 KS), Cs Wind Corp (112610 KS), and LS Corp (006260 KS).
Dongfang Electric (1072 HK): Profit Surged, Record New Orders Signed
- The market should be happy with the 43.9% YoY growth in recurring earnings at Dongfang Electric (1072 HK) in 1Q23. Gross margin of 18.7% is the highest since 2Q21.
- New orders surged 26.1% YoY and 92.4% QoQ to a record Rmb22.6bn in 1Q23. We estimate backlog equals to 1.42x FY23F consensus revenue, meaning a very secured pipeline.
- While EPS dilution is a concern, this has already been reflected in share price. The acquisitions of subsidiaries will enhance FY23 earnings. Its 8x PER and 0.8x P/B are inexpensive.
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