In today’s briefing:
- MHI (7011 JP): Opportunity or Value Trap?
- Index Rebalance & ETF Flow Recap: MSCI, FTSE, HSCEI, KS200, KQ150, ASX200, STAR50, PCOMP, JDH, Sea
MHI (7011 JP): Opportunity or Value Trap?
- MHI is selling at 9.9x EPS guidance and 0.7x book value, with a dividend yield of 3.0%. We see potential upside of at least 25% beyond the New Years bounce.
- The shares have underperformed for several years due to serious managerial errors. But the mess is being cleaned up and new growth opportunities have emerged.
- Risks include limited margins in the energy and aerospace & defense sectors and the possibility of renewed investment in the failed regional jet aircraft project.
Index Rebalance & ETF Flow Recap: MSCI, FTSE, HSCEI, KS200, KQ150, ASX200, STAR50, PCOMP, JDH, Sea
- The review period for the HSI, HSCEI, HSTECH, HSCI, PCOMP and the FTSE All-World/All-Cap indices ended on 31 December. The changes will be announced in the next few weeks.
- We expect an upweight for JD Health (6618 HK) at the MSCI Feb QIR, while there will be buying in Sea Ltd (SE US) due to the tranched inclusion.
- Inflows continue into the Tracker Fund of Hong Kong Ltd (2800 HK) and Hang Seng H Share Index ETF (2828 HK) even as the markets head lower.
Before it’s here, it’s on Smartkarma
