In today’s briefing:
- MSCI May 2022 Index Rebalance Preview: Three Weeks to Start of Review Period
- IE Says Fair And Reasonable In CIMIC’s Target Statement
- Hoban Construction Acquires a 17.4% Stake in HanjinKal
- Xinjiang Goldwind (2208 HK): Positive Messages from Post-FY21 Call
- HDC Hyundai Development: Permanent Business License Cancellation or Temporary Business Suspension?
MSCI May 2022 Index Rebalance Preview: Three Weeks to Start of Review Period
- Given the market volatility, there have been quite a few changes to the potential inclusions and exclusions at the MSCI May SAIR, especially for China.
- There are now three weeks to the start of the review period and we see 40 potential inclusions and 49 potential deletions. Most of the expected changes are in China.
- The largest potential inclusions are Powerchip Semiconductor Manufacturing, Orient Overseas International, Pop Mart International, Eva Airways, China Airlines, Emtek, KT Corp, Sumber Alfaria Trijaya, Hyundai Heavy Industries and Xtep International.
IE Says Fair And Reasonable In CIMIC’s Target Statement
- On the 23 February, Actividades de Construcción y Servicios (ACS SM), via 52.3%-held Hochtief AG (HOT GR) offered $22/share for all CIMIC (CIM AU) shares it does not own.
- The Independent Expert (Grant Thornton) has assessed the Offer and concluded it to be fair and reasonable.
- The Offer is unconditional. The close of the Offer, unless extended, is the 11 April.
Hoban Construction Acquires a 17.4% Stake in HanjinKal
- On 28 March, it was reported that Hoban Construction will acquire a 17.43% stake in Hanjin KAL Corp (180640 KS) from KCGI becoming the second largest shareholder of the company.
- There are some further possibilities of Hoban Construction forming an alliance with Bando Construction later on which could make the shareholding structure of HanjinKal very interesting.
- There has been an increased increase in the travel/leisure related plays (including HanjinKal) with the opening up of travel and fewer COVID restrictions in some countries including in South Korea.
Xinjiang Goldwind (2208 HK): Positive Messages from Post-FY21 Call
- FY21 result of Xinjiang Goldwind (2208 HK) is healthy, though behind expectations due to impairments. We see them not recurrent into FY22, and this should be positive to earnings.
- Management sees some margin decline for WTG segment but the expectation of over 30% volume growth should offset the impact. Orderbook is secured at 16,874.4MW.
- Growth in power servicing is the bright sport with target revenue growth for 50%. Goldwind also plans to also add 0.5-1GW of generating capacity annually at wind farm development segment.
HDC Hyundai Development: Permanent Business License Cancellation or Temporary Business Suspension?
- On 28 January, the government (Ministry of Land, Infrastructure and Transport) announced that it has recommended the heaviest punishment of the cancellation of the construction license for HDC Hyundai Development.
- Seoul city government said it will make a decision on the fate of HDC Hyundai Development within six months.
- Rather than a complete, permanent cancellation of the company’s business license, a more likely scenario is about 6 to 12 months of temporary business operation suspension, in our view.
Before it’s here, it’s on Smartkarma
