Nomura raised its target price for Singamas Container (Hong Kong stoack code 00716) to HK$2.3 from HK$2, and upgraded the stock to “buy” from “neutral”. The research house forecast the industry box production of 2.7mn TEUs in 2013, and that Singamas will produce a total of 626,096 TEUs of boxes, implying an increase in market share from 19% in 2011 to 22%. The anticipated increase in market share will mainly come on completion by end-2012 of the Qidong factory, where Nomura estimated annual capacity will rise to 1.1mn TEUs by end-2013 (from 850,000 TEUs in 2011). The sotkc rises 0.5% to HK$1.88.
Category Archive: November
Hong Kong Exchanges and Clearing Limited (HKEx) (Hong Kong Stock Code 0388) said it agreed to place 65.705 million new shares at HK$118 per share, representing a discount of about 5.45% to the closing price of HK$124.8. The placing shares represent about 5.71% of the enlarged issued share capital of HKEx. The estimated net proceeds of about HK$7.71 billion (HK$7.7501 = US$1) will be used to partly fund the acquisition of The London Metal Exchange Limited. Upon completion, interest of the Government of the Hong Kong SAR will be diluted to 5.47% from 5.8%. Completion of the placing is expected to take place on 7 December 2012.
HK Exchanges drops 0.96% to HK$123.60 at midday, underperforming the HSI’s 0.6% rise, after the bourse operator says it’s raising around $1 billion in a placement priced at a 5.4% discount to its last closing level. While the share placement comes widely-expected and will likely add near-term pressure on the stock, the good news is that HKEx got the green light from U.K. regulators for its $2.2 billion acquisition of the London Metal Exchange. The share sale is targeted at helping fund that purchase. HKEx hopes to expand into commodities trading through the LME deal, which will help the company diversify away from its core equities business, which is under pressure on a lack of new listings, and as stock market turnover remains weak due to the global economic downturn. Thus, the successful LME acquisition will likely limit further declines in HKEx’s stock.
Daiwa believes HKEx’s share placement should clear the possible debt burden for the bourse operator, as the funds raised would pay for a large chunk of the US$2.2 billion London Metals Exchange purchase price. However, the house cuts its six-month target price for the stock slightly to HK$137.70 from HK$139.20 to factor in “modest” earnings-per-share dilution from the share placement. Still, the house keeps an Outperform call for the stock.
Evergrande Real Estate (Hong Kong Stock Code 3333) surges 6.1% to HK$3.81. Moody said it has revised Evergrande’s ratings outlook to Stable from Negative. Evergrande announced higher sales target for 2013. The increase in sales target was attributable to the recent upbeat in property sales and restored confidence of buyers.Yesterday both Beijing and Shanghai set new records in land price at more than CNY30.000 per square meter.
Geely Auto Plunges 2.24% On Convertible Bonds Conversion And Warrant Exercise; Overhang Removed, Says JPM
Geely Automobile (Hong Kong Stock Code 0175) fell 2.24% to HK$3.50 at midday, bucking the HSI’s 1% rise. The auto maker said it received conversion notices from Goldman Sachs Capital Partners VI Fund L.P. and/or its affiliates (investors) for partial conversion of convertible bonds in the principal amount of about Rmb770 million. Geely Auto allotted and issued a total of about 470 million conversion shares to the investors at the conversion price of HK$1.8583 per share today. The shares represent about 5.9% of the enlarged issued share capital of Geely Auto. After the conversion of the bonds, Geely Auto has bonds outstanding with a principal amount of about Rmb901 million. Geely Auto also received notices from the investors for the full exercise of the warrants. The company allotted and issued a total of about 300 million shares at the exercise price of Rmb1.9816 per share today and received proceeds of around Rmb593.5 million. The shares represent about 3.8% of the enlarged issued share capital of Geely Auto. Upon completion, the investors hold about 9.32% stake in Geely Auto.
JP Morgan says technically, the overhang on Geely’s share has partially been removed by Goldman’s disposal, and fundamentally, Geely is its top pick in Chinese auto sector. It keeps its Overweight rating on Geely with a price target of HK$6.00, based on 14X FY13 P/E, as “we believe Geely will be re-rated along with consensus earnings upgrades and multiple expansion.”
Credit Suisse expects the final stake from the Carlyle Group to be removed soon (given the current share price is just 2% below the previous sell-down price) for China Pacific Insurance (Hong Kong Stock Code 2601), which should remove some of the overhang discount currently in the stock. It highlights the current stock price trades 25% discount to China Life (2628), despite a superior growth profile, noting that momentum in the last two months has picked up (including importantly in higher margin new product launched), whilst China Life’s momentum has slowed, and is likely to remain weak for the rest of 4Q12. The house keeps China Pacific Insurance at Outperform with an unchanged target price of HK$34.
Great Wall Motor (Hong Kong Stock Code 2333) bucks HSI’s 0.9% drop, rises 2.27% to HK$24.75. JP Morgan bought 900,000 Great Wall Motor H-shares, increasing its stake to 15.04%. Its A-share also rises 2.4% to CNY17.75.