INVESTORS pounced on shares of HanKore Environment Tech Group yesterday after the water-treatment technology firm unveiled on Monday its plans for a reverse takeover deal with China Everbright Water Investments (CEWI).
HanKore shares were up 36 per cent in intra-day trade yesterday, touching a high of 10.9 cents. The counter was the most actively traded, with 780.7 million shares changing hands.
It closed the day at 10.8 cents apiece, up 2.8 cents or 35 per cent.
Placement Share is S$0.05.
Consideration share is S$0.0703 for the acquisition.
Stock price started to rise after the placement from S$0.05 and continued to rise further with the water theme in China, then finally the latest acquisition to S$0.108 currently.
Currently the RSI is showing overbought for Hankore, SIIC, Vallianz, Charisma, otto marine. Not sure how long the overbought situation will last but correction will come eventually.
There is a 10 into 1 share consolidation coming very soon for Hankore. If we take S$0.108 before consolidation, the consolidated share will be $1.08 which is more expensive than SIIC (S$0.183) or United Envirotech (S$0.905) and near to Hyflux (S$1.17).
CIMB ---> Add while awaiting clarity over CEI Deal
We understand from management that both parties are still actively pushing for the deal and the recent stake purchase by the second largest shareholder,
Alan Wang, also bolstered the market’s confidence. We include a scenario
analysis on the possible outcomes of the CEI deal. Our target price of S$0.125 is
based on the scenario that HanKore acquires CEI’s water assets at 1.3x trailing
NAV.
The company could be worth S$0.148 if the CEI assets are acquired at 1.0x trailing NAV, while our target price falls to S$0.091 if the deal is called off.
It has to be this week: announcement of deal or no deal for injection of China Everbright assets. market sentiment is leaning towards a positive outcome.
