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The Hong Kong Roller Coaster Ride; $19b Lost In 1 Day
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By: Louis Kent Lee
Articles (199) Profile

I know. It’s the hottest thing right now. How can you not be in the know of how undervalued or how much money is flooding into the Hong Kong market right now yes?

However, like the saying goes, when something gets hyped up too much, some steam will eventually escape as part of a normalisation. Somewhat. You get my point.

On 20 May, we saw the mysterious 47 percent plunge in the share price of Hanergy Thin Film Power Group in just a matter of 24 minutes.

This represented some US$19 billion of market capitalisation erased, or in a better visualisation, the size of more than 2 Genting Singapore’s market capitalisation combined.

On 21 May, Goldin Financial Holdings and Goldin Properties Holdings, controlled by billionaire Pan Sutong, plunged more than 60 percent in Hong Kong trading.

Before this huge slide in share price, these 2 stocks have risen by more than 300 percent in 2015.

An interesting point to note is that prior to this sliding effect, the 2 Goldin companies traded at more than 130 times price earnings (PE), while Hanergy’s PE multiple was 65.

The Hang Seng Index is only valued at 11.7 times PE, marking the huge contrast in valuations.

In the Lion City, earnings season continues to move in full swing. Genting Singapore’s new Jurong hotel has commenced its soft opening.

The new hotel boasts 557 rooms and is situated near Jurong East MRT station, which will also be the terminus of the KL-Singapore High Speed Rail.

It is foreseeable that the additional rooms will drive visitation at its casino in Resorts World Sentosa.

Louis is a qualified accountant with the ACCA, and is the Research Editor at Shares Investment magazine.

Please click here for more information about this author.

Genting Singapore  0.875 -0.010 -1.13%   
Business: Develops, operates & mkts casinos & IRs globally, including Australia, M'sia, Philippines & UK. [FY18 Turnover] Gaming (66.1%), non-gaming (33.8%), others & invs (0.1%).

Insight: May-19, 1Q19, despite Co's non-gaming business reg... Read More

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