Thursday, April 26, 2018
Martin Hennecke

Keep tabs on Dah Sing Bank
Hong Kong and mainland stock markets, as expected, took a break yesterday ahead of a key meeting of the US Federal Reserve, and the upcoming October 1 Golden Week holidays.

The focus was squarely on Wing Hang Bank (0302), whose shares soared 39 percent following confirmation it was about to sell a controlling stake.

It is the second local medium-size bank that may change ownership this year. Of course, it is too late now to buy the stock, as it has already risen a lot.

You should have bought Chong Hing Bank (1111) when shares were just one-third of their current price.

The last possible takeover target could be Dah Sing Bank (2356). Its shares jumped 17 percent to HK$13.32 yesterday - still below the HK$19 peak reached in 2007.

It now trades at 1.08 times book value. Theoretically, there is upside of up to 1.9 times book value.

Dr Check does not think the owners of Dah Sing Bank will sell the lender.

But speculation over takeovers bodes well for such stocks. You could accumulate some Dah Sing shares for trading when they dip to HK$8. Dr Check and/or The Standard bear no responsibility for any investment decision made based on the views expressed in this column.

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