Xingquan International – Happy feet. (CIMB)

Xingquan’s down-at-heel valuations suggest that the market does not anticipate or is dismissing its strong interims. Ex cash, it is trading below 1x P/E, a huge discount to the 7-8x P/Es of its HK peers. We continue to hold the view that it may vote with its feet and go private. At 108% of our forecast, annualised 1HFY6/12 core net profit was within expectations as we expect a tougher 2H due to cost pressure. Cheap ratings and the buyout possibility underpin our Outperform rating. We continue to value it at RM1.47, on the basis of 1x P/BV.