STOCKWATCH: HAECO flat after 2000 results

HONG KONG (AFX-ASIA) - Hong Kong Aircraft Engineering Co Ltd was flat after the company released its 2000 results, dealers said. At 11:10 am, HAECO was unchanged at 14.0 hkd on volume of 171,200 shares. The Hang Seng index was up 39.85 points at 14,360.90. The company reported 400.4 mln hkd in net profit for 2000 compared to 59.4 mln a year earlier. Mark Webb, an analyst with HSBC Securities, said earnings growth was primarily driven by cost cuts of some 195 mln hkd after a staff redundancy plan as well as contributions from the company's joint ventures including Taikoo (Xiamen) Aircraft Engineering Co Ltd (TAECO) and Hong Kong Aero Engine Services Ltd (HASEL). Looking ahead, Webb said he expects the company to maintain stable annual growth given the company's expansion of its facilities in China as well as its position as the sole provider of comprehensive aircraft maintenance at Hong Kong International Airport. Despite the positive outlooks, the company still has to resolve the issue of share liquidity in order to boost investor interest, he added. "Now the barrier to stop investors buying or analysts looking at the company is the liquidity issue -- despite the stock being so cheap," Webb said. He said he recommends a "buy" on the company, with fair value estimated at 22.0 hkd.

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