HANNY Magnetics (Holdings) is one of the few Hong Kong manufacturing companies with an internationally recognised brand name, yet it trades on a price-earnings multiple more suited to a third-line original equipment manufacturer (OEM).
Given the present overseas interest in quality Hong Kong stocks, Hanny looks ripe for a rerating.
The company was listed in December 1991 as a manufacturer of floppy disks under the Dysan brand name.
The listing price was $1.20, and at yesterday's closing price of $1.69 it can hardly be said to have participated in the recent market surge.
The company has faced two primary problems: anti-dumping legislation from Europe and delays in construction of new manufacturing facilities in Beijing.
The former has forced it to diversify its manufacturing base away from low-cost China, while the latter has limited its ability to participate in the booming demand for 3.5-inch floppy disks. Earnings growth, however, will remain strong.