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SGX queries Hong Leong Asia's recent 16.8% share price climb

HONG Leong Asia Limited's recent climb in share price has prompted a query by the Singapore Exchange (SGX) on Wednesday.

In an SGX announcement, the local bourse has asked the trade and industry arm of Singapore conglomerate, Hong Leong Group, to explain the "unusual price movements" in its shares.

The SGX has also requested the company to immediately disclose any information that was previously not announced.

As at 3.06pm on Wednesday, the stock was trading at S$1.155. It closed trading at S$1.06 on Tuesday, which was also its closing price on Monday.

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For the period between Oct 2 and 24, the stock has risen by as much as 16.8 per cent. On Oct 2, Hong Long Asia's trading volume was about 1.03 million shares. As at Oct 24, trading volume stood at 1.08 million.

On Oct 20, CIMB initiated coverage on Hong Leong Asia's subsidiary, China Yuchai International, with an "add" recommendation. The broker set a target price of US$30.53 for the stock.

In the report, CIMB said that China Yuchai, which has two main businesses in engine manufacturing and hospitality operations and property development, looks "attractive" in terms of its robust financial position and cash-generating ability.

"China Yuchai is an undiscovered gem and laggard play on China's engine manufacturing upcycle, in our view," it said.

CIMB added that China Yuchai is also a potential beneficiary of recent policy changes and industrial development in China, such as the One Belt, One Road initiatives that underpin the longer-term growth of industrial and transport machinery.