OCBC Investment Research has raised its target price for Singapore water firm Hyflux (HYFL.SI) to $2.70 from $2.44 and kept its “buy” rating.
OCBC has raised its 2011 revenue and earnings estimates for Hyflux by 3 and 6.7% respectively, as it expects the firm to secure more contracts in China.
Hyflux (600.SG) +3.0% at $2.41, vs STI +0.1% with just over half its 50-day average volume traded already, after the water treatment firm says it won deals to develop 3 water projects at Hechuan Industrial Park in Chongqing City, China.
Hyflux will invest around US$45 million ($58.3 million) in 3 BOT (Built-Own-Transfer) projects, which it will fund via internal resources and will operate the plants (2 wastewater treatment and 1 potable water treatment) over a 30-year concession period.
The following companies may have unusual price changes in Singapore trading today. Stock symbols are in parentheses, and share prices are from the previous close. Singapore’s Straits Times Index gained 0.4% to 3,241.49.
CapitaCommercial Trust (CCT SP): The office landlord partly owned by CapitaLand (CAPL SP) had its stock rating lowered to “underweight” from “neutral” at JPMorgan Chase & Co. The shares lost 0.7% to $1.50.
Singapore shares may climb higher on Wednesday after modest gains on Wall Street overnight. Energy firms may outperform the market as US oil prices jumped 2% on the back of supply concerns. Singapore’s benchmark Straits Times Index <.FTSTI> rose 0.38% on Tuesday to 3,241.49 points.
Here are some stocks and factors to watch:
Singapore water firm Hyflux (HYFL.SI) said on Tuesday it has signed three concession agreements with the government of China’s Chongqing City to develop three water projects in the city’s Hechuan Industrial Park.
Hyflux will invest approximately US$45 million ($58.3 million) in these three Build-Own-Transfer projects and maintain the plants over a concession period of 30 years, the firm said in a statement to the Singapore Exchange.
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Hyflux (600.SG) off 0.3% at $3.28, in line with weak broader market, with ews of company winning US$100 million ($129.8 million) EPC contract to build 40,000 cubic metres/day desalination plant in Libya with three-year operations, maintenance deal, not doing much to generate interest in stock; moderate 367,000 shares traded, says Dow Jones.
Mainboard-listed Hyflux has been awarded a contract worth about US$100 million ($129.7 million) to carry out engineering, procurement and construction (EPC) works for a seawater desalination plant at Tobruk in northeastern Libya. The project is the first in the country for Hyflux.
DBS Vickers Securities in a Nov 8 research report says: “Hyflux’s 3Q10 profit after tax and minority interest (PATMI) of $19 million (+5% y-o-y) met consensus ($25 million) if excluding $7.9 million of forex losses but trumped our estimate of $14 million because of an earlier than expected rebound in China industrial projects that were put on hold during last year’s crisis.
Hyflux (600.SG) remains buoyant, +5.0% at $3.34 with 4.5 million shares traded, highest volume since mid-June, after management proposes 1-for-2 bonus issue; Nomura says issue to increase liquidity of shares, with 285,378,205 bonus shares expected, subject to SGX-ST approval, says impact on stock is neutral.
House keeps Neutral rating, lowers target to $3.50 (previous no stated), remains concerned about Hyflux’s EPC orderbook, which fell 15% on half as of June 2010 to $633 million.
“With the expected construction completion of the Algeria Magtaa project by the end of 2011 and the delay in obtaining the Libya desalination projects, we are concerned over whether Hyflux can maintain its revenue momentum.”
But adds, upside risks could come from Hyflux winning Singapore desalination project. Says 3Q results in line, keeps estimates unchanged.
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Shares of Singapore water treatment firm Hyflux <HYFL.SI> rose as much as 5.7% on Monday after it reported strong third quarter earnings and announced a bonus issue for shareholders, says Thomson Reuters.
At 9:13 a.m., Hyflux shares were traded at $3.37 with over 1.7 million shares changing hands. Hyflux said on Thursday its third quarter net profit rose 5% to $19 million from a year earlier, helped by higher sales from municipal and industrial sectors.
It also proposed to issue one bonus share for every two existing shares to reward shareholders.
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Singapore shares may rise slightly on Monday after stocks on Wall Street recorded modest gains amid stronger-than-expected US jobs data. The Straits Times Index rose 0.5% to 3,240.31 on Nov. 4. The following companies may have unusual price changes in trading today. Share prices are from the previous close. The market was closed for a public holiday on Nov. 5. Here are some stocks to watch, say Bloomberg and Thomson Reuters.
Mainboard-listed Hyflux today announced a net profit attributable to shareholders for the third quarter of FY2010 of $19 million against revenue of $137.5 million.
The net profit for the third quarter of FY2010 was 5% higher than that achieved in the third quarter of FY2009, while group revenue was an increase of 9%. The weakening US dollar against the Singapore dollar led to an unrealized foreign exchange loss for the group which amounted to $7.9 million.
Oon Jin Teik has been appointed group executive VP wef Jan 1, 2011
Work experience: CEO, Singapore Sports Council; head, customer solution & Innovation (Asia Pacific), National Starch & Chemical
Expects sustainable earnings stream as water treatment firm’s build-operate-transfer projects in China gradually commencing operations, ramping up.
Hyflux (600.SG), Sembcorp Industries (U96.SG) well placed to capitalise on growing global demand for water, with 37% of world’s population estimated to face absolute water stress by 2020, says Credit Suisse, according to Dow Jones.
Research house tips global desalination, water recycling capacity to increase at 10% CAGR over next 5 years, with incremental investments of more than US$70 billion ($95 billion).
Hyflux (600.SG) +1.6% at $3.18 after reporting modest 2Q10 earnings growth, but interest subdued as volume thin, says Dow Jones.
Analysts generally still hopeful of water treatment firm’s prospects, despite delay in plans to build 2 desalination plants in Libya (projects yet to be finalized despite being announced last year).
The following companies may have unusual price changes in Singapore trading today. Share prices are from the previous close. Singapore’s Straits Times Index gained 0.2% to 3,006.76.
Hyflux (HYF SP): Singapore’s biggest water treatment services provider said second-quarter profit rose 5% to $27.3 million from a year earlier. Hyflux declined 2.2% to $3.13.
DBS Vickers Securities in an Aug 3 research report says: “Hyflux today announced – as part of the “Galaxy JV“ formed with Mitsui & Co to pursue growth in China’s water sector – the intention to make an exit offer and acquire 100% of the shares of Hyflux Water Trust, and delist it thereafter.
