Hyflux

Hyflux: Low side of estimates. FY11 rev at $482.0m -15.4% yoy, net profit at $55.7m -37.3% yoy. Low revenue was due to near completion of projects in Middle East North Africa (MENA) and the impact of the Arab Spring but partially offset by contributions from the Tuaspring desalination plant project.

Geographically, Sg and other regions contributed approx 47% of rev, China with 29% share and MENA with 24% share.

Co has guided that the outlook is challenging with higher costs for foreign labour locally and economic problems in Europe and US to affect Asia and China. Net EPC orderbook stands at $931m largely due to the Tuaspring project. Included in the orderbook are expansion of 5 plants of which co is building for its 50/50 JV with Mitsui, under Galaxy NewSpring. Mgmt is expecting an additional 5 plants reaching 80-90% utilization lvls to be selected for expansion this yr which will further add to EPC orderbook.

A dividend of 2.1c has been declared, a drop from prev yr’s 3.5c.

Nomura maintains Reduce at TP$1.00 JPM maintains Neutral with TP$1.60