Hyflux

Hyflux: On 19 Dec 2014 , it received a letter of award (LOA) to design, build, own and operate an independent water project (IWP) in Qurayyat, Oman, for an estimated US$250m. The EPC portion of the project is worth about US$210m, while the O&M bit is worth about US$40m. However, Hyflux did not give a start date for the construction, as the award is still contingent upon satisfying certain conditions precedent (but these are not mentioned in the announcement). As such, the company does not expect the project to have a material impact on its FY14 results. OCBC believes the bulk of the contract value is likely to be recognized in FY16. Although share price has recovered 19% from a recent intra-day low of $0.71, the house sees limited upside from here, given a likely slow 4Q14 showing (and possibly even 1Q15). OCBC maintains Sell with TP $0.75