Hyflux: (S$0.565) LOI for US$500m EPC contract in Egypt
Hyflux signed a letter of intent for a turnkey EPC contract for an integrated water and power project in Egypt valued at US$500m.
The project to build a desalination plant to produce 150,000 cubic metres of water per day, with on-site 457MW combined cycle gas turbine power plant.
Upon finalisation of contract terms, construction is slated to commence construction and is expected to boost Hyflux's FY16 financials.
Subsequently, the group will operate and maintain the plant for a 25-year period.
At the current price, Hyflux is valued at 1x P/B compared to its 5-year historical average of 2x. Bloomberg consensus has 2 Hold ratings with an average TP of $0.54.