Hyflux

Hyflux: FY2010 results best in co's history, beating consensus est with rev at $569.7m +8.6%yoy, profit at $88.5m +18.1%yoy. 4Q was strong, rev of $190.5m and profit of $88.9m making out more than a third of FY2010 figures. Revenue was mainly from the municipal sector contributing 90% of rev for 31 Dec 2010…

Middle East made up approx 60% of total rev and China approx 26%. Contributions from Sg (14% of rev) were also boosted due to a desalination project and a membrane bioreactor plant in Jurong. Co's order book slightly lower than last yr but still healthy at $1.6b with O&M projects of $1.0b and EPC proj of $0.6b.However, net gearing increased to a high of approx 73%...

Co has positive outlook expecting more projects due to scarcity in key mkts of China, MENA and SEA. Co expects some delays in US$100m projects in Tobruk, Libya (plant size 40k m3)and desalination project negotiations in Bengazhi (400k m3)and Tripoli (500k m3) to face potential delays. Two desalination projects in Algeria (total of 700k m3) have progressed as scheduled and near completion...

StanChart downgrades from Outperform to In-line with TP$2.15 due to situation in Middle East and advises to wait for better entry pts. Dividend of 3.5c declared, approx yield of 1.8% with current P/E at 19.4x