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Pocket The Dividends And Then Cash Out Of Hyflux?
Tradeable, Tradeable Ideas | 28 April 2014
Related stocks:
600
By: Lim Si Jie
Articles (169) Profile
  • Hyflux is expecting a slower first half in 2014 as well due to works being completed and the timing of projects.
  • Hyflux’s current P/E ratio is at a whopping 50.78. It is almost three times the industry P/E ratio (16).
  • RSI has recently crossed the upward trendline to signal a downward movement in prices.

Company Profile & Business Model

Hyflux is a fully-integrated water solutions company that produces water that is clean, safe, affordable and accessible. Its projects and operations span across the globe, and include projects such as seawater reverse osmosis desalination plants in Singapore, China and Algeria.

Hyflux offers sustainable solutions in the areas of membrane-based desalination, water recycling, wastewater treatment, including membrane bioreactor (MBR) technology, and potable water treatment.

Corporate Focus

The company is focusing more on actively bidding for projects in the Middle East and Africa beyond its established markets in Asia and Algeria. The outlook for the global water industry has improved and more water infrastructure projects are being made available for public tenders.

Hyflux Annual Report

Hyflux’s 2013 profit fell 28 percent because of the timing of projects finished during the year. Hyflux is expecting a slower first half in 2014 as well due to works being completed and the timing of projects.

Hyflux’s current P/E ratio is at a whopping 50.78. It is almost three times the industry P/E ratio (16). There are investors who believe in growth stocks with high P/E ratio might want to consider the fact that Hyflux has a PEG of 22.6. According to this, it is not all that attractive afterall.

Technical Analysis

Hyflux’s RSI was on an upward trend since middle of January. However, the RSI has recently crossed the upward trendline to signal a downward movement in prices. Hyflux share price has also followed suit as prices fell from its resistance level at $1.26.

Conclusion

Despite having an improved outlook in the sector, technical indicators as well as fundamental indicators do not give me enough confidence to put my money into Hyflux.

Investors who are invested might want to take advantage of the high valuation and exit the market. This is particularly so considering the Fed is likely to hike interest rates in 2015. The hike is expected to take a huge chunk of dollars from equity valuations.

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Si Jie is no stranger to investing having started his journey at a young age. He is heavily influenced by acclaimed investors such as Benjamin Graham, Peter Lynch, and John Rothchild.

Please click here for more information about this author.

Hyflux  -- -- --   
Business: Provides integrated water management & environmental solutions. [FY17 Turnover] Municipal (82.5%), industrial (16%), others (1.5%).

Insight: Mar-19, 9M18 revenue sank 75% due to lower enginee... Read More


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