Singapore's Hyflux up on business trust plans, Credit Suisse keeps 'outperform'
10/12/2007 2:15:00 PM
SINGAPORE (Thomson Financial) - Shares in Hyflux Ltd were higher Friday, bucking the broader market decline on news the water utility company intends to list a business trust on the Singapore exchange by the end of the year.
Hyflux yesterday said Hyflux Water Trust (HWT) will have an initial portfolio of 13 water treatment facilities in China, with a pipeline of 12 more water-related infrastructure assets to be injected in 2008 and 2009.
The company has not disclosed the valuations of the assets and the size of the initial public offering.
Hyflux will hold at least a 25 percent stake in HWT for two years after listing and will also help HWT meet its projected distributions for 2008 and 2009.
"With its stake in HWT, Hyflux would receive the recurring income streams generated from distributable income from HWT and receive other long-term recurring fee income streams," Credit Suisse said in a client note.
"Clearly, this is one of the key catalysts (for growth) we have highlighted ...and this is happening much earlier than expected," it said.
Credit Suisse is keeping its "outperform" rating on Hyflux with a target price of 4.00 Singapore dollars per share. The current target price does not include the potential impact from the water trust, it said.
At 2.08 pm (0608 GMT), Hyflux was up 6 cents or 1.7 percent at 3.54 Singapore dollars with 2.2 million shares traded.
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