SG: MARKET PULSE: Hyflux, ComfortDelgro, Midas (10 Apr 2013)

Stock Name: Hyflux
Company Name: HYFLUX LTD

Research House: OCBC

Price Call: HOLD

Target Price: 1.44

MARKET PULSE: Hyflux, ComfortDelgro, Midas

10 Apr 2013

KEY IDEA Hyflux: China back on radar screen Summary: Hyflux recently announced that its subsidiary - Hyflux Investment Consultancy and Management Service (Tianjin) Co - has signed two memoranda of understanding (MOUs) with the prefectural governments of Chuxiong and Qujing in Yunnan province to develop water and environmental projects in these two cities. Management estimates the project in Chuxiong to be less than RMB2b and Qujing to be ~RMB1.2b. While it is still early days yet, we view the MOUs as a positive development as it suggests that China is back on the radar screen. For now, we will maintain our HOLD rating and S$1.44 fair value on the stock; but we do see room for re-rating should these MOUs translate into actual contracts. (Carey Wong) MORE REPORTS ComfortDelGro: Now joint-second in London ComfortDelGro's acquisition of a portion of FirstGroup plc's London bus business for approximately S$109m will increase its London bus fleet significantly by 494 to 1,700, and bring its market position to joint-second alongside Arriva London with a market share of around 19% (previously 12%). In addition, its UK bus revenue and operating profit should increase by ~37% as a result (assuming FY12 figures). With the outlook for ComfortDelgro's overseas ventures in FY13 remaining positive, our focus shifts domestically where we expect a fare increase to materialise by mid-2Q13, which we feel much of the street has already priced in. Pending its upcoming 1Q13 results, we maintain our HOLDrating on ComfortDelgro with an unchanged fair value estimate of S$1.95. (Lim Siyi) Midas Holdings: Secures S$17.3m in orders for Singapore MRT train parts Midas Holdings announced last evening that it has secured S$17.3m (~CNY86.5m) worth of orders from longstanding customer Alstom Transport S.A. This entails the supply of train car body parts for 18 train sets (or 108 train cars) for Singapore's North East Line and 24 train sets (or 72 train cars) for the Circle Line. Delivery is scheduled to take place from 2013 to 2015.This is Midas' second international contract win of the year and helps to boost its total orders won YTD to ~CNY379m, already higher than the CNY325m in orders won for the whole of 2012. Given that the Singapore government has committed to spending ~S$1.75b from 2013 to 2019 to upgrade and purchase assets for its rail system, we believe that future contract wins for similar projects are possible for Midas. We retain our forecasts as we have already assumed such contract wins in our assumptions. Maintain BUY and S$0.595 fair value estimate on Midas, based on 1.2x FY13F P/B. (Wong Teck Ching Andy)

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