The Straits Times / The Business Times News on Hyflux

Hyflux surges 4.3% but rival stocks languish

HYFLUX, darling of Singapore's homegrown water technology industry, saw its stock price rise 4.3 per cent, to $2.93, after National Research Foundation (NRF) chairman Tony Tan on Tuesday raised the possibility of $1 billion being spent to develop environmental and water technologies over the next five years.

But analysts doubt that Dr Tan's comments were the immediate cause of the 12 cent rise in the Hyflux stock price.

One analyst, for example, felt that the movement on Hyflux reflected the case that 'the market on the whole is robust'. With respect to the NRF's plans, 'there will be no immediate impact on the stock, in terms of increased opportunities', the analyst said.

Although 'companies like Hyflux probably benefit in terms of getting more grants', as 'they will try to develop technology and then look at applications that will bring more business', Hyflux itself 'has already been receiving government grants', the analyst said.

A second analyst said he viewed the stock as 'still expensive'.

'The market has been very active these last few days. The television last night was showing that Singapore aims to develop environmental and water technologies,' he said, attributing the movement to 'industry momentum'.

'We will know the real fundamentals only when their financial results come out, or when real plans on how to develop water technology are laid out by the government,' he said.

Further, he said that as the government funding is 'only for R&D in technology, it will flow more to research institutes. The earnings kicker for companies is not so obvious.'

A third analyst said it is possible that 'some people know Hyflux is going ahead with the Harbin project'.

In May, Hyflux signed an agreement with Harbin City in China to conduct a feasibility study for a 3.5 billion yuan (S$713 million) project. 'They said it would take about six months to decide. The timing is about just right,' said the analyst.

While Hyflux's shares gained ground, those of other water technology companies did not.

Sinomem Technology rose one cent to 72 cents, while China-based Bio-Treat Technology fell by 2 cents to $1.12. Darco Water Technology rose half a cent to 30.5 cents, and Asia Environment was unchanged.