'Hyflux - SELL', read analyst report after Tuaspring project win announced, deduced it hinged on power sales - CNA
This was while deducing that the ... the new power plant in Hyflux's Tuaspring project would have to be sold to the grid to achieve its profit targets. This was revealed in court on Wednesday (Sep 10) by Hyflux founder Olivia Lum Ooi Lin's lawyer as he wrapped up his cross-examination of prosecution witness Winnifred Heap Ah Lan, who headed corporate communications for Hyflux at the time the company was bidding for the PUB tender in 2010 and 2011. The Indian analyst's report is significant ... This was while deducing that the bulk of the electricity generated by the new power plant in Hyflux's Tuaspring project would have to be sold to the grid to achieve its profit targets. This was revealed in court on Wednesday (Sep 10) by Hyflux founder Olivia Lum Ooi Lin's lawyer as he wrapped up his cross-examination of prosecution witness Winnifred Heap Ah Lan, who headed corporate communications for Hyflux at the time the company was bidding for the PUB tender in 2010 and 2011. The Indian analyst's report is significant as it potentially shows that at least one analyst was aware of the importance of the electricity sales to the profitability of the project.The fact that it was venturing into the electricity business for the first time, with accompanying risks, was allegedly not disclosed to the public, and the company eventually entered liquidation after suffering massive losses on the back of a weak power market. Senior Counsel Davinder Singh on Wednesday took Ms Heap through various analyst reports.The report went on to say that an estimated 87 per cent of the power plant's capacity – or 358MW of the 411MW – would be available for merchant sale, and that Hyflux would have to sell at least 65 per cent of this excess power capacity into the grid to achieve its profit targets for the project.She added that she had highlighted to the analyst that "power is an expansion of our water strategy and very integral" and therefore "should not be viewed in isolation". Mr Singh took Ms Heap through other analyst reports that recommended "buy" for Hyflux stock, including reports from DBS Group Research Equity and Kim Eng.
