Hyflux backs out from two water projects in China

Management may have a better plan.

According to OCBC Investment Research, Hyflux said it has withdrawn from two water projects from the Hechuan Industrial Park in Chongqing City due to a foreseeable low off-take volume of water. 

Nevertheless, Hyflux intends to focus on opportunities in growth areas in China like the Yunnan province; and also working on securing projects in the Indian states of Gujarat, Tamil Nadu, Karnataka and Andhra Pradesh.

It adds that selective markets in MENA have started to revive development plans to improve their water scarcity situation.

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Outlook may still be muted. While the company continues to show a relatively healthy order book of S$2731m, we note that the portion of EPC orders have fallen from S$1025m at Dec 2012 to S$792m at Jun 2013, while the treatment orders remain relatively flat at S$1939m (versus S$1872m).