Hyflux poised for expansion in China

After its subsidiary grabbed two big-time deals.

According to OCBC Investment Research, 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. 

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The MOUs cover projects like the development of water recycling, wastewater treatment plants and potable water treatment plants using Hyflux’s
advanced Kristal® ultrafiltration membrane technology.

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. And these projects are certainly not small - management estimates the total investment value for the project in Qujing to be around RMB1.2b and Chuxiong to be less than RMB2b, where these could be developed by Hyflux and/or its potential partners.

And we remain hopeful that Hyflux can use the opportunity to expand its presence in Yunnan province. While Yunnan has an abundance of water, some studies suggest that nearly 70% of water samples across the province failed to meet water quality standards, with water pollution from human and animal fecal contamination remaining a key concern.