Hyflux bent on capturing China market by 2014

The utility company aims to derive 40% of its total revenue from Asia's largest economy as the Chinese government gears to double its spending on water conservancy projects.

China, according to official reports, intends to ramp up its annual investment from US$30.4bln in 2010 to US$60.8bln this year and then sustain it at that level annually for the next 10 years.

Hyflux is said it will focus on capturing the China market in the next three years, and is “confident” of its prospects given its track record in previous projects undertaken in the mainland.

The water services company sees Southeast Asia contributing 30% of its total revenues by 2014 and the remaining 30% from other regions ike Australia and South Africa.

Hyflux disclosed Thursday that its current order book remains relatively close to the S$2.2bln figure announced in April during the launch of its 6% CPS (cumulative preference share) issue, which consists of around S$1.27bln of EPC contracts and S$955mln of O&M contracts.

With its net gearing reduced from 0.8 at the end of March to an estimated 0.5 due to the upsizing of its CPS from S$200m to S$400mln, the utility company said it is now in a more competitive position to take on bigger projects, especially in China.