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kalasala 24-05-2016 01:32 PM

those company that issue bond either cannot get banks funding or bank rates are much higher than the cost of bond issuance which is very hefty...If a company make good $$$, they will declare dividends and not issue bonds. hahaha


Read the risk and invest with care.

kalasala 24-05-2016 02:17 PM

Some risks are highlighted below in the prospectus

currencies of which the Group collects revenues against the
currencies in which the Groupís expenses are denominated may cause the Group to incur foreign exchange losses.

The Group also records its financial results in Singapore dollars.

Any fluctuations in currency exchange rates will also result in exchange gains and losses arising from transactions carried out in foreign currencies as well as translations of foreign currency monetary assets and liabilities as at the various balance sheet dates. The Group may be subject to restrictions of repatriation of funds.

The Group may be subject to foreign exchange and/or capital controls that may adversely affect the ability to repatriate income or capital located outside of Singapore. Repatriation of income and capital may require the consent of the relevant governments

Delays in or refusals to grant any such approval, revocations or variations of consents previously granted, or the imposition of new restrictions may adversely affect the Groupís business, results of operations and financial condition.

The Group faces increasing competition in its key markets.
The Groupís businesses compete with both domestic and international companies with respect to factors such as location, facilities, supporting infrastructure, services and pricing. Intensified competition may result in increased costs for land, materials, overheads and increased delays in
the approval process for new projects by the relevant government/municipal authorities, all of which may adversely affect the Groupís business. Some of the competing companies have significant financial resources, marketing and other
capabilities. Domestic companies in the overseas markets have extensive knowledge of the local networks and relationships in their respective domestic markets. International companies are able to capitalise on their overseas experience and greater financial resources to compete in the markets in which the Group has an overseas presence. As a result, there can be no assurance that the Group will be able to compete successfully in the future against its existing or potential competitors or that increased competition with respect to the Groupís activities may not have a material adverse effect on the Groupís business, results of operations and financial condition.

Certain construction and management risks may arise within
the Groupís projects. A segment of the Groupís business is project-based, and good project management, procurement
of materials and allocation of resources are important factors for the successful completion of projects.The cost of materials is a significant component of the Groupís expenditure. An example is steel, which is one of the key materials for the Groupís water-related projects.

The Group may not be able to fully pass on the cost of such materials to its customers and any increase in the cost of
such raw materials could have a material adverse effect on the Groupís financial condition and results of operations. The construction and development of projects also entail significant risks, including shortages of materials or skilled labour, unforeseen engineering, environmental or geological problems, work stoppages, litigation, weather interference, floods and unforeseen cost increases, any of which could give rise to delayed completions or cost overruns. Difficulties in obtaining any requisite licences, permits, allocations or authorisations from regulatory authorities could also increase the cost, or delay the construction or opening of, new projects.

All of the above factors may affect the Groupís business, results of operations and financial condition. 29 track record in the specific fields, and/or the possession of various licences and permits. In the event that the Group does not secure adequate new projects, this may have an adverse effect on the Groupís business, results of operations and financial condition and prospects. The collection, treatment and disposal of wastewater create risks different, in some respects, from the Groupís water utility operations.The wastewater collection, treatment and disposal operations of the Group providing water and wastewater services are subject to substantial regulation
and involve significant environmental risks. If collection or sewage systems fail, overflow or do not operate properly, untreated wastewater or other contaminants could spill onto nearby properties or into nearby streams and rivers, causing damage to persons or property, injury to aquatic life and economic damages, which may not be recoverable in fees.
This risk is most acute during periods of substantial rainfall or flooding, which are the main causes of sewer overflow and system failure. Liabilities resulting from such damage could adversely and materially affect the Groupís business, results of operations and financial condition. In the event that the Group is deemed liable for any damage caused by overflow, its losses might not be covered by insurance policies or it may be difficult to secure insurance for this business in the future at acceptable rates. The Group is subject to risks associated with technological
and regulatory changes. A part of the Groupís businesses involves the manufacture of filtration membranes. As a result, the Group is exposed to changes in technology such as the development of water treatment processes and filtration membranes, regulatory requirements from the United States Food and Drug Administration and the European Unionís Directive on the Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment 2002/95/EC, as well as applicable standards and certifications from entities such as NSF International (formerly known as National
Sanitation Foundation) and the ISO. Any changes in legislative, regulatory or industrial requirements may render certain of the Groupís purification and filtration products and processes
obsolete. Acceptance of new products may also be affected by
the adoption of new government regulations requiring stricter standards. For example, if a new government regulation requires industrial water discharge to be of a higher standard, and should the Groupís water treatment plants not be able to meet such a standard, the Groupís performance may be adversely affected.

The Groupís ability to anticipate changes in technology and
regulatory standards and to develop and introduce new and enhanced products successfully on a timely basis will be a significant factor in the Groupís ability to grow and to remain competitive. There can be no assurance that the Group will be able to achieve the technological advances that may be necessary for it to remain competitive or that the Groupís products will not become obsolete. In addition, the Group
is subject to risks generally associated with new product introductions and applications, including the lack of market acceptance, delays in development or failure of products to operate properly.

The Groupís customers are subject to environmental laws and
regulations of the countries in which they operate and they may seek recourse from the Group should there be any
violation. The environmental laws and regulations of the countries in which the Group supports its clients require the Groupís customers to meet certain standards and impose liability if these are not met. Though the Group is not directly regulated by these environmental laws and regulations, there is
no assurance that the Groupís customers or the relevant authorities will not seek recourse from it in the event of non-compliance with such laws and regulations, even if the Groupís plants were commissioned and tested to be in compliance with the then-existing standards at the point of
handing over to its customers.

31.

In addition, the liabilities and risks imposed on the Groupís customers by environmental laws may adversely impact demand for some of the Groupís products or services or impose greater liabilities and risks on it, which could also have an adverse effect on the Groupís competitive and financial
position.
The Group may not be able to protect its processes, technologies and systems against claims by other parties.
The Group has developed designs and applications of its membranes, membrane modules and membrane systems in various industries such as electronics, pharmaceutical and food and beverage. Such applications were the result of the Groupís R&D efforts. The Group has applied for relevant patents and trademarks and/or obtained licences for the use of relevant patents in respect of such designs and applications. The Group will continue to apply for patents as and when the Group determines that it is feasible to do so, based on the results of the Groupís R&D. The Group has also obtained licences from other patent owners for the use, manufacture,
marketing and/or sub-licensing of patented products and processes. Meanwhile, the Group will not have any legal recourse for the designs and applications which are not patented in the event that such solutions are successfully replicated by third parties. In the event that the applications are replicated, the Group may lose its competitive edge and the
Groupís turnover and profitability on these applications may be adversely affected. Furthermore, third parties may subsequently assert claims to certain applications. In such an
event, the Group may need to acquire licences to, or to contest the validity of, issued or pending patents or claims of third parties. There can be no assurance that any license acquired under such patents would be made available to the Group on acceptable terms, if at all, or that the Group would prevail in any such contest. In addition, the Group could incur substantial costs in defending itself in lawsuits brought against the Group for alleged infringement of another partyís patents. The Group relies on trade secrets, proprietary know-how and technology, which it seeks to protect, in part, by confidentiality
agreements with the Groupís prospective working partners and collaborators, employees and consultants.
There can be no assurance that these agreements will not be breached, that the Group will have adequate remedies for any breach, or that the Groupís trade secrets and proprietary know-how will not otherwise become known or be independently discovered by others.

The Issuer and its subsidiaries are dependent on key personnel and the availability of skilled engineers.
The Issuer and its subsidiaries are dependent on the continuous efforts of its senior management, in particular, Ms Olivia Lum, Executive Chairman & Group Chief Executive Officer, Ms Lim Suat Wah, Group Executive Vice President & Group Chief Financial Officer, Mr Wong Lup Wai, Group Executive Vice President & Group Chief Operating Officer, Mr Lim Swee Kwang, Group Executive Vice President, and Mr Cheong Aik Hock, Group Executive Vice President. The loss of the services of any one or more of these senior managers may have a n adverse effect on the Issuerís and/or its subsidiariesí ability to achieve its objectives.

Owing to the specialised nature of the Groupís business activities, there is a limited supply of skilled engineers. To the extent that the Group is unable to recruit and/or retain the required number of skilled engineers to meet the expected increase in both production and R&D, its turnover and profitability could be negatively affected.

32
The Group may encounter risks associated with its conduct of
business in the MEA region and the PRC. As the Group derives a substantial portion of its revenue from the MEA region and the PRC, it faces risks associated with the conduct of business in the countries in the MEA region and the PRC.
The Group recognises that although the existing infrastructure and the financial and legal systems of the countries in the MEA region and the PRC have developed in line with the growth in their respective economies and industrial progress, such systems may not be as developed as those of other nations. The limitations in the infrastructure and the financial and legal systems could limit the growth rate that the Issuer and its subsidiaries could enjoy in these countries. Furthermore, any significant change in the existing laws and regulations of the countries in the MEA region and/or the PRC may adversely affect the Group. The Groupís business and operations
in these countries are governed by their respective legal systems, and any change in the existing laws, regulations and legal system of these countries could require the Group to modify the way it conducts its business in these countries. This may also result in increased costs (including cost incurred to comply with any change in laws or regulations), as well as delays in the obtaining of licences and approvals from the relevant regulators.The Groupís experience in the implementation, interpretation and enforcement of the laws and
regulations of, and commercial contracts, undertakings and commitments entered into in some of the countries in the MEA region and the PRC may also be limited. An application for approval to conduct certain activities in a country in the MEA region and /or the PRC may also be unduly protracted with the involvement of several government agencies, or the enforcement of laws and regulations and the outcome of a dispute resolution may not be as predictable as in more
developed jurisdictions. The Groupís business and operations and hence, the Issuerís financial performance, may be adversely affected by these delays.

The Group is also subject to foreign exchange controls in some of the countries in the MEA region and the PRC, which may limit the Groupís ability to utilise its revenue effectively. In addition, the Issuerís subsidiaries in these regions are subject to relevant rules and regulations relating to currency conversion.
Water-related infrastructure businesses are often regulated. The Groupís businesses are subject to the applicable laws and regulations of the countries where they are located in,
and may be adversely affected by any changes in the applicable laws and regulations.Changes in government policies, laws or regulations or their application affecting the business
activities of the relevant Groupís businesses may adversely affect its operating results, business and financial condition. There may be a need to incur additional costs or limit business activities to comply with new laws or regulations, such as stricter environmental or safety controls. For instance, the Groupís strategy is to invest in water-related infrastructure assets globally. Changes in laws and regulations of these countries or the implementation thereof may require the Group to obtain additional approvals, certificates, permits or licences from the relevant government authorities for the relevant companies of the Group to carry on its operations in these countries. The Group may be required to incur additional costs to ensure that it complies with any such changes. In addition, there is no assurance that the Group will be able to obtain the
additional approvals, certificates, permits or licences promptly or at all, and may be required to cease operations because it lacks such approvals, certificates, permits or licences. Such changes may add to the costs of carrying on business, which could materially and adversely affect the Groupís financial performance, and potentially affect the Groupís operating results, business and financial condition.

33
Environmental risks may adversely affect the Groupís water
business, profitability or financial condition. The Groupís water business is exposed to environmental risks due to the nature of its operations.Water supplies may be exposed to pollution, including pollution from the development of naturally occurring compounds, or contamination resulting from man-made sources. Should any such pollution or contamination occur in respect of the water supply of water treatment facilities, including those relating to the treatment of wastewater, raw water and water for human consumption, and the affected water treatment facility is unable to substitute a water supply from an uncontaminated water source, or to adequately and cost-effectively treat the contaminated water source, this could have an adverse effect on the business profitability and accordingly, the financial position of the relevant Group company. Further, the Groupís capital and operating costs have increased substantially as a result of increases in environmental regulation arising from improved detection technology and increases in the cost of disposing residuals from the Groupís water treatment plants, upgrading and building new water treatment plants, monitoring compliance activities and addressing contamination issues. There is no assurance that the Group will be able to recover these costs from parties responsible or potentially responsible for contamination. The Groupís ability to recover these types of costs depends on a variety of factors, including the willingness of potentially responsible parties to settle litigation (or otherwise address the contamination) and the extent and magnitude of the contamination. Also, the Group can give no assurance regarding the adequacy of any such recovery of these costs. The water supply to the Groupís water treatment facilities is also at risk of water shortages caused by prolonged periods of drought. If there are supply shortfalls caused by prolonged periods of drought, additional costs may be incurred by the relevant Group entity to provide emergency reinforcement of supplies to areas facing shortage. Restrictions on water use may adversely affect the Groupís revenues from metered customers.

Land or properties belonging to the Group may be acquired compulsorily. The Group has expanded over the past decade into diversified locations around the world, with operations and projects in Southeast Asia, the PRC, India, the MEA and the Americas. Certain laws may allow for the land or properties acquired by the Group to be acquired compulsorily by
the respective national, city or provincial governments. Such compulsory acquisitions of any of the land and/or properties acquired by the Group would have an adverse effect on the financial condition and operating results of the relevant Group entity, and correspondingly, the Group. The Groupís businesses are dependent on the policies of the respective national, city or
provincial governments. A significant part of the Groupís businesses involves environmental applications of its proprietary
membranes. The demand for these environmental solutions is
heavily dependent on the policies of the respective national, city or provincial governments from time to time. Accordingly, any changes in the policies of the applicable national, city or provincial governments from time to time with regard to the Groupís businesses will have an effect on the Groupís business, financial condition and results of operations.The Group relies on counterparties to perform their obligations.The Group has arrangements with counterparties, such as offtakers under the respective WPAs, project owners with whom the Group enters into EPC and O&M contracts, and suppliers of key pumps and RO membranes, which are essential to the operations of its plants. If any of theGroupís key counterparties fails to perform its obligations or if the creditworthiness of any of these

34
counterparties deteriorates, the Groupís operations, business and financial condition may be materially and adversely affected. Furthermore, in the case of suppliers, significant costs and time may have to be spent in order to find a replacement provider of the supplies or services. In addition, any material increase in the prices charged to the Group for these services or supplies would adversely and materially affect the Groupís operations, business and financial condition.

The Group is a new entrant to the power business.
The Groupís new seawater desalination plant in Tuas, Singap
ore, integrates an on-site 411 megawatt combined cycle gas turbine power plant that will supply electricity to the desalination plant and to the National Electricity Market of Singapore. As the power business is a new business to the Group, the Group has entered into contracts with contractors, suppliers and operators in respect of such power plant and has only just begun to build its own team with domain expertise in the energy sector. If any of the Groupís counterparties fails to perform its obligations or if the creditworthiness of any of these counterparties deteriorates, the operations of the power plant may be materially and adversely affected, which may in turn cause the Groupís operations, business and financial condition to be materially and adversely affected. The Group may require additional funding in the future due to the capital intensive nature of its business.
The Groupís business, and the projects carried out by it, are
capital intensive in nature. The Group generally finances its projects by obtaining long term limited or non-recourse financing, by entering into strategic joint ventures with partners who will co-finance these projects, or by the divestment of assets. To the extent that the funds generated from these financing strategies are exhausted, the Group may need to obtain additional funding (through bank borrowings or from the debt or equity capital markets) to finance these projects.
The Group may also, from time to time, come across and pursue business opportunities that the

Group considers to be favourable for its future growth and prospects. To the extent that funds
generated from its operations have been exhausted, the Group may need to obtain additional funding (through bank borrowings or from the debt or equity capital markets) to finance such opportunities.
The Groupís working capital and capital expenditure needs may also vary materially from those presently planned and this may also result in the need for substantial new capital or funding.
Further debt financing may, apart from increasing the Group ís gearing and interest expense, contain covenants that require the creation of security interests over assets or limit the Groupís flexibility in its operations or financing activities. Such covenants may include negative pledges, restrictions on indebtedness, maintenance of certain financial ratios, restrictions on declaring dividends and making distributions and prohibition of amendments to material documents, amongst others. Any breach of these covenants could result in defaults under the relevant financing instruments. If the Group defaults under its financing instruments and is unable to cure the default or obtain refinancing on favourable terms, there may be a material adverse effect on the Groupís financial position, results of operations, cash flows and prospects.
Additionally, there can be no assurance that the Group will be able to obtain any additional funding at commercially reasonable terms, or at all. The failure to obtain adequate or additional funding in the future may adversely affect the Groupís results of operations and financial performance and may limit the expansion and growth of the Groupís business.


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The Group is exposed to credit risks from and defaults in payments by its customers.
The financial position and profitability of the Group are dependent, to a certain extent, on the creditworthiness of its customers. Any material default by the Groupís major customers may adversely affect the Groupís financial position, profitability and cash flow. The Group may also face uncertainties over the timeliness of its customersí payments and their ability to pay. The customersí ability to pay may be affected by circumstances or events that are difficult to foresee or anticipate, such as a decline in their business or an economic downturn. Hence, there is no assurance that the Group will be able to collect its trade debts fully or within a reasonable period of time and this could adversely affect the Group as a whole.
In particular, a significant portion of the Groupís revenue
is derived from municipal projects, and the Group is exposed to a concentration of credit risk with respect to the counterparties of these projects. Financial difficulties or political upheavals faced by such customers may have a material adverse effect on the Groupís business and prospects, as the Group may lose the ability to collect outstanding receivables from these customers.
There is no assurance that the Groupís customers will not default on their payments. In the event that any of the Groupís key customers shall default on their payments, and to the extent that the Group is not covered by insurance for such defaults, the amount of bad debts written off will increase. This will in turn have an adverse impact on the Groupís financial performance as a whole and its prospects.

hypertrophy 24-05-2016 02:38 PM

Investing in bonds you are only concerned whether they will be able to pay u coupon and your principal back and whether they have enough net assets when liquidated

Some-one 24-05-2016 03:05 PM

Base on last FY, the Total liabilities > Total Assets. Very risky investment.

SCG8866T 24-05-2016 03:15 PM

Quote:

Originally Posted by Some-one (Post 101536545)
Base on last FY, the Total liabilities > Total Assets. Very risky investment.

Thats not true. Their total equity minus their perp is ard 790mil.

arctician 24-05-2016 03:41 PM

very very risky..all better don buy :s13:

hope i can get my 75k allocation

Soul77 24-05-2016 05:04 PM

Used to be holding the old 6% CPS since 2011 IPO before I sold it last year @106.xx.

If you see the current 6% keep dropping. I think both of the old one and the new one will match in price on opening day.

I don't think I'll be buying this one. the company fundamental has changed since 2011..

hypertrophy 24-05-2016 05:31 PM

Quote:

Originally Posted by Some-one (Post 101536545)
Base on last FY, the Total liabilities > Total Assets. Very risky investment.

Power la.. First time I come across negative equity siol

Asset = Liability + (negative equity)

Some-one 24-05-2016 10:15 PM

Quote:

Originally Posted by StockBot (Post 101536780)
LOL ~ are u sure or not????????

zhun bo?????????????

You can go check the fundamentals yourself

wahkao3 24-05-2016 11:32 PM

Quote:

Originally Posted by Some-one (Post 101536545)
Base on last FY, the Total liabilities > Total Assets. Very risky investment.

Quote:

Quote:

Originally Posted by StockBot (Post 101544953)
dont think equity is negative

PLEAsE CONFIRM!


its true if u strip out the intangibles :o

wahkao3 24-05-2016 11:33 PM

Quote:

Originally Posted by hypertrophy (Post 101539551)
Power la.. First time I come across negative equity siol

Asset = Liability + (negative equity)

possible
check out US. very possible :o

hypertrophy 24-05-2016 11:36 PM

Quote:

Originally Posted by wahkao3 (Post 101546015)
its true if u strip out the intangibles :o

Which intangibles you referring to? The service concessions?

SCG8866T 24-05-2016 11:48 PM

Quote:

Originally Posted by hypertrophy (Post 101546110)
Which intangibles you referring to? The service concessions?

Service concessions are life blood of Hyflux they are garmen contracts for them to build, operate and maintain infrastructure. You cannot remove that.

I did a write up on their total equity minus perp and preference in my blog and it worked out to be ard S$367mil. I do agree that their real net debt to equity is high, but still not as high as Oxley.

I will most likely still try to bid some tonight, as I like how 70% of their revenue comes from Singapore and that 35% of Singapore water supply comes from Hyflux. Their recent 750mil contract with NEA to build, operate and own a WTE(waste to energy) plant in Tuas will also act as a catalyst which is also one of the reason why they are raising more money now.

hypertrophy 24-05-2016 11:51 PM

Quote:

Originally Posted by SCG8866T (Post 101546370)
Service concessions are life blood of Hyflux they are garmen contracts for them to build, operate and maintain infrastructure. You cannot remove that.

I did a write up on their total equity minus perp and preference in my blog and it worked out to be ard S$367mil. I do agree that their real net debt to equity is high.

I will most likely still try to bid some tonight, as I like how 70% of their revenue comes from Singapore and that 35% of Singapore water supply comes from Hyflux. Their recent 750mil contract with NEA to build, operate and own a WTE(waste to energy) plant in Tuas will also act as a catalyst which is also one of the reason why they are raising more money now.

Ya I know, I already studied their annual report and quite comfortable

They are also selling some Chinese asset which will raise 200m+

WTE plant will be loss making in this Low oil price environment. But doesn't bother me because I'm not into their equities

arctician 25-05-2016 12:45 AM

ppl analyze the company till machiam they are buying their shares like that :s13:

gentle reminder this is perpertual bond leh..we are not buying hyflux shares at $0.55

no problem to break apart their debt & cash flow but subscription from private placement, comparative yields from investment grade/junk bonds, current YTM of hyflux perp in 2011 is key consideration

and for those who are gg to stag, it makes it all e more easier


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