Standard Chartered starts Hyflux (600.SG) at Outperform with $3.80 target price, based on discounted cashflow valuation, says Dow Jones. 

Expects sustainable earnings stream as water treatment firm’s build-operate-transfer projects in China gradually commencing operations, ramping up. 

 

Flags potential for mega contract in Libya, where Hyflux has already signed memorandum of agreement to build 2 desalination plants; “while only a memorandum of agreement is signed, the potential from a win on this project could enhance earnings by 19%-189% during FY11-13.” 

 

Says concerns over high gearing are easing given recent JVs with Japanese companies to help fund projects. Shares +1.0% at $3.16.