SINGAPORE (Nov 5): OCBC is downgrading Hyflux to “sell” from “hold” with lower fair value of 56 cents after producing another disappointing quarter. The research house also expects the drought of new infrastructure projects to continue.

Although Hyflux reported 3Q15 revenue grew 32% to $133.5 million from last year, buoyed by the Qurayyat Independent Water Project (IWP) in Oman; gross margin dipped to 42.8% in the quarter, versus 75.1% in 2Q15 and 59.6% in 3Q14.

While Hyflux reported NPATMI of $6.4 million, this was boosted by a non-cash fair value re-measurement gain of $12.3 million – this relating to its Tianjin Dagang Desalination Plant in China.

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