Just as I have written recently on Hyflux 6% PerCapSec (corrected term), they decided to play punk. Thanks to Swiber ! We have a lesson learned. Will the macro stock market get worst ? I think it can, considering poor Singapore economic performance. But fixed returns are kind of "Protected under Lehman definition haha " provided the firm continues to be alive.
Before you read, I like to warn again. For those who see the world in "Black" and "White", please ignore me ... err I mean my article as is a lot of Estimation, Guess work and Intuition. This mean you need to grow up to own your decision. I have to own mine often. :)
Below Par
Hyflux 6% PerCapSec price dropped to 0.946 (Below Par). Below Par happens to Oxley and Aspial bonds too. Thus, likely market sentiment. And this happens when retailers did not do their home work. This also tell me there maybe opportunity created by the fearful.
If Hyflux pay up their dividend this Nov on the Hyflux 6% PerCapSec, the return will be 0.03. With two more potential gains to come along with it.
a. Return to parity meaning 0.054 more.
b. Premium of the listed PS which may hit 0.02.
That's a total of 0.054+0.02+0.03 = 0.104 returns or potentially 10.4% within 3 months and a week. Hope I get it right. Greed set in. haha. I think is worth my time to do some investigation and assess the risk again.
Comparison
The problem started with Swiber. So I think maybe i should do a comparison between Hyflux and Swiber information. Please do your sum as I manually key it off quickly from the information I got from the web so there maybe careless error.
When i look at the data as a non-financial reader, I see work being done in Hyflux. I see growth. In-addition Hyflux has a key financial advantage which is Hyflux 6% PerCapSec to support flexibility which Swiber didn't get in time.
Model Strength
Hyflux supports build and Operate. Engineering, Procure and construct. This are analogy to "Printer". The recurring income from membrane sales will be like "Printer cartridges".
Cash Flow
• Operating cash flows after SCA and tax paid included investments into construction of
Qurayyat IWP and TuasOne WTE project.
• Investing cash outflows mainly for investment in PT Oasis Water International, a 50%
joint venture in Indonesia.
• Financing cash inflows mainly from proceeds from issuance of $500 million perpetual
capital securities in May 2016.
What people see is cash flow. But what I see is strong management oversight. I see execution. I see financial supports. I see they have a plan and seems to know what they are doing.
Summary
As previously mentioned Hyflux 6% PerCapSec is a little for the risk we have to pay for to proof their model is successful as we may lose our investment. But why would anyone want to pay more if they can get sufficient subscription. If they have paid higher and screwed their investment returns, is a lose-lose proposition.
As right now, the returns from recent market sentiment is quite attractive.
If I am to bet, I will be on Olivia side. But do I dare ? Once we go in, it can be a slippery slope of no return. This is Investment Risks.
Cory
20160820
Before you read, I like to warn again. For those who see the world in "Black" and "White", please ignore me ... err I mean my article as is a lot of Estimation, Guess work and Intuition. This mean you need to grow up to own your decision. I have to own mine often. :)
Below Par
Hyflux 6% PerCapSec price dropped to 0.946 (Below Par). Below Par happens to Oxley and Aspial bonds too. Thus, likely market sentiment. And this happens when retailers did not do their home work. This also tell me there maybe opportunity created by the fearful.
If Hyflux pay up their dividend this Nov on the Hyflux 6% PerCapSec, the return will be 0.03. With two more potential gains to come along with it.
a. Return to parity meaning 0.054 more.
b. Premium of the listed PS which may hit 0.02.
That's a total of 0.054+0.02+0.03 = 0.104 returns or potentially 10.4% within 3 months and a week. Hope I get it right. Greed set in. haha. I think is worth my time to do some investigation and assess the risk again.
Comparison
The problem started with Swiber. So I think maybe i should do a comparison between Hyflux and Swiber information. Please do your sum as I manually key it off quickly from the information I got from the web so there maybe careless error.
When i look at the data as a non-financial reader, I see work being done in Hyflux. I see growth. In-addition Hyflux has a key financial advantage which is Hyflux 6% PerCapSec to support flexibility which Swiber didn't get in time.
Model Strength
Hyflux supports build and Operate. Engineering, Procure and construct. This are analogy to "Printer". The recurring income from membrane sales will be like "Printer cartridges".
Cash Flow
• Operating cash flows after SCA and tax paid included investments into construction of
Qurayyat IWP and TuasOne WTE project.
• Investing cash outflows mainly for investment in PT Oasis Water International, a 50%
joint venture in Indonesia.
• Financing cash inflows mainly from proceeds from issuance of $500 million perpetual
capital securities in May 2016.
What people see is cash flow. But what I see is strong management oversight. I see execution. I see financial supports. I see they have a plan and seems to know what they are doing.
Summary
As previously mentioned Hyflux 6% PerCapSec is a little for the risk we have to pay for to proof their model is successful as we may lose our investment. But why would anyone want to pay more if they can get sufficient subscription. If they have paid higher and screwed their investment returns, is a lose-lose proposition.
As right now, the returns from recent market sentiment is quite attractive.
If I am to bet, I will be on Olivia side. But do I dare ? Once we go in, it can be a slippery slope of no return. This is Investment Risks.
Cory
20160820
