Thursday, June 21, 2018

An industry comparison of Hyflux compared with its peers - Question 15

Finally, i am upgraded to my bed! All thanks to my toddler that insists on sleeping with Papa on the sofa. My wife's love for the Son superseded her despise of her Good For Nothing, Penny wise,Pound foolish Husband. She must have logically deduced that she will still be able to keep a distance from me as my son sleeps in the middle.

Children are angels to be cherished..truly......
Now back to Hyflux.

The much needed 6 months moratorium has been granted, though it could be said to be expected. Courts generally rule on precedents and precedents in the form of Nam Cheong, Pacific Radiance,e t.c having secured 6 months moratorium before, means it isn't too difficult to justify the decision to grant Hyflux the moratorium.  And, Hyflux, as i have said before, is a company that does indeed provide value to society, and so, should be able to squeeze out a profit. The problem is the management...truly..big problem.

Disclaimer: I am not an investment advisor. Heck, i am not even working in the financial industry. Below are my interpretation and i am grateful if you will let me know if anything i say is wrong and i will correct it in a reasonable time. I am not an expert and don't wish to be assumed to be one. I make losses frequently.

How are the management like in other Water companies in Singapore

To make it an apples to apples comparison as much as possible, i used Water companies within Singapore  to further elaborate why i think the issue is the management. Granted there are slight differences, as always, as no 2 companies or 2 persons are identical, i think the reasonable person wouldn't object to the chosen companies.

I have used companies larger and smaller than Hyflux in terms of revenue to try to show objectivity as much as possible.

I have flagged out in red the undesirable attributes ( in my opinion) of Hyflux.
Except for Darco, no other water companies have the same CEO and Chairperson.
Among Hyflux's peers, it has the largest percentage of directors serving more than 10 years on the board.
In terms of remuneration in cash, Olivia's remuneration in cash is roughly in the range of Citic Envirotech's CEO despite Citic's revenue about 3 times of Hyflux and Citic being profitable but Hyflux making a loss.
The funny thing is all of them are making profits and yet Hyflux's Olivia is getting the highest ( same par as Citic) remuneration in cash.

Do you think it is reasonable?

Now for the ....
Question 15

 Olivia and the remuneration committee, can you comment on what is the basis on deciding the amount of remuneration?

Further reading
1) Considerations about Hyflux
2) The fate of Hyflux
3)Will Hyflux recover? The billion dollar question
4) Hyflux-Treatmeat of perpetual share holders- Ezion
5) Hyflux - loans and borrowings - Pacific Radiance
6)A happy ending for retail perpertual securities holders - Tiger Air and Hyflux
7) The Very Curious Case of Sharebuybacks- Hyflux
8)What did the founder/Chairwoman/CEO do to help hyflux throughout the years
9) Moving forwards at the Townhall meetings with Hyflux - Part 1
10) Moving forward at the Townhall meeting with Hyflux - Part 2
11)The Lucky Accredited Investors of Hyflux's Perpetual Securities - Part 3
12) The Peculiar Case of HyfluxShop - Question 12 
13)Uncovering the Real Motivations Behind the HyfluxShop 
14) High Level Staff Movement Indication of Red Flags -Hyflux