 |
| Created by an anonymous person, not me, who shared in the Hyflux Retail Telegram group. PnP refers to the perpetual and preference share holders. |
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.
Desalination is one of the 4 National Taps of Singapore. The importance of water cannot be overstated and can be summed up in a quote from our Late Mr Lee Kuan Yew.
" Every other policy has to bend at the knees for our water survival. Water is a precious resource; without it you die. You can live without energy....But without water you dehydrate and die."
Quote from Lee Kuan Yew
Let us do the maths.
- Olivia has stated that only 10% revenue is from water in the Townhall. You will have to plug in a earphone and turn up the volume to the loudest.
- In annual report 2017, the amount of Tuaspring revenue is $ 174 million , so water revenue at 10% of revenue is $17 million.
- It has been publicised that Tuaspring has a capacity of 318,500 cubic metre a day.
- It has been stated in an article that the price of water in the first year is 45 cents per cubic metre sold by Hyfux to PUB.
- Total maximum water revenue from PUB if plant is ran at the target capacity of 318,500 cubic metres per day , for 1 year :
318,500 cubic metres per day X 365 days X $0.45 per cubic metres = $52 million
$17 million / $52 million = 33% of max capacity
- PUB has also stated publicly that Hyflux has failed to provide the required plant capacity on multiple occasions, and problems surfaced since 2017.
- Tuaspring is currently the largest desalination plant in Singapore and it is supposed to bring in 70 mgd ( equivalent to about 318,226 cubic metres which is nearly the same as the stated 318,500 cubic metres stated as the capacity of Tuaspring) . Out of the current 130 mgd of desalinated water that Singapore has as stated in the info-graphics below, Tuaspring makes up more than half of our current desalinated water supply. This makes Tuaspring the elephant in the room. A very important strategic project.
My Thoughts
It is very disturbing to me as a Singapore citizen that our water supply is not a strong as it seems to be protrayed. Tuaspring, which is supposed to provide more than half of our current desalinated water supply seems only able to produce 33% of its capacity, 105,105 cubic metres a day instead of 318,500 cubic metres a day.
It is very shocking to me that the problems at Tuaspring was already known by PUB in 2017 and yet this was not disclosed, citing confidentiality.
It was written in a Straits Times article titled " Parliament. Investors urged to take only risks they can live with".
In it, Minister Ong Ye Kung said" Risks are inherent in investment...." [Investors] " ......need to pay close attention to what is disclosed, look beyond potential returns and assess if they can also accept the risks that come with specific investments" See here for the full article.
The article ended off with " We will continue to educate the investing public on the trade-off between risk and return through the MoneySense programme," said Mr Ong.
I do not think the issue of this failed Public-Private-Partnership project which is Tuaspring that resulted in the loss of up to 50,000 retail investors is a matter that can simply be solved with more education. Neither is it a matter about the investors not paying close attention to what is disclosed.
Rather, the real problem is the lack of material disclosures which are swept under the category of confidentiality.
Even as of 7 March 2019, material information which is needed for retail investors to make a decision on the proposed restructuring is still withheld.
How could the Hyflux retail investors make any informed choice when material information is not given, under the reason of confidentiality?
Why couldn't PUB disclose the operational defaults much earlier?
Why wasn't the revenue of Tuaspring segmented into electricity and water in their annual reports so that investors could see clearly that Tuaspring is actually a power plant in disguise, instead of an ancilliary power plant?
Why wasn't a shareholder mandate called for when there was a material change in business such that the risk profile of the Hyflux has changed drastically when a large percentage of their revenue is from electricity instead of their traditional water business ?
And to end off. I think that to calculate 33% as the operational output of Tuaspring may actually be very optimistic. This is because i used 45 cents per cubic metre which is the first year price in 2013. We do not know what is the actual price of treated water sold to PUB in 2017.
If we use a direct comparison approach with the 2 latest desalination plant that are in progress, the price of water sold to PUB is 91cents and 108 cents. Source here and here. Let's say the price in 2017 that Tuaspring sells to PUB is the average of the two prices at 99 cents per cubic metre.
The actual operational capacity of Tuaspring may actually only be 15% ( 47,045 cubic metres instead of 318,500 cubic metres a day). This is definitely a cause for national concern.
Minister Masagos in his speech in parliament in 2018 stated:
“Where we have allowed private sector participation via the DBOO model, safeguards are in place. PUB has adequate measures to ensure DBOO plants remain in operation and supply is not disrupted. It is a top strategic priority of the Government to keep our taps flowing.”
Source here.
Why wasn't the operational problems at Tuaspring highlighted then or earlier in 2017 during Parliament, since it is of paramount importance to the water security of Singapore?
I am even more determined to VOTE NO to the structuring which would risk a $0 recovery. This is because i think there are more problems that needs to be brought to light.
By accepting the restructuring, we, the retail investors, are condoning future instances of such cases to happen again in our country.
By accepting the restructuring, all may be buried and this is no good for the nation of Singapore.
My country and my home.
And who gave Olivia Lum the 8 million** population projection as mentioned in first Townhall which resulted in her overconfidence to take on Tuaspring? Turn up the volume and use a earphone.
Be patient and wait for it.
**No replies for clarification has been received thus far from Hyflux Investor Relations.
It is very disturbing to me as a Singapore citizen that our water supply is not a strong as it seems to be protrayed. Tuaspring, which is supposed to provide more than half of our current desalinated water supply seems only able to produce 33% of its capacity, 105,105 cubic metres a day instead of 318,500 cubic metres a day.
It is very shocking to me that the problems at Tuaspring was already known by PUB in 2017 and yet this was not disclosed, citing confidentiality.
It was written in a Straits Times article titled " Parliament. Investors urged to take only risks they can live with".
In it, Minister Ong Ye Kung said" Risks are inherent in investment...." [Investors] " ......need to pay close attention to what is disclosed, look beyond potential returns and assess if they can also accept the risks that come with specific investments" See here for the full article.
The article ended off with " We will continue to educate the investing public on the trade-off between risk and return through the MoneySense programme," said Mr Ong.
I do not think the issue of this failed Public-Private-Partnership project which is Tuaspring that resulted in the loss of up to 50,000 retail investors is a matter that can simply be solved with more education. Neither is it a matter about the investors not paying close attention to what is disclosed.
Rather, the real problem is the lack of material disclosures which are swept under the category of confidentiality.
Even as of 7 March 2019, material information which is needed for retail investors to make a decision on the proposed restructuring is still withheld.
 |
| Source here. |
Why couldn't PUB disclose the operational defaults much earlier?
Why wasn't the revenue of Tuaspring segmented into electricity and water in their annual reports so that investors could see clearly that Tuaspring is actually a power plant in disguise, instead of an ancilliary power plant?
Why wasn't a shareholder mandate called for when there was a material change in business such that the risk profile of the Hyflux has changed drastically when a large percentage of their revenue is from electricity instead of their traditional water business ?
And to end off. I think that to calculate 33% as the operational output of Tuaspring may actually be very optimistic. This is because i used 45 cents per cubic metre which is the first year price in 2013. We do not know what is the actual price of treated water sold to PUB in 2017.
If we use a direct comparison approach with the 2 latest desalination plant that are in progress, the price of water sold to PUB is 91cents and 108 cents. Source here and here. Let's say the price in 2017 that Tuaspring sells to PUB is the average of the two prices at 99 cents per cubic metre.
The actual operational capacity of Tuaspring may actually only be 15% ( 47,045 cubic metres instead of 318,500 cubic metres a day). This is definitely a cause for national concern.
Minister Masagos in his speech in parliament in 2018 stated:
“Where we have allowed private sector participation via the DBOO model, safeguards are in place. PUB has adequate measures to ensure DBOO plants remain in operation and supply is not disrupted. It is a top strategic priority of the Government to keep our taps flowing.”
Source here.
Why wasn't the operational problems at Tuaspring highlighted then or earlier in 2017 during Parliament, since it is of paramount importance to the water security of Singapore?
I am even more determined to VOTE NO to the structuring which would risk a $0 recovery. This is because i think there are more problems that needs to be brought to light.
By accepting the restructuring, we, the retail investors, are condoning future instances of such cases to happen again in our country.
By accepting the restructuring, all may be buried and this is no good for the nation of Singapore.
My country and my home.
MERDEKA SINGAPURA!
And who gave Olivia Lum the 8 million** population projection as mentioned in first Townhall which resulted in her overconfidence to take on Tuaspring? Turn up the volume and use a earphone.
Be patient and wait for it.
Further reading
1) Considerations about Hyflux2) 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
15)An industry comparison of Hyflux compared with its peers - Question 15
16)What other Water Companies did that Hyflux didn't - Question 16
17)Why a debt to equity option for retail investors is not right
18) Consolidated Questions For Hyflux Townhall Meeting on 19 and 20 July 2018 - Hyflux
19)Consolidated Questions For Hyflux Townhall Meeting on 19 and 20 July 2018 - Hyflux- continued
20)Informal Steering Committee for the Reorganisation Process - Hyflux
21) What happened to other Debt Restructuring Exercises - Ausgroup
22)What happened to other Debt Restructuring Exercises - Nam Cheong
23) My layman views of the so-called " White Knights of Hyflux"
24) The Unsecured Working Group (UWG) are against the retail investors - Hyflux
25)Where to find money to pay back retail investors?
26)What happened at Hyflux's Second Townhall Meeting
27) Another bomb to the retail investors of Hyflux
28)The Underrated Importance of Regulatory Risk - Hyflux
29)The Overlooked Importance of Another Regulatory Risk - Hyflux
30)Why did so many Singaporeans invest in Hyflux - The positive image illusion
31)On Why The Rich Get Richer And Poor Gets Poorer - The Hyflux Proposal is Out!
32)The " not spoken much" dirty little thing about the Restructuring Proposal - the $33 million - Hyflux
33) The Failure of the much touted Public-Private-Partnership Model in Singapore - Hyflux
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.