HYFLUX PreCapSec- What really matters in a Bond

investing in bonds are safe and slow

What are Perpetual Securities
  • Hybrid form of securities that combine features of both debt and equity
  • Won’t be paid on time if Issuer decides to postpone the payments ( But Hylfux has implement a dividend stopper – means if they do not pay regular coupon payment, it will not be able to pay dividend to its shareholders)
  • Won’t be redeemed if Issuer decides not to exercise the call option

 

“Specialist in water treatment and among the top global desalination plant provider. It operates in Asia Pacific, Middle East, Africa and America. Just won the largest “waste-to-energy” project in Singapore. Bond rate will change in 2020 to 6.2%.”

1. Identification of Bond Below par value

  • Current market value : 0.968 ( discount of 4 cent) – Thats a capital gain of $40 with it matures, assuming you buy only 1 lot.
  • Price to book value of the company : 0.2 (80% discount?!)

2. Their Numbers – Financial health (some numbers are not shown as they are too choppy over the years, which shows the lack of consistency. Do understand that this company growth has heavy reliance on projects – means they need heavy financing)

  • Net Asset Value Per Share : 54.23
  • Debt to Equity : 79% (Quite dangerous as growth & management is based on financing)
  • Dividend payout has been decreasing (not a good sign)

Screen Shot 2016-09-09 at 10.27.39 am.jpg

 

Although the company has a long MNC reputation and dividend stopper is in place, it wouldn’t be a investable product for me as I find the numbers too choppy 😦 

+1 knowledge point

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