Chip Eng Seng

[Curiousparty]

Since the remaining lease is only 54 years, if the CES centre is re-developed into a 20-storey hotel or mixed development, can the lease be topped up? tks.

************

Extract
"CES Centre has some redevelopment potential, given the prime location (10mins walk from Chinatown MRT), possible alternative uses, and less than 60 years lease. Indeed, word on the street is that the site could be redeveloped into 20-storey hotel, or mixed development with at least 60% space set aside for commercial use"

[Curiousparty]

Honestly, I don't pin a high hope that a massive special dividend will be declared.

My forecast is regular 4 cents + special 2 cents = total 6 cents.

Tks.

Based on latest Q2 results, half yearly net profit of $40mil was a 260% jump against last FY $11mil.

But the most delicious part is yet to come. The Group’s wholly-owned development projects, Belvia and Alexandra Central, are scheduled for completion in 3Q2014 and 4Q2014 respectively. Revenues and profits of both development projects will be recognized upon completion.

These 2 projects are expected to contribute to EPS of about 25 cents to 30 cents based on the recognition upon completion method.

So full year EPS will be at least 31 cents to 35 cents or 200% jump from last FY.

In short, there is Clear Profit Visibility for last 2 quarters of FY14 plus whole of FY15 as well.

Outside Singapore, the Group will continue to focus on getting its two projects in Melbourne (Doncaster and Victoria Street) ready for launch.

a. The Group intends to launch its residential development in Doncaster before the end of this year. The development will comprise approximately 105 townhouses and 72 low rise apartments.
b. With regards to Tower Melbourne, there are issues pertaining to demolition works. The Group expects a delay in the completion of Tower Melbourne due to ongoing protracted proceedings with
the adjoining owner as to what constitutes adequate protection work over the adjoining property.

with an estimated full year EPS of 31 cents to 35 cents, i am hoping that chip eng seng can declare a special dividend of 4 cents next year. Combined with the usual dividend of 4 cents, that gives a yield of close to 10% at today's price.

If the hotel at alexandra central is successfully sold, that's the best!

[Curiousparty]

With the announcement of the new Thomson-East Coast Line, CES would probably start to move the sales at Fulcrum again.
Heard that the exit of "Katong Park" MRT seems to be right in front of Fulcrum??!!

(pls see map below)

http://postimg.org/image/q8ddkz5rj/

Does this go to show how savvy the management is when selecting sites?
If fully sold, it is going to yield reasonable profit for CES. ~10 cents is my prelim estimate.

[Curiousparty]

CES spiked to close at 87 cents today amidst the following factors:-

1. weak property sentiments in the physical local market
2. many calling for black swan or Armageddon in overseas housing markets in China and Australia.
3. delay in TM project
4. city council voicing strong opposition to the Carlton project
5. Quite a few were saying that share price at 80 cents had already factored in all future developments like Alex central, etc (despite the factor that book NAV was still at 80 cents at the point when share price was around 80 cents. Counters like Wee Hur is still trading way above their book NAV now. It is this type of counter that is likely to correct heavily amidst weak property sentiments. Just look at what is happening to Oxley now. free falling!!! )

Despite all these negative factors, CES management bought back another 2mil shares in the market today at around 85 cents!!!!!!!

Substantial share buyback usually happened only when management is of the view that their share price is very undervalued by at least 30% or more, and management is of the view that there is no better use for the money, other than to buy back company's shares from open market
(IMHO)

[tpooyee]

2,000,000 share buy back at 0.84688 each

Vested, 2nd highest in portfolio.

[Curiousparty]

CES is still very very undervalued, relative to the other property developer counters.

Roxy Pacific
Book NAV = $0.295
ANAV (adjusted NAV) or RNAV = $0.666
Current Share Price = $0.58
Discount to ANAV = 13%
Premium above book NAV = 97%

Wee Hur
Book NAV = $0.24
RNAV = ??
Share price = $0.38
Discount to RNAV = ?
Premium above book NAV = 58%

Oxley
Book NAV = $0.17 (Dec 2013)
RNAV = ??
Share price = $0.63
Discount to RNAV = ?
Premium above book NAV = 270%.


CES
Book NAV = ~$0.80 (end June 2014)
Share price = $0.87 (18 Aug 2014)
RNAV (by end 2014) = ~$1.15
RNAV (by end 2015) = ~$1.60
RNAV (by end 2018) = ~$2.23

Applying a 15% discount to the above RNAV (similar to Roxy Pacific),
Probable CES' Share Price
End FY14 - $0.98
End FY15 - $1.36
End FY18 - $1.90

[Curiousparty]

Another 1.5 mil shares bought back at average price of 88.6 cents
Company still thinks that its share price is very undervalued, and probably at risk of being "buyout" by other acquirers. Hence, they have to "narrow" the gap b/w market valuation and RNAV.


Strangely, company seems unperturbed by the following negative factors:-
a. delay of TM project
b. low sales at Fulcrum (as of now)
c. Carlton project might not get approved
d. possibility of property market crash in the markets they are operating in (e.g. Spore, Australia, Malaysia, etc)
e. macro factors (e.g. China housing market, Russian issue, middle east, etc)

[BlueKelah]

CES is still very very undervalued, relative to the other property developer counters.

Roxy Pacific
Book NAV = $0.295
ANAV (adjusted NAV) or RNAV = $0.666
Current Share Price = $0.58
Discount to ANAV = 13%
Premium above book NAV = 97%

Wee Hur
Book NAV = $0.24
RNAV = ??
Share price = $0.38
Discount to RNAV = ?
Premium above book NAV = 58%

Oxley
Book NAV = $0.17 (Dec 2013)
RNAV = ??
Share price = $0.63
Discount to RNAV = ?
Premium above book NAV = 270%.


CES
Book NAV = ~$0.80 (end June 2014)
Share price = $0.87 (18 Aug 2014)
RNAV (by end 2014) = ~$1.15
RNAV (by end 2015) = ~$1.60
RNAV (by end 2018) = ~$2.23

Applying a 15% discount to the above RNAV (similar to Roxy Pacific),
Probable CES' Share Price
End FY14 - $0.98
End FY15 - $1.36
End FY18 - $1.90

Just for a break from the incessant cries of "oh this counter is very undervalued".

Found this same post on NextInsight forum by someone called potatolover which coincidentally is the nick of a previous VB member who was banned.

http://www.nextinsight.net/index.php/for...=108#20685

What is the motive of one who posts same thing on multiple forums?

[roxhockey]

There's no question CuriousParty is more on the promotional side of objective but at the end of the day it's up to everyone to interpret the facts as presented and make their own decisions. He's still doing the work to post useful analysis so that can only help.

[sykn]

For me, it's the sincerity that comes across when the person puts up the post. Whether a posting seems more promotional than another really depends on the personality of the person doing the posting and how passionate he is about the subject. Some say a lot of good things about the company, some give a lot of data that they have analysed, some share a news article or analyst report, still others choose to provide a lot of information but no personal views. I find all of them useful, so long as he doesn't keep "urging" me the buy the stock. Just a personal perspective.