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(05-02-2015, 12:22 PM)Curiousparty Wrote: [ -> ]Low Keng Huat rose from $0.68 to $0.74 or 8 % Gain, just because of an acquisition that will provide recurring income of only $4.2 million or 0.56 cts per share if no further value is added to the property.

Imagine the market reaction when Chip Eng Seng' s Alex Hotel TOPs in 3 month' s time. Recurring income of $14mil per annum or 2.2 cents per share will kick.

Plus there should be revaluation gain of ~30 cents in NAV because CES cost per hotel room is only around $0.4mil to $0.45mil while a typical 4-star hotel room valuation should be around $0.82mil to $0.9mil.

LKH rise is not becoz of the acquisition, please do your own research.

Vested on both CES and LKH
(05-02-2015, 12:22 PM)Curiousparty Wrote: [ -> ]Low Keng Huat rose from $0.68 to $0.74 or 8 % Gain, just because of an acquisition that will provide recurring income of only $4.2 million or 0.56 cts per share if no further value is added to the property.

Imagine the market reaction when Chip Eng Seng' s Alex Hotel TOPs in 3 month' s time. Recurring income of $14mil per annum or 2.2 cents per share will kick.

Plus there should be revaluation gain of ~30 cents in NAV because CES cost per hotel room is only around $0.4mil to $0.45mil while a typical 4-star hotel room valuation should be around $0.82mil to $0.9mil.

Are you the one who post at sharejunction too? That forum is mostly like the name stated it "junk". LOL . We have people quarreling and name calling in the forum. It is horrible. I do read there once in a while. Nothing much to take away, unlike here.

This forum here is a gem. With you here and many like blueKelah, and many other, make this place a gold mine for me. Thank to all of you very much.
LKH's recurring income is below that of CES at steady state. Now, there seems to be some kind of a mad stampede to rush in to buy CES...
Quoted "Recurring income of $14mil per annum or 2.2 cents per share will kick.".

I feel this is too optimistic, considering CES is a newbie in hotel industry and Alexandra is an untested location for hotel guests.

You need to look at other peers like Roxy Pacific and Amara past results, then consider if $14 mil per annum income is achievable.
Company address change to CES Center. Meaning that, the CES Center has start operation. Expect regular income contribution starting this quarter.
Company address change to CES Center. Meaning that, the CES Center has start operation. Expect regular income contribution starting this quarter.

Company Name Chip Eng Seng Corporation Ltd
Registered Office 171 Chin Swee Road, #12-01, CES Centre, Singapore 169877
Taking reference from UE arrangement for one of its properties.

1 hotel room - $105 dollar (net after agency fee)

450 rooms x 365 days x $105 x 0.83 (after tax) = $14.3 mil.

I would say this is reasonable estimate. Tks.

(06-02-2015, 09:28 AM)glico Wrote: [ -> ]Quoted "Recurring income of $14mil per annum or 2.2 cents per share will kick.".

I feel this is too optimistic, considering CES is a newbie in hotel industry and Alexandra is an untested location for hotel guests.

You need to look at other peers like Roxy Pacific and Amara past results, then consider if $14 mil per annum income is achievable.
(05-02-2015, 12:22 PM)Curiousparty Wrote: [ -> ]Low Keng Huat rose from $0.68 to $0.74 or 8 % Gain, just because of an acquisition that will provide recurring income of only $4.2 million or 0.56 cts per share if no further value is added to the property.

Imagine the market reaction when Chip Eng Seng' s Alex Hotel TOPs in 3 month' s time. Recurring income of $14mil per annum or 2.2 cents per share will kick.

Plus there should be revaluation gain of ~30 cents in NAV because CES cost per hotel room is only around $0.4mil to $0.45mil while a typical 4-star hotel room valuation should be around $0.82mil to $0.9mil.

Both companies are more similar that you think - I am a shareholder in both Low Keng Huat and Chip Eng Seng, and the reasons I bought them are pretty similar:

Large profits to be booked
Paya Lebar Square for LKH and Alexandra Central for CES

Record profit year
Both LKH and CES are heading for record breaking profits, bringing their current year PE into the range of 2-3x

Growing recurring income
LKH has invested into West Gate Towers, and now AXA Tower. CES's growing recurring income has been discussed in detail in this thread.

Good dividend paying history, with more upside potential
Both have paid dividends in excess of 4% (last year dividend, based on current share price)
There is reasonable expectation of increase in dividend with the record profit.

High RNAV
Both stocks are trading below 50% of even very conservative estimates of their RNAV. While they are unlikely to start selling off quality assets, it provides me the MOS that I desire, and I enjoy owning properties at "buy-one-free-one" offer.

Mid-sized, long history, conservative management
This kind of business tends to "fly under the radar", which gives us the opportunity to purchase at a bargain. However, with record profits, and possibly record dividend yields, I see likelihood for share price re-rating due to the lime light these stocks will get.
The recent interest rate cut in Australia will help to boost the housing market in Australia Smile

Good for CES as it still has 3 land banks in Australia.

If TM is included, that will be 4 land banks!!!

Plus the weaker Aussie Dollar will boost the buying power of CES who has yet to announce the deployment of the $150mil cash , e.g. investment properties, etc
(06-02-2015, 08:04 PM)Curiousparty Wrote: [ -> ]The recent interest rate cut in Australia will help to boost the housing market in Australia Smile

Good for CES as it still has 3 land banks in Australia.

If TM is included, that will be 4 land banks!!!

Plus the weaker Aussie Dollar will boost the buying power of CES who has yet to announce the deployment of the $150mil cash , e.g. investment properties, etc

Interest rate which had been held steady over a year has been cut meaning the gov is not confident anymore about the economy and have no choice but to do easing despite asset inflation it would cause..

Land banks will increase in value over time but could have a big drop in value in the short term if there is any crash in the market. There is also an overhang of apartments where CES has its land banks which will hamper both prices and development in the next 5 years. Already rental yields are being compressed a lot due to price gains the past few years.

Weaker AUD also means the assets in AU and any income coming from there will be decreased due to forex losses. CES reports in SGD.

TM is still sitting there partially demolished with the new VCAT case launched in december by the guy next door, which might take forever to resolved given the recent change of local state government party in Victoria. The previous planning minister who approved development has been ousted, so no more political backing for the project (the local mayor of the party just voted in, has always been opposed to the skyscraper projects.)

So land banks and TM might just end up sitting there for next 5-10 years not doing much.

[Image: ss10_zps9b7e5090.jpg]
Image from Skyscrapercity.com 15th December 2014

Caveat Emptor