Chip Eng Seng

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Chip Eng Seng: Reports 36% Increase In 4Q 2012 Net Profit To $39.2 Million.
21 Feb 2013 17:23
Chip Eng Seng Corporation Ltd has reported a 36% rise in Group net profit to $39.2 million on an almost four-fold increase in Group revenue to $222.6 million, for the three months ended 31 December 2012. For the full year ended 31 December 2012, the Group achieved record revenue of $617.1 million and net profit of $81.3 million...

Press Release
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(21-02-2013, 08:03 PM)edragon Wrote: Chip Eng Seng: Reports 36% Increase In 4Q 2012 Net Profit To $39.2 Million.
21 Feb 2013 17:23
Chip Eng Seng Corporation Ltd has reported a 36% rise in Group net profit to $39.2 million on an almost four-fold increase in Group revenue to $222.6 million, for the three months ended 31 December 2012. For the full year ended 31 December 2012, the Group achieved record revenue of $617.1 million and net profit of $81.3 million...

Press Release

4 cents dividend. HUAT AH!!!
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interesting.. why has the gross or net margins dropped so considerably? I thought that margins in property development are usually quite high?
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I always struggled to reconciled intersegment sales...could someone pls help me.

Excluding intersegment sales
Construction rev '11/'12 is $205M/$245M
Construction segment result '11/'12 is $90.6 / $43.4 ...profitability drops so much? Cost of construction / labour gone up so much?? Levy?

Property development rev '11/'12 is $152M / $368M
Property development segment result '11/'12 is $41M / $36.6M ....also 'jia lat'....could this be due to 33M (Australia) being less profitable than Singapore?
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Tan Yong Keng purchased more than 6 mil shares bring his holding to slightly over 8%.
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Like I say before - it ain't over till the project is completed. So better pray hard that apartment prices don't spiral downwards before project completions.

http://www.vic.api.org.au/folder/news/me...lan-buyers

MELBOURNE APARTMENT VALUES ON THE SLIDE – FALLING PRICES TO HIT OFF-THE-PLAN BUYERS

Eight out of 10 off-the-plan apartment buyers in Melbourne could end up paying more for their properties than they are worth, analysis shows.

Apartment prices across Melbourne have fallen between 7 per cent and 11 per cent in the past 12 months. The troubled Docklands development, south of the central business district, has posted median falls of 25 per cent, according to estimates.

About 20,000 deals could be affected during the next 2 ½ years as buyers, who paid a 10 per cent deposit to secure their property, are required to pay the balance.

Banks, which are believed to be undertaking their own stress testing of the market, declined to comment other than to say every deal was reviewed on a “case-by-case basis.”

Sam Nathan of property consulting company Charter Keck Cramer said: “Investors need to hold tight, to digest and maintain their focus on the long term. Property is a long-term play and we are going through a cyclical supply event.”

According to Charter Keck Cramer research, developers have been reducing supply, by about 16,750 apartments in 2010 to 11,100 last year, which is still about 30 per cent above the long-term average.

Across the Melbourne metropolitan area, which extends about 25 kilometres from the central business district, there were about 10,250 apartments completions last year, 19,250 under construction and 16,300 being marketed but not under construction.

The two most active sectors are the central business district and its five-kilometre fringe where at the end of 2012 there were 14,000 under construction, 8950 still being marketed.

There are expected to be about 11,000 completions this year and potentially 16,000 next year, or 37,000 over three years.

Angie Zigomanis, a senior manager for BIS Shrapnel, which forecasts movements in Australian property markets, warned about growing nervousness among buyers and developers.

For example, a bank might lend up to 90 per cent of the total value. So on a $1 million apartment the bank would lend $900,000 and the buyer contributes a $100,000 deposit.

If the property price on a $1 million fell 20 per cent, the bank would only be prepared to lend $720,000 on a valuation of $800,000. The buyer would have to cover the gap.

Many of the contracts were entered between two and three years ago when investors were still deeply wary of investing in shares because of heavy losses suffered during the global financial crisis.

Many sought the safety of bank deposit accounts or were advised by wealth managers to invest in properties through their self-managed superannuation funds, which provided a tax shelter in addition to negative gearing.

Analysts claimed the bulk of the deals involved investors, rather than owner-occupied property.

Agents said that many of the apartments have been sold to overseas buyers, particularly Chinese, who seek foreign investments in politically stable countries as a hedge against economic and political upheaval at home.

Andrew Perkins, national head of research for Oliver Hume Research, said the market fundamentals were strong and improving because of falling interest rates and rising consumer confidence.

Mr Perkins added that demand would continue to be buoyed by population growth and rising student numbers.

Melbourne’s status as a financial and manufacturing centre that is home to more than 4 million people rules out any comparison to the negative equity that plagued investors on the Sunshine and Gold Coast, which is largely a convention and tourist centre.

According to RP Data, unit values in Docklands fell 25 per cent during 2012, compared with Melbourne unit prices that were down 2.5 per cent.



Media Source: The Weekend Australian Financial Review

Date of Publication: 2 – 3 March 2013

Author: Duncan Hughes
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Hi Greengiraffe, thanks for sharing that info. Has Chip Eng Seng not finished selling it 33M? Thought there is no return and all sold? Would they be affected? What is left is Melbourne Tower which won't be completed till 2016. 2013 highlites are Prive and Belysa completion.........
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(16-03-2013, 06:26 PM)BeDisciplined Wrote: Hi Greengiraffe, thanks for sharing that info. Has Chip Eng Seng not finished selling it 33M? Thought there is no return and all sold? Would they be affected? What is left is Melbourne Tower which won't be completed till 2016. 2013 highlites are Prive and Belysa completion.........

Alexandra probably in 2015.

And I am interested in CES performance for the Yishun plot.

Vested.
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As far as I can remember, committed buyers of Aussie properties can walk away from their incomplete projects even after completion. They simply lose their deposits.

Of course, the developer reserve the right to sue for completion of purchases. However, in the recent apartment slump in Gold Coast, the developer of iconic Soul Towers eventually went into receivership due to buyers going awol on completion in 2012, 5 to 6 years after the project was presold before the GFC.

Buyers Beware

(16-03-2013, 06:26 PM)BeDisciplined Wrote: Hi Greengiraffe, thanks for sharing that info. Has Chip Eng Seng not finished selling it 33M? Thought there is no return and all sold? Would they be affected? What is left is Melbourne Tower which won't be completed till 2016. 2013 highlites are Prive and Belysa completion.........
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Based on thier CQ3 & Q4 development property revenue, it seems a very large part of 33M sales have been recorded. What disappoints me is the very low returns on foreign property development. This isn't exclusive to CES, many mid sized developers who develop properties in PRC also don't seem to get very good ROI%...Anyway, 33M is history. Let's focus on Prive and Belysa in 2013, Belvia and Manhattan in 2014, Fulcrum in 2015 and Alexandra in 2015/16....Most projects are either 100% or have a very to-date sales, only Fulcrum.

Vested
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