Chip Eng Seng

Chip Eng Seng: NRA reinitiates at Overweight with TP $1.04, based on the SOTP of its property development (30% discount to RNAV) and construction business (6x FY14e P/E). Valuation backed by an attractive 5.3% dividend yield. The house notes FY14 will be a watershed year, as the group will recognize ~$850m of revenue for 3 projects which TOP this year – Alexandra Central, Belvia and 100 Pasir Panjang. In Australia, Chip Eng Seng successfully launched its first property back in 2012 with the 33M at 33 Mackenzie Street, Melbourne, and is currently developing Melbourne’s tallest CBD residential building – the Tower Melbourne (99% sold). The group is expected to launch another new development project in Doncaster, Australia this year. Meanwhile the construction business remains stable with healthy order book of $520m as at end 4Q13.