SGX:C29

Stock Analysis Report

Executive Summary

Chip Eng Seng Corporation Ltd, an investment holding company, engages in the construction, property development and investment, and hospitality businesses primarily in Singapore, Australia, Malaysia, and Maldives.

Rewards

Trading at 24.1% below its fair value

Pays a high and reliable dividend of 6.45%

Risk Analysis

Earnings are forecast to decline by an average of -28.3% per year for the next 3 years

Interest payments are not well covered by earnings



Snowflake Analysis

Undervalued established dividend payer.

Share Price & News

How has Chip Eng Seng's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: C29 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-0.8%

C29

-1.0%

SG Real Estate

-0.3%

SG Market


1 Year Return

-11.5%

C29

-0.2%

SG Real Estate

2.1%

SG Market

Return vs Industry: C29 underperformed the SG Real Estate industry which returned 1.1% over the past year.

Return vs Market: C29 underperformed the SG Market which returned 2.1% over the past year.


Shareholder returns

C29IndustryMarket
7 Day-0.8%-1.0%-0.3%
30 Day0%1.6%1.4%
90 Day-1.6%3.7%2.8%
1 Year-6.7%-11.5%2.9%-0.2%6.3%2.1%
3 Year8.2%-6.8%5.7%-2.7%14.9%2.6%
5 Year-10.7%-32.0%-2.9%-15.3%11.1%-7.4%

Price Volatility Vs. Market

How volatile is Chip Eng Seng's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Chip Eng Seng undervalued compared to its fair value and its price relative to the market?

24.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: C29 (SGD0.62) is trading below our estimate of fair value (SGD0.82)

Significantly Below Fair Value: C29 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: C29 is good value based on its PE Ratio (8.4x) compared to the Real Estate industry average (10.3x).

PE vs Market: C29 is good value based on its PE Ratio (8.4x) compared to the SG market (13.5x).


Price to Earnings Growth Ratio

PEG Ratio: C29's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: C29 is good value based on its PB Ratio (0.5x) compared to the SG Real Estate industry average (0.5x).


Next Steps

Future Growth

How is Chip Eng Seng forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

-28.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: C29's earnings are forecast to decline over the next 3 years (-28.3% per year).

Earnings vs Market: C29's earnings are forecast to decline over the next 3 years (-28.3% per year).

High Growth Earnings: C29's earnings are forecast to decline over the next 3 years.

Revenue vs Market: C29's revenue is expected to decline over the next 3 years (-20.2% per year).

High Growth Revenue: C29's revenue is forecast to decline over the next 3 years (-20.2% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if C29's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Chip Eng Seng performed over the past 5 years?

-42.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: C29 has high quality earnings.

Growing Profit Margin: C29's current net profit margins (4.3%) are lower than last year (4.9%).


Past Earnings Growth Analysis

Earnings Trend: C29's earnings have declined by -42% per year over the past 5 years.

Accelerating Growth: C29's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: C29 had negative earnings growth (-7.2%) over the past year, making it difficult to compare to the Real Estate industry average (-7.2%).


Return on Equity

High ROE: C29's Return on Equity (5.8%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Chip Eng Seng's financial position?


Financial Position Analysis

Short Term Liabilities: C29's short term assets (SGD2.3B) exceed its short term liabilities (SGD260.5M).

Long Term Liabilities: C29's short term assets (SGD2.3B) exceed its long term liabilities (SGD2.0B).


Debt to Equity History and Analysis

Debt Level: C29's debt to equity ratio (236.4%) is considered high.

Reducing Debt: C29's debt to equity ratio has increased from 102.2% to 236.4% over the past 5 years.

Debt Coverage: C29's debt is not well covered by operating cash flow (5.6%).

Interest Coverage: C29's interest payments on its debt are not well covered by EBIT (2x coverage).


Balance Sheet

Inventory Level: C29 has a high level of physical assets or inventory.

Debt Coverage by Assets: C29's debt is covered by short term assets (assets are 1.2x debt).


Next Steps

Dividend

What is Chip Eng Seng's current dividend yield, its reliability and sustainability?

6.50%

Current Dividend Yield


Dividend Yield vs Market

company6.5%marketbottom25%2.4%markettop25%5.5%industryaverage3.1%forecastin3Years6.5%

Current dividend yield vs market & industry

Notable Dividend: C29's dividend (6.45%) is higher than the bottom 25% of dividend payers in the SG market (2.5%).

High Dividend: C29's dividend (6.45%) is in the top 25% of dividend payers in the SG market (5.41%)


Stability and Growth of Payments

Stable Dividend: C29's dividends per share have been stable in the past 10 years.

Growing Dividend: C29's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (53.9%), C29's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

What is the CEO of Chip Eng Seng's salary, the management and board of directors tenure and is there insider trading?

2.4yrs

Average management tenure


CEO

Raymond Chia (54yo)

3.9yrs

Tenure

0

Mr. Chia Lee Meng, also known as Raymond, PBM, served as Executive Chairman of Chip Eng Seng Corporation Ltd from May 5, 2016 to October 11, 2018 and has been its Chief Executive Officer and Executive Dire ...


Management Age and Tenure

2.4yrs

Average Tenure

55yo

Average Age

Experienced Management: C29's management team is considered experienced (2.4 years average tenure).


Board Age and Tenure

1.3yrs

Average Tenure

62yo

Average Age

Experienced Board: C29's board of directors are not considered experienced ( 1.3 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyS$72,795,16421 Oct 19
Celine Tang
EntityIndividual
Role
Chairman of the Board
Non-Executive Chairman
Shares115,547,903
Max PriceS$0.63
BuyS$2,708,68421 Oct 19
Senz Holdings Limited
EntityCompany
Shares4,299,500
Max PriceS$0.63
BuyS$1,752,18721 Oct 19
Lee Meng Chia
EntityIndividual
Role
Chief Executive Officer
Group CEO & Executive Director
Shares2,781,250
Max PriceS$0.63
BuyS$1,528,06521 Oct 19
Sock Lim
EntityIndividual
Shares2,425,500
Max PriceS$0.63
SellS$72,45004 Apr 19
Wai Han Lock
EntityIndividual
Role
Member of the Board of Directors
Independent & Non-Executive Director
Shares90,000
Max PriceS$0.80

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Siang Thong Yeo (56yo)

    Managing Director of Construction Division

    • Tenure: 2.4yrs
  • Raymond Chia (54yo)

    Group CEO & Executive Director

    • Tenure: 3.9yrs
  • Cheong Yan Law (48yo)

    Chief Financial Officer

    • Tenure: 6.4yrs
  • Tee How Tan (60yo)

    Executive Director

    • Tenure: 1.9yrs
  • Gin Goh

    Senior Legal Counsel & Company Secretary

    • Shaw Leong Yoong

      Managing Director of Precast Division

      • Tenure: 1.8yrs
    • Joanne Goh

      General Manager of Marketing

      • Thiam Koh

        Senior Vice President

        • Kang Ang

          Chief Human Resource Officer

          • Lui Kathryn

            Senior Vice President


            Board Members

            • Abdul Jabbar Bin Karam Din

              Independent Director

              • Tenure: 1.9yrs
            • Teck Seng Low (64yo)

              Independent Non-Executive Director

              • Tenure: 0.08yrs
            • Boon Siong Neo (62yo)

              Independent Non-Executive Director

              • Tenure: 0.08yrs
            • Raymond Chia (54yo)

              Group CEO & Executive Director

              • Tenure: 3.9yrs
            • Mong Seng Ang (70yo)

              Lead Independent Director

              • Tenure: 4.2yrs
            • Wai Han Lock (51yo)

              Independent & Non-Executive Director

              • Tenure: 1.3yrs
            • Serena Tang

              Non-Executive Chairman

              • Tenure: 1.3yrs
            • Tee How Tan (60yo)

              Executive Director

              • Tenure: 1.9yrs
            • Ah Mee Yam (62yo)

              Non-Independent & Non-Executive Director

              • Tenure: 0.08yrs

            Company Information

            Chip Eng Seng Corporation Ltd's company bio, employee growth, exchange listings and data sources


            Key Information

            • Name: Chip Eng Seng Corporation Ltd
            • Ticker: C29
            • Exchange: SGX
            • Founded: 1998
            • Industry: Real Estate Development
            • Sector: Real Estate
            • Market Cap: S$481.556m
            • Shares outstanding: 783.02m
            • Website: https://www.chipengseng.com.sg

            Location

            • Chip Eng Seng Corporation Ltd
            • No. 12-01, CES Centre
            • 171 Chin Swee Road
            • Singapore
            • 169877
            • Singapore

            Listings

            TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
            C29SGX (Singapore Exchange)YesOrdinary SharesSGSGDNov 1999
            QK5BST (Boerse-Stuttgart)YesOrdinary SharesDEEURNov 1999

            Biography

            Chip Eng Seng Corporation Ltd, an investment holding company, engages in the construction, property development and investment, and hospitality businesses primarily in Singapore, Australia, Malaysia, and Maldives. The company operates through Construction, Property Developments, Property Investments, Hospitality, and Corporate and Others segments. The company constructs public housing projects, condominiums, executive condominiums, modular buildings, and industrial and commercial projects; develops residential, commercial, and industrial properties, as well as manages development projects; and provides real estate management and consultancy services. It also leases investment properties, such as shophouses, office buildings, and industrial properties; operates hotels and island resort; and invests in marketable securities. In addition, the company acts as general building contractor; manufactures and trades in precast products; and provides general building engineering, financial, and treasury services. Further, the company operates Repton-brand pre-school center in Singapore. Chip Eng Seng Corporation Ltd was incorporated in 1998 and is headquartered in Singapore. 


            Company Analysis and Financial Data Status

            All financial data provided by Standard & Poor's Capital IQ.
            DataLast Updated (UTC time)
            Company Analysis2020/01/22 12:34
            End of Day Share Price2020/01/22 00:00
            Earnings2019/09/30
            Annual Earnings2018/12/31


            Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.