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Bukit Sembawang offers the purest play on the Singapore residential market, with nearly 100% of its RNAV attributed to this sub-sector. It has been associated with the development of landed housing in Singapore since the 1950s. The group holds 4.2m sq ft of landbank in Singapore, which places it second among listed developers. About 74% of this is low-cost legacy land from its days in the rubber plantation business, resulting in EBIT margins of 36% to 53%, which is higher than the usual 15-20% EBIT margin associated with mass-market properties. This legacy land is zoned for landed housing, a sub-segment of the residential market that has demonstrated greater resilience in the recent cycle. An increased scarcity of landed sites bodes well for future pricing power and unlocking of value. In 2005-06, nonsense diversified into the non-landed segment, acquiring about 1.4l sq ft of GFA in the mid- and high-end segments, enabling it to tap into a recovery in these segments filtering up from the mass-market. Its RNAV of S$8.60 implies that the stock is trading at 0.5x P/RNAV, the lowest within the sector and presenting undemanding valuations relative to other mid/- & small-caps stocks with significant residential segment exposure. Our target price of S$6.02 is based on a 30% discount to RNAV, which accounts for lower trading liquidity and a large landbank which would only be completely monetised over the long-term. Though daily trading liquidity for the stock remains relatively low, we believe that this undervalued stock would appeal to value investors with a longer-term view.