The following content was first posted in our forum thread Chip Eng Seng by Sumer, who is regarded as the property guru in the forum.
CHIP ENG SENG's Q3 gross profit of $93.3 m came from Belvia (lump sum) plus 9 Residences and Junction 9 and sale of remainder units (no mention of Fulcrum).
This is a pretty big figure, but as no breakdown was given, I can’t tell exactly where it came from. However, my gross profit estimate for Belvia was only $52.8m. That leaves $40.5m for the rest (including construction), which is highly unlikely.
In other words, I probably underestimated profit for Belvia, which is good.
Q3 share of profit from associates amounted to $7.9m, which came from remaining share of profit from Belysa. This brings total share of profit from Belysa to about $16.4m (Q2 $8.5m) which is very close to my own estimate of $16.2m.
There are some paper losses due to weakening Aussie dollar. This forex risk is to be expected as the co ventures overseas. Not a big concern.
9M earnings is now $113.1m or EPS of 17.7 ct. NAV surged to nearly 91ct.
My forecast for Q4: gross profit from Alexandra Central could come in at $145m, and another $15m perhaps from other projects/construction. Total: $160m.
Net profit (assuming 17% tax rate) would be about $133m or EPS of 20.5ct.
Full year net earnings will therefore hit $246m or 38.2ct, giving the stock a PE of 2.3X. NAV should rise to above $1.10.
Meanwhile, I have seen an ad for a project manager for its Melaka land. Final approval for this land purchase, however, has not been received.
Recent story: CHIP ENG SENG -- Strong share buyback ahead of FY14 bumper earnings