Three cheers for Chip Eng Seng! Shares of the property developer has been in splendid form since May when Singapore lifted its border restrictions and eased most of the public health measures. Year-to-date, Chip Eng Seng share price rocketed 70%. In contrast, many SGX stocks have been in sluggish forms following the fallout from US Federal interest rate hikes and the on-going Russian-Ukraine war. Against this backdrop, the supersonic form of Chip Eng Seng is certainly eye-catching.
The recent revival of Chip Eng Seng must be surreal for investors. After all, the past two years had been an absolute nightmare for the property developer due to the pandemic. Losses after tax in 2021 amounted to $21.6 million while losses in 2020 amounted to a whopping $78.5 million. However, the Group managed to achieve an impressive turnaround by clocking in net profit of $38.5 million in the first half of 2022. Talk about light at end of tunnel!
This article was requested by an SG Wealth Builder member. On a personal front, I have some affinity with Chip Eng Seng as my late father used to be one of their sub-contractors transporting sands to their construction projects about 30 years ago. The Group started off as a construction company in 1960s. By 1980s, Chip Eng Seng has completed a number of HDB projects and began to venture into property development. By 2000, Chip Eng Seng actively acquired sites and entered into joint ventures for property development and commercial property investments.
The Group currently has five core businesses in property development, construction, hospitality, property Investment, and education, with business presence in 15 countries. With market capitalization of $585 million, Chip Eng Seng is considered a mid-tier property developer. While Chip Eng Seng is not in the league of CapitaLand, City Development and Hong Kong Land, I like the fact that it is a homegrown company that boosts a stellar board of directors – Mr Yam Ah Mee (former CEO of LTA), Mr Tan Tee How (former CEO of IRAS) and Prof Yaacob bin Ibrahim (former Minister for Environment and Water Resources).
Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. Furthermore, I am not vested and have never invested in Chip Eng Seng before. Whether Chip Eng Seng share price will surge or collapse has no impact on me. Thus, this article is not meant to induce readers to make any form of investment decisions.
Chip Eng Seng ambushed by non-core businesses
The turnaround for Chip Eng Seng is largely attributed to the [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]
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