Hiap Hoe

Hiap Hoe has been dropping for weeks, but formed a nice reversal signal on 2 Jun, forming what is almost an \"abandoned baby\". RSI is showing highly oversold. MACD is just about to cross. That is to me, a very strong buy signal. Besides, as what sumer said, Hiap Hoe is fundamentally under-valued as well.

It was reported in BT today that UOL will be previewing its Toh Tuck condo called Terrene this weekend at $1,200-1,400 psf, with one bedders hitting $1,500psf and ground floor units closer to $1,000psf. Hiap Hoe has some remainder units (more than 70% sold) at its project The Beverly, which is just a stone’s throw away from Terrene. The preview of Terrene will hopefully bring potential buyers’ attention to The Beverly, which is a cheaper alternative. I believe The Beverly’s remainder units are still priced below $1,000psf. Meanwhile, Hiap Hoe has started piling works at Waterscape, which means it may start to book profits from this project this quarter. The company has sold about 70% of the units in this very profitable condo, and this means Waterscape will contribute substantially to Hiap Hoe’s quarterly results from here on. I am therefore expecting a substantial jump in Q2 revenue and profit compared to Q1, during which some mismatch of cost and revenue led to below-expectation figures. Q2 results were released last year on 11 August. That would be the estimated date for this year’s release as well.

Good omen for Hiap Hoe\'s \"The Beverly\", which is near Terrene and cheaper.

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More than 100 units of Terrene at Bukit Timah sold By Janice Teo | Posted: 15 July 2010 2049 hrs SINGAPORE : Property developer UOL Group has sold more than 100 units of its latest condominium project, Terrene at Bukit Timah. This is almost 80 per cent of the 130 units released at a private preview which started on July 8. UOL will be releasing the remaining 42 units for the official launch on Friday. The 999-year leasehold condominium is a 50-50 joint venture between UOL and La Salle Asia Investment Management. The apartments are priced at an average of S$1,250 per square foot for a typical unit. They range from S$719,000 for a one-bedroom unit to S$2.79 million for a five-bedroom penthouse. UOL said 23 of the 30 penthouse units have been sold. Demand came mainly from Singaporean buyers, with majority from private homes in the nearby vicinity. The five-storey development of 172 units, stretches across more than 130,000 square feet near the Bukit Timah Nature Reserve. The development is expected to be ready by April 2014. - CNA /ls

Insider buying:
1. Date of change of Shareholding 19-08-2010
2. Name of Registered Holder Teo Ho Beng
3. Circumstance(s) giving rise to the interest or change in interest Open Market Purchase # Please specify details Purchased 37,000 ordinary shares at $0.41 per share.
4. Information relating to shares held in the name of the Registered Holder No. of Shares held before the change 1,993,750 As a percentage of issued share capital 0.422 % No. of Shares which are subject of this notice 37,000 As a percentage of issued share capital 0.0078 % Amount of consideration (excluding brokerage and stamp duties) per share paid or received 0.41 No. of Shares held after the change 2,030,750 As a percentage of issued share capital 0.430 %

Hiap Hoe resumed share buyback yesterday, with 200,000 shares bought at 39cts. CEO Teo Ho Beng also bought 37,000 shares recently at 41cts. This is a show of confidence in the fundamentals of the company.
 
In view of the govt measures to cool the property market, however, Hiap Hoe has fallen in line with the rest of the property stocks.
 
Nevertheless, Hiap Hoe should outperform in view of the pre-sales it has already garnered for its Waterscape and Skyline 360 projects and the "hidden" value of its hotels/commercial space asset at Zhongshan Park (land bought at dirt cheap price).
 
At the current price of 38.5cts, stock is trading at about 50-60% discount to RNAV. Co's results for next few quarters could be catalyst of a rebound.
 
 

Hiap Hoe is due to report Q3 results on next Tuesday, 9 Nov. This could be the first quarter it starts to book the big profits from its 2 crown projects - Waterscape and Skyline 360. Previously, it had booked expenses incurred for these projects (eg, marketing costs) but did not book profits, which led to the lower than expected profits for the last 2 quarters. Construction at Skyline has reached 8th level and the building structure is beginning to look distinctively different and nice. Construction at Waterscape and its Zhongshan Park have also commenced.
 
Meanwhile, the company has recently sold one of the 3 penthouses at Skyline for $8.4m, or $2,141psf. It also sold a 4 bedder at a high $2,252psf ($4.8m). It seems that Hiap Hoe is selling the remainder units at Skyline at higher psf, and hence my projected profits for this project may have to be adjusted upwards. A few units of the harder to sell penthouses at The Beverly have also been sold in recent months.
 
BT reported today that CDL has sold 75% of the 150 units at its Glyndebourne project in Balmoral at an average price of $2,100psf. Hopefully this means that this market sector, of which Waterscape and Skyline belong to, is seeing renewed interest and perhaps the remainder units at Hiap Hoe's 2 projects (about 70% and 45% sold so far) will be sold soon.
 
Chartwise, the stock price looks like breaking out of a downward sloping resistance line. Kim Eng said last Friday that candlesticks suggest a breakout in the near term if a breach of 45/45.5cts occur  on strong volume. It says next resistance is then at 49.5cts.