12 August 2011

Chip Eng Seng's Net Profit drop 14%

Chip Eng Seng's Q2 profit dropped 14% as compared to last quarter. Reasons are the lack of contribution from the construction as well as property development. As I mentioned earlier, we should classify CES as property developer instead of construction company as the portion of the property development and the focus for CES are already in property development, especially after the executive chairman's daughter came back from Australia to help his father on his property development division.

As I mentioned earlier too, Mr. Kaw from Singapore is now trying his best to tame down the speculation of Singapore Property at this moment. However, I believe that he will loosen his housing policy after we see a slower growth in Singapore as well as the uncertainty of global economy in later stage.

Singapore private property, largely contributed by the foreigners, especially from three countries, namely China, Malaysia and Indonesia. As long as the economy of the three countries are doing well, then I believe that there is not a sharp drop in property price or market sentiment as this moment. I do believe that the selling progress for the luxury condo will be a bit slow down due to the 2nd home loan that only allows you to take up to 60%/70% of the property value and some of the home buyers are actually wanted to sell their current property and upgrade to a bigger size condo. Nonetheless, I sincerely hope that Singapore property can grow in a stable pace, given its global financial hub status and the stable political and strategic location in the Asia Pacific region.

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