CashBench Forecast for SGX Property Stocks

Despite the pessimism over the economy and frequent calls by analysts to “sell into strength” and take short-term views, are there any shares really worth investing in the Singapore property sector for 2009?

It is no secret that the Singapore stock market has fallen over the cliff for the past one year. Of course, it’s not just Singapore but just about everywhere else. Many investors are jittery and are staying clear of the stock market. But surely, there must be some shares that have fallen too much and deserves a second look.

The last place we should start with is the property market, but even the property sector has shares that deserves your attention!

Stock	Share Price	EPS	P/E
Allgreen	0.45	0.28	1.60
Bonvests	0.58	0.43	1.36
Bukit Sembawang	3.80	0.65	5.82
Capitaland	2.38	0.45	5.33
City Dev	5.35	0.79	6.79
Heeton	0.16	0.04	4.46
Ho Bee	0.34	0.16	2.08
Keppel Land	1.36	0.32	4.31
MCL Land	0.62	0.32	1.95
Orchard Parade	0.62	0.13	4.91
SC Global	0.49	0.12	4.03
UOL Group	1.93	0.75	2.59
Yanlord	0.91	0.16	5.71

The table above lists 13 of the property related stocks on the Singapore exchange with their closing share price on 5 Feb 2009 and the latest earnings per share (EPS) and price-to-earnings ratio based on financial results over the past 12 months. Of course, the limelight is on Capitaland right now because of its rights issue announced on 9 Feb, causing a small surge in its share price, but where's the real bargain?

“… Bonvests is the best buy because it has the lowest P/E of 1.36? NOT TRUE!”

For beginning investors, FundSuperMart.com has a webcast introducing the P/E ratio. It’s really good if you have no idea what the P/E ratio is, but please do not follow the “chicken and eggs” example completely and come to the conclusion that Bonvests is the best buy because it has the lowest P/E of 1.36? NOT TRUE!

“... Focus on two stocks - Allgreen and Ho Bee”

Instead, CashBench has done a valuation for you and recommends that you just focus on two stocks – Allgreen Properties and Ho Bee.

Stock	Current Price	Price Target
Allgreen	$0.46	$0.85
Ho Bee	$0.355	$0.63

The CashBench recommendation is based on the current growth potential and risks for these two companies after taking into consideration the performance of their peers in the property sector.

Both has residential developments in Singapore. Allgreen’s current projects include Blossoms off Upper Serangoon Road, and One Devonshire in the future. Ho Bee is known for its Sentosa Cove projects such as Coral Island, Paradise Island, Seascape and the Pinnacle Collection. While sales will certainly be less forthcoming in the foreseeable future, these two companies deserves a higher share price.

Allgreen has fallen 66% since the past year, while Ho Bee has dropped 75% over the same period. These shares has been oversold based on CashBench’s valuations. Both should re-bound within the next 12 months to 2 years, barring any unforeseen bad news. This CashBench forecast is not for you if you are not able to hold onto these counters for that long. In this challenging period, be sure you have at least 6 months of buffer cash in case you lose your job. If you still have spare cash leftover, these are attractive shares for you to consider.