EARLY last week, we released an update on Hiap Hoe Ltd, a developer that has built up a low-cost landbank in the prime residential districts and is in the midst of developing a 421,000 square feet gross floor area joint venture commercial site at Zhongshan Park along Balestier Road. Hiap Hoe has chalked up $400 million of progress billings that would be recognised over the next two to three years. We have worked out an RNAV/share of $1.22 for the stock and set a target price of 61 cents.
Interestingly, two days after our report, the local media highlighted a family feud between the founder of Hiap Hoe Ltd, Teo Guan Seng, and his children from various marriages. Mr Teo apparently wants to wind up the privately held company, Hiap Hoe Holdings, that holds a 70 per cent stake in publicly listed Hiap Hoe Ltd and Superbowl Ltd and distribute its assets to shareholders. This has led the media to speculate on possible takeover plays for the two companies and Hiap Hoe's stock price shot up to a high of 53 cents before settling at 51 cents last Friday. Without knowing the exact shareholding held by the individual family members of Hiap Hoe Holdings and pending further development, it is premature to speculate on any takeover plays, in our view. We continue to see value in the stock and maintain our 'buy' recommendation.
BUY
BUY
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