Proposed first & final dividend of S$0.0075 ? Chip Eng Seng proposed a one-tier tax-exempt first and final dividend of S$0.0075 per share, in line with our expectation, for shareholders' approval at the forthcoming annual general meeting. At the last transacted price of S$0.17, dividend yield works out to 4.4%.

Property development & construction projects on schedule ? We understand from management that the Group's construction as well as property development projects are on track for delivery. Pinnacle@Duxton is expected to be 100% recognized in FY09F while Queenstown and Seng Kang HDB projects are expected to be recognized progressively to achieve approximately 50% completion in FY09, accounting for approximately 45% of our forecasted FY09F construction revenue. On property development front, we expect cash level to increase by approximately S$40~45m to approximately S$87.9~92.9m with Devonshire Suites@Central, the Group's 40% joint venture development project with Keppel Land, which obtained TOP in Feb 09. We understand from management that the 157 units will be handed over to buyers in phases.

S$60m MTN due on 9 April 2009 likely to have been resolved ? Given that Chip Eng Seng proposed for a dividend payout of S$0.0075 per share, we believe financing issues relating to the S$60m Medium Term Note ("MTN") has been sorted out. Chip Eng Seng is expected to repay MTN using proceeds from Devonshire Suites@Central project. However, we believe these proceeds are unlikely to reach Chip Eng Seng before the 9 April 2009, due date of the MTN, indicating a time gap which we believe is likely to be bridged by some short term loans.

Maintain BUY recommendation with price target of S$0.29. We maintain our earnings forecast and continue to use sum-of-the-parts valuation methodology to value its property development and construction business. We have revalued all of the Group's unsold development projects at lower than recently transacted price to assume 100% sales in current market and continued to value construction business at 3x FY09F construction earnings. We maintain our 40% discount factor to SOTP valuation, deriving our target price of S$0.29. Based on last transacted price of S$0.165, Chip Eng Seng is currently trading at 0.5x FY09F P/B.