Point: In the recent property upcycle, many construction
companies have diversified into property development, in a synergistic model similar to what Sim Lian adopts. However, the advantage Sim Lian has is that compared to some of these newer construction companies, it acquired
land earlier in the cycle and continued to focus on the mass-market – trading mass-market sales stability for potentially higher margins in higher-end projects – plus it had gone through the 2001-03 downcycle when it first
entered the property development game. Going forward, however, the physical market outlook is cloudy even for the mass-market segment as Singapore faces a potential recession in 2009, possibly dampening domestic demand.

HOLD S$0.265
Price Target : 12-Month S$ 0.29
Reason for Report : Re-initiating Coverage
Potential Catalyst: Pick-up in mass-market activity