DBS upgrades PropNex and APAC Realty to ‘buy’ amid strong pipeline of new launches in 2025
PropNex is the leading property agency in Singapore with about 12,000 representatives making up 34% of the nation’s market share. APAC Realty is among the leading competitors in the realty broker agent industry. It has a presence in 17 Asia Pacific (APAC) nations and among the largest brand footprints in Asia via its ERA franchise affiliate.
” We have transferred the multiple in the direction of +1 standard deviation (s.d.) (versus [a] five-year standard of 12 times), as the marketplace and the firm’s profitability are at an inflexion factor,” the analysts write.” [PropNex’s] FY2025/FY2026 dividend yield of 7.7% (80% payout ratio) is attractive, with potential benefit if the group chooses to distribute its cash money reserves (16 cents per share) to stockholders.”
The recoil will largely be driven by 3 main variables: lower home loan fees; property owners, upgraders and long-term people getting homes for themselves; as well as the intro of a wider array of projects with sturdy attributes.
” We expect a revive in overall volumes in 2025, steered by new sales going back to [around] 8,000-8,500 units each year. This is sustained by steady property rates, with changes anticipated in the range of +1% to +2%,” say Derek Tan and Tabitha Foo in both reports dated Jan 6.
In 2025 to 2026, the analysts also see private resell purchases standing “stable” at 13,500 to 14,000 units. Sell-through rates could average between 30% to 50% during debut week ends, which can support a continuous turn-around in success for both firms.
Their new target cost for PropNex is pegged to 15 times the firm’s P/E on rolled-forward and modified FY2025 profits. PropNex’s FY2025 earnings estimates were lowered to account for lower total sales and margins assumptions.
DBS Group Research has improved its claims on PropNex and APAC Realty to “acquire” from “hold” as both counters are tipped to take advantage of a strong pipeline of new launches in 2025.
At The Same Time, APAC Real estate’s brand-new target price represents a greater P/E multiple of 13 times in line with its four-year historical average on rolled-forward FY2025 incomes.
an and Foo have actually increased their target rate quotes for both PropNex and APAC Real Estate to $1.15 and 50 cents from 95 cents and 48 cents respectively.
” The group’s market share in discreet new sales and resale has enhanced to 56% -60%, considerably greater than pre-pandemic levels,” note Tan and Foo for PropNex particularly, including that these amounts indicate that one in every 2 purchases is made by a PropNex representative. With this in mind, a prospective raise in market share as PropNex contributes to its sales force, would present upside potential to the experts’ assessments.
