DBS upgrades PropNex and APAC Realty to ‘buy’ amid strong pipeline of new launches in 2025
The recoil will greatly be driven by three primary variables: reduced mortgage prices; homeowners, upgraders and long-term people buying homes on their own; in addition to the intro of a wider variety of projects with solid attributes.
Their new target cost for PropNex is pegged to 15 times the business’s P/E on rolled-forward and changed FY2025 profits. PropNex’s FY2025 revenues quotes were decreased to represent lesser overall sales and margins assumptions.
an and Foo have increased their target cost quotes for both PropNex and APAC Realty to $1.15 and 50 cents from 95 cents and 48 cents respectively.
” We have actually transferred the multiple towards +1 standard deviation (s.d.) (versus [a] five-year average of 12 times), as the marketplace and the business’s profitability are at an inflexion factor,” the experts publish.” [PropNex’s] FY2025/FY2026 dividend return of 7.7% (80% payment percentage) is attractive, with potential benefit if the group chooses to disperse its cash money reservations (16 cents per share) to shareholders.”
” We expect a rebound in general quantities in 2025, steered by new sales going back to [around] 8,000-8,500 units every year. This is supported by stable property costs, with fluctuations anticipated in the range of +1% to +2%,” claim Derek Tan and Tabitha Foo in both records dated Jan 6.
” The group’s market share in private new sales and resale has enhanced to 56% -60%, considerably more than pre-pandemic levels,” note Tan and Foo for PropNex particularly, including that these figures indicate that one in every 2 purchases is made by a PropNex broker. With this in mind, a possible surge in market share as PropNex contributes to its sales force, would certainly present upside potential to the analysts’ estimations.
PropNex is the leading property firm in Singapore with approximately 12,000 brokers accounting for 34% of the nation’s market share. APAC Realty is just one of the leading players in the real estate brokerage industry. It has a presence in 17 Asia Pacific (APAC) places and one of the biggest label presences in Asia through its ERA franchise network.
At The Same Time, APAC Realty’s brand-new target rate stands for a greater P/E multiple of 13 times in line with its four-year historical standard on rolled-forward FY2025 earnings.
In 2025 to 2026, the analysts also see private resale transactions continuing to be “stable” at 13,500 to 14,000 units. Sell-through rates could average between 30% to 50% during release weekends, which could assist a gradual turnaround in success for both agencies.
DBS Group Research has actually improved its appeals on PropNex and APAC Realty to “buy” from “hold” as both counters are tipped to gain from a sturdy pipeline of new launches in 2025.
