DBS upgrades PropNex and APAC Realty to ‘buy’ amid strong pipeline of new launches in 2025
The recoil will mainly be generated by three primary variables: lower home loan fees; house owners, upgraders and permanent individuals acquiring homes for themselves; along with the intro of a wider variety of ventures with sturdy features.
” We anticipate a revive in general volumes in 2025, driven by new sales going back to [about] 8,000-8,500 units every year. This is supported by steady property costs, with fluctuations assumed in the range of +1% to +2%,” say Derek Tan and Tabitha Foo in both records dated Jan 6.
In 2025 to 2026, the analysts also see nonpublic resale transactions remaining “steady” at 13,500 to 14,000 units. Sell-through rates can average between 30% to 50% throughout debut weekends, which might support a gradual turnaround in profitability for both companies.
” We have moved the multiple towards +1 standard deviation (s.d.) (versus [a] five-year standard of 12 times), as the market and the company’s profitability are at an inflexion point,” the analysts write.” [PropNex’s] FY2025/FY2026 dividend yield of 7.7% (80% payout ratio) is attractive, with potential benefit if the group opts to distribute its cash reserves (16 cents per share) to investors.”
On The Other Hand, APAC Real estate’s new target rate stands for a higher P/E multiple of 13 times in line with its four-year historical standard on rolled-forward FY2025 earnings.
Their brand-new target cost for PropNex is secured to 15 times the firm’s P/E on rolled-forward and revised FY2025 earnings. PropNex’s FY2025 revenues quotes were decreased to represent lesser overall sales and margins assumptions.
DBS Group Research has improved its appeals on PropNex and APAC Realty to “acquire” from “hold” as both counters are tipped to gain from a sturdy pipeline of new release in 2025.
PropNex is the biggest property firm in Singapore with approximately 12,000 agents representing 34% of the nation’s market portion. APAC Real estate is one of the leading competitors in the real estate brokerage firm sector. It has a visibility in 17 Asia Pacific (APAC) countries and among the biggest brand footprints in Asia with its ERA franchise business organization.
an and Foo have boosted their target rate estimates for both PropNex and APAC Realty to $1.15 and 50 cents from 95 cents and 48 cents respectively.
” The group’s market share in private new sales and resale has increased to 56% -60%, significantly more than pre-pandemic ranks,” note Tan and Foo for PropNex specifically, adding that these amounts show that one in every 2 purchases is made by a PropNex representative. With this in mind, a prospective increase in market share as PropNex contributes to its sales force, would certainly provide upside potential to the analysts’ assessments.
