DBS upgrades PropNex and APAC Realty to ‘buy’ amid strong pipeline of new launches in 2025
DBS Group Research has actually enhanced its claims on PropNex and APAC Realty to “get” from “hold” as both counters are tipped to gain from a strong pipeline of brand-new launches in 2025.
” We have moved 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 go to an inflexion point,” the experts compose.” [PropNex’s] FY2025/FY2026 dividend yield of 7.7% (80% payout percentage) is appealing, with potential upside if the group chooses to allocate its cash reserves (16 cents per share) to shareholders.”
” The group’s market share in discreet new sales and resale has increased to 56% -60%, considerably greater than pre-pandemic stages,” note Tan and Foo for PropNex especially, adding that these amounts indicate that one in every 2 deals is made by a PropNex broker. With this in mind, a potential surge in market share as PropNex contributes to its sales force, would offer upside potential to the analysts’ assessments.
At The Same Time, APAC Real estate’s brand-new target cost stands for a greater P/E multiple of 13 times in line with its four-year historical standard on rolled-forward FY2025 incomes.
” We anticipate a rebound in overall quantities in 2025, steered by new sales returning to [around] 8,000-8,500 units every year. This is sustained by steady property prices, with changes expected in the range of +1% to +2%,” claim Derek Tan and Tabitha Foo in both reports dated Jan 6.
an and Foo have actually enhanced their target price estimates for both PropNex and APAC Real Estate to $1.15 and 50 cents from 95 cents and 48 cents respectively.
The recoil will largely be pushed by three major variables: reduced mortgage fees; homeowners, upgraders and long-term individuals getting homes for themselves; in addition to the introduction of a wider variety of projects with strong qualities.
Their new target rate for PropNex is pegged to 15 times the company’s P/E on rolled-forward and changed FY2025 revenues. PropNex’s FY2025 earnings quotes were lowered to make up lesser overall sales and margins presumptions.
In 2025 to 2026, the analysts also see nonpublic resell transactions standing “secure” at 13,500 to 14,000 units. Sell-through rates can average between 30% to 50% throughout launch week ends, which can support a continuous turn-around in earnings for both firms.
PropNex is the largest real property company in Singapore with around 12,000 agents accounting for 34% of the country’s market portion. APAC Real estate is one of the major players in the realty brokerage sector. It has a presence in 17 Asia Pacific (APAC) places and one of the largest company presences in Asia via its ERA franchise business affiliate.
