DBS upgrades PropNex and APAC Realty to ‘buy’ amid strong pipeline of new launches in 2025
In 2025 to 2026, the analysts also see private resell sales remaining “secure” at 13,500 to 14,000 units. Sell-through rates could average between 30% to 50% throughout launch weekends, which could sustain a continuous turn-around in earnings for both companies.
” The group’s industry share in private new sales and resale has raised to 56% -60%, significantly higher than pre-pandemic stages,” note Tan and Foo for PropNex specifically, including that these figures show that one in every 2 sales is made by a PropNex agent. With this in mind, a possible surge in market share as PropNex contributes to its sales force, would offer upside potential to the experts’ estimations.
The recoil will greatly be pushed by three main factors: reduced mortgage fees; house owners, upgraders and permanent people purchasing homes for themselves; as well as the introduction of a wider array of projects with solid attributes.
Tan and Foo have increased their target rate quotes for both PropNex and APAC Real Estate to $1.15 and 50 cents from 95 cents and 48 cents specifically.
” We have moved the multiple in the direction of +1 standard deviation (s.d.) (versus [a] five-year standard of 12 times), as the market and the firm’s profitability are at an inflexion point,” the analysts compose.” [PropNex’s] FY2025/FY2026 dividend return of 7.7% (80% payout percentage) is attractive, with potential upside if the group decides to allocate its cash reserves (16 cents per share) to investors.”
” We anticipate a bounce back in total quantities in 2025, steered by new sales returning to [around] 8,000-8,500 units each year. This is sustained by stable property prices, with fluctuations expected in the range of +1% to +2%,” claim Derek Tan and Tabitha Foo in both records dated Jan 6.
On The Other Hand, 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 revenues.
DBS Group Research has actually enhanced its appeals on PropNex and APAC Real estate to “buy” from “hold” as both counters are tipped to take advantage of a strong pipeline of new launches in 2025.
PropNex is the biggest property agency in Singapore with around 12,000 representatives representing 34% of the country’s market share. APAC Real estate is just one of the top competitors in the property broker agent industry. It has a visibility in 17 Asia Pacific (APAC) places and one of the largest label presences in Asia via its ERA franchise business affiliate.
Their brand-new target rate for PropNex is pegged to 15 times the company’s P/E on rolled-forward and modified FY2025 profits. PropNex’s FY2025 incomes quotes were reduced to represent lesser total sales and margins presumptions.
