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 purchases remaining “secure” at 13,500 to 14,000 units. Sell-through rates can average between 30% to 50% during launch week ends, that can sustain a continuous turn-around in profitability for both agencies.
Their new target cost for PropNex is pegged to 15 times the firm’s P/E on rolled-forward and revised FY2025 earnings. PropNex’s FY2025 revenues estimates were decreased to account for lower total sales and margins assumptions.
” We anticipate a revive in overall volumes in 2025, driven by brand-new sales returning to [about] 8,000-8,500 units annually. This is assisted 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 industry share in private new sales and resale has boosted to 56% -60%, considerably greater than pre-pandemic levels,” note Tan and Foo for PropNex especially, adding that these amounts show that one in every 2 purchases is made by a PropNex representative. With this in mind, a possible increase in market share as PropNex adds to its sales force, would provide upside potential to the analysts’ quotes.
DBS Group Research has actually improved its appeals on PropNex and APAC Realty to “get” from “hold” as both counters are tipped to take advantage of a strong pipeline of brand-new release in 2025.
an and Foo have raised their target price estimates for both PropNex and APAC Realty to $1.15 and 50 cents from 95 cents and 48 cents specifically.
At The Same Time, APAC Realty’s new target cost represents a higher P/E multiple of 13 times in line with its four-year historical standard on rolled-forward FY2025 incomes.
PropNex is the biggest real estate agency in Singapore with about 12,000 agents accounting for 34% of the country’s market share. APAC Real estate is among the top competitors in the property brokerage market. It has a visibility in 17 Asia Pacific (APAC) places and one of the biggest company footprints in Asia through its ERA franchise business network.
” We have actually moved the multiple in the direction of +1 standard deviation (s.d.) (versus [a] five-year average of 12 times), as the market and the business’s profitability are at an inflexion point,” the analysts compose.” [PropNex’s] FY2025/FY2026 dividend turnout of 7.7% (80% payment percentage) is appealing, with potential upside if the group opts to allocate its money reserves (16 cents per share) to stockholders.”
The recoil will mostly be generated by three main aspects: lower home mortgage fees; property owners, upgraders and permanent residents buying homes on their own; along with the intro of a wider selection of projects with sturdy qualities.
