DBS upgrades PropNex and APAC Realty to ‘buy’ amid strong pipeline of new launches in 2025
PropNex is the biggest real estate agency in Singapore with around 12,000 agents accounting for 34% of the nation’s market share. APAC Realty is one of the leading competitors in the realty brokerage firm industry. It has a visibility in 17 Asia Pacific (APAC) places and among the biggest company presences in Asia with its ERA franchise network.
Their brand-new target price for PropNex is fixed to 15 times the company’s P/E on rolled-forward and revised FY2025 profits. PropNex’s FY2025 incomes quotes were lowered to represent lower overall sales and margins assumptions.
In 2025 to 2026, the analysts also see nonpublic resale purchases continuing to be “secure” at 13,500 to 14,000 units. Sell-through rates could average between 30% to 50% throughout release week ends, that might support a continuous turn-around in earnings for both companies.
DBS Group Research has actually upgraded its claims on PropNex and APAC Real estate to “buy” from “hold” as both counters are tipped to gain from a sturdy pipeline of new release in 2025.
The rebound will mainly be pushed by 3 primary aspects: lower home loan fees; homeowners, upgraders and permanent residents getting homes on their own; along with the introduction of a wider variety of projects with solid traits.
an and Foo have increased their target cost estimates for both PropNex and APAC Realty to $1.15 and 50 cents from 95 cents and 48 cents specifically.
” We have moved the multiple towards +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 factor,” the analysts compose.” [PropNex’s] FY2025/FY2026 dividend return of 7.7% (80% payment ratio) is appealing, with potential benefit if the group opts to disperse its cash reservations (16 cents per share) to investors.”
” The group’s industry share in discreet new sales and resale has actually boosted to 56% -60%, considerably greater than pre-pandemic stages,” note Tan and Foo for PropNex especially, including that these figures indicate that one in every 2 sales is made by a PropNex broker. With this in mind, a potential increase in market share as PropNex contributes to its sales force, would provide upside potential to the experts’ quotes.
At The Same Time, APAC Realty’s new target price represents a higher P/E multiple of 13 times in line with its four-year historical standard on rolled-forward FY2025 profits.
” We expect a revive in overall volumes in 2025, driven by new sales going back to [near] 8,000-8,500 units every year. This is sustained by stable property costs, with variations anticipated in the series of +1% to +2%,” claim Derek Tan and Tabitha Foo in both reports dated Jan 6.
