DBS upgrades PropNex and APAC Realty to ‘buy’ amid strong pipeline of new launches in 2025
The recoil will mainly be driven by 3 main aspects: lower mortgage rates; homeowners, upgraders and long-term people acquiring homes for themselves; in addition to the intro of a wider selection of ventures with solid features.
Their brand-new target cost for PropNex is fixed to 15 times the firm’s P/E on rolled-forward and modified FY2025 incomes. PropNex’s FY2025 profits price quotes were lowered to make up lesser entire sales and margins presumptions.
On The Other Hand, APAC Real estate’s new target cost represents a greater P/E multiple of 13 times in line with its four-year historical average on rolled-forward FY2025 profits.
” We foresee a bounce back in total volumes in 2025, steered by brand-new sales returning to [around] 8,000-8,500 units annually. This is sustained by steady property prices, with changes assumed in the range of +1% to +2%,” state Derek Tan and Tabitha Foo in both records dated Jan 6.
” The group’s market share in private new sales and resale has increased to 56% -60%, considerably higher than pre-pandemic levels,” note Tan and Foo for PropNex specifically, including that these figures show that one in every two deals is made by a PropNex agent. With this in mind, a possible raise in market share as PropNex adds to its sales force, would present upside potential to the experts’ estimations.
DBS Group Research has actually upgraded its calls on PropNex and APAC Realty to “buy” from “hold” as both counters are tipped to gain from a sturdy pipeline of new release in 2025.
PropNex is the largest real estate agency in Singapore with approximately 12,000 brokers representing 34% of the country’s market share. APAC Real estate is one of the major competitors in the property brokerage firm market. It has a presence in 17 Asia Pacific (APAC) countries and among the largest label presences in Asia via its ERA franchise business organization.
” We have actually moved the multiple towards +1 standard deviation (s.d.) (versus [a] five-year average of 12 times), as the marketplace and the company’s profitability are at an inflexion factor,” the analysts write.” [PropNex’s] FY2025/FY2026 dividend return of 7.7% (80% payout ratio) is attractive, with potential benefit if the team opts to disperse its cash money reserves (16 cents per share) to shareholders.”
In 2025 to 2026, the analysts also see nonpublic resale transactions continuing to be “secure” at 13,500 to 14,000 units. Sell-through rates could average between 30% to 50% throughout debut week ends, which could support a gradual turnaround in success for both agencies.
Tan and Foo have actually raised their target rate quotes for both PropNex and APAC Realty to $1.15 and 50 cents from 95 cents and 48 cents respectively.
