DBS upgrades PropNex and APAC Realty to ‘buy’ amid strong pipeline of new launches in 2025
DBS Group Research has actually upgraded its calls on PropNex and APAC Realty to “acquire” from “hold” as both counters are tipped to take advantage of a sturdy pipeline of new release in 2025.
At The Same Time, APAC Realty’s new target cost stands for a greater P/E multiple of 13 times in line with its four-year historical average on rolled-forward FY2025 revenues.
Their brand-new target cost for PropNex is fixed to 15 times the company’s P/E on rolled-forward and modified FY2025 profits. PropNex’s FY2025 profits quotes were decreased to make up lesser overall sales and margins presumptions.
In 2025 to 2026, the analysts also see private resell purchases continuing to be “stable” at 13,500 to 14,000 units. Sell-through rates could average in between 30% to 50% during release weekends, that could sustain a gradual turnaround in success for both companies.
PropNex is the largest real property agency in Singapore with around 12,000 brokers representing 34% of the country’s market portion. APAC Real estate is one of the major players in the property brokerage industry. It has an existence in 17 Asia Pacific (APAC) nations and among the largest brand presences in Asia through its ERA franchise affiliate.
” We have transferred the multiple towards +1 standard deviation (s.d.) (versus [a] five-year average of 12 times), as the marketplace and the firm’s profitability are at an inflexion point,” the experts compose.” [PropNex’s] FY2025/FY2026 dividend yield of 7.7% (80% payment ratio) is attractive, with potential benefit if the team chooses to distribute its money reservations (16 cents per share) to investors.”
” The group’s industry share in discreet new sales and resale has actually increased to 56% -60%, significantly greater than pre-pandemic stages,” note Tan and Foo for PropNex especially, including that these figures show that one in every two deals is made by a PropNex agent. With this in mind, a prospective surge in market share as PropNex contributes to its sales force, would provide upside potential to the analysts’ estimations.
” We foresee a bounce back in total volumes in 2025, steered by new sales going back to [near] 8,000-8,500 units each year. This is supported by stable property costs, with changes expected in the range of +1% to +2%,” say Derek Tan and Tabitha Foo in both reports dated Jan 6.
The recoil will greatly be driven by 3 major variables: lower home mortgage prices; property owners, upgraders and long-term individuals getting homes on their own; in addition to the intro of a wider selection of projects with strong attributes.
an and Foo have actually increased their target rate estimates for both PropNex and APAC Realty to $1.15 and 50 cents from 95 cents and 48 cents specifically.
