DBS upgrades PropNex and APAC Realty to ‘buy’ amid strong pipeline of new launches in 2025
In 2025 to 2026, the analysts also see nonpublic resell transactions continuing to be “secure” at 13,500 to 14,000 units. Sell-through rates can average in between 30% to 50% throughout release week ends, which can assist a gradual turnaround in profitability for both firms.
DBS Group Research has enhanced its appeals on PropNex and APAC Real estate to “buy” from “hold” as both counters are tipped to gain from a strong pipeline of new release in 2025.
At The Same Time, APAC Real estate’s brand-new target rate stands for a higher P/E multiple of 13 times in line with its four-year historical standard on rolled-forward FY2025 earnings.
Tan and Foo have actually enhanced their target price quotes for both PropNex and APAC Realty to $1.15 and 50 cents from 95 cents and 48 cents specifically.
” We have transferred the multiple towards +1 standard deviation (s.d.) (versus [a] five-year average of 12 times), as the marketplace and the business’s profitability are at an inflexion factor,” the analysts write.” [PropNex’s] FY2025/FY2026 dividend return of 7.7% (80% payout ratio) is appealing, with potential upside if the group opts to distribute its cash reserves (16 cents per share) to shareholders.”
Their new target rate for PropNex is secured to 15 times the firm’s P/E on rolled-forward and changed FY2025 incomes. PropNex’s FY2025 profits quotes were lowered to account for lower total sales and margins presumptions.
PropNex is the largest real estate firm in Singapore with approximately 12,000 agents accounting for 34% of the country’s market portion. APAC Real estate is among the major competitors in the realty brokerage firm industry. It has a presence in 17 Asia Pacific (APAC) nations and one of the biggest label presences in Asia with its ERA franchise business network.
The recoil will mostly be generated by three main aspects: reduced home loan rates; home owners, upgraders and permanent people buying homes on their own; along with the intro of a wider selection of projects with strong qualities.
” The group’s market share in discreet new sales and resale has actually boosted to 56% -60%, significantly greater than pre-pandemic ranks,” note Tan and Foo for PropNex specifically, adding that these amounts suggest that one in every two sales is made by a PropNex broker. With this in mind, a prospective increase in market share as PropNex contributes to its sales force, would certainly present upside potential to the experts’ quotes.
” We foresee a revive in overall volumes in 2025, steered by brand-new sales returning to [around] 8,000-8,500 units every year. This is supported by stable property rates, with fluctuations expected in the range of +1% to +2%,” say Derek Tan and Tabitha Foo in both files dated Jan 6.
