DBS upgrades PropNex and APAC Realty to ‘buy’ amid strong pipeline of new launches in 2025
DBS Group Research has upgraded its claims on PropNex and APAC Realty to “purchase” from “hold” as both counters are tipped to gain from a sturdy pipeline of new open in 2025.
” We expect a revive in overall volumes in 2025, steered by new sales going back to [about] 8,000-8,500 units yearly. This is assisted by steady property costs, with fluctuations anticipated in the series of +1% to +2%,” claim Derek Tan and Tabitha Foo in both records dated Jan 6.
an and Foo have increased their target price estimates for both PropNex and APAC Realty to $1.15 and 50 cents from 95 cents and 48 cents respectively.
PropNex is the biggest real property agency in Singapore with approximately 12,000 agents accounting for 34% of the nation’s market portion. APAC Real estate is one of the leading players in the realty brokerage market. It has a presence in 17 Asia Pacific (APAC) places and one of the largest label footprints in Asia through its ERA franchise organization.
” We have actually moved the multiple towards +1 standard deviation (s.d.) (versus [a] five-year average of 12 times), as the market and the firm’s profitability go to an inflexion point,” the analysts write.” [PropNex’s] FY2025/FY2026 dividend yield of 7.7% (80% payout percentage) is attractive, with potential upside if the group opts to disperse its cash reserves (16 cents per share) to investors.”
In 2025 to 2026, the analysts also see nonpublic resell transactions standing “secure” at 13,500 to 14,000 units. Sell-through rates can average in between 30% to 50% during release weekends, that could support a gradual turn-around in success for both firms.
The rebound will mainly be generated by three main aspects: lower home loan prices; property owners, upgraders and permanent individuals acquiring homes on their own; along with the introduction of a wider variety of ventures with strong attributes.
” The group’s industry share in discreet new sales and resale has increased to 56% -60%, considerably more than pre-pandemic ranks,” note Tan and Foo for PropNex specifically, adding that these figures indicate that one in every two purchases is made by a PropNex broker. With this in mind, a potential increase in market share as PropNex adds to its sales force, would certainly offer upside potential to the analysts’ estimations.
On The Other Hand, APAC Real estate’s brand-new target price stands for a higher P/E multiple of 13 times in line with its four-year historical standard on rolled-forward FY2025 profits.
Their brand-new target rate for PropNex is pegged to 15 times the company’s P/E on rolled-forward and revised FY2025 incomes. PropNex’s FY2025 revenues quotes were reduced to make up lower entire sales and margins presumptions.
