DBS upgrades PropNex and APAC Realty to ‘buy’ amid strong pipeline of new launches in 2025
DBS Group Research has actually enhanced its calls on PropNex and APAC Realty to “purchase” from “hold” as both counters are tipped to gain from a strong pipeline of new release in 2025.
” The group’s market share in private new sales and resale has actually raised to 56% -60%, considerably higher than pre-pandemic levels,” note Tan and Foo for PropNex especially, adding that these figures show that one in every two deals 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 provide upside potential to the experts’ estimations.
PropNex is the largest property firm in Singapore with about 12,000 brokers making up 34% of the country’s market share. APAC Real estate is one of the leading players in the realty brokerage market. It has a visibility in 17 Asia Pacific (APAC) countries and among the biggest label presences in Asia with its ERA franchise business network.
Their new target cost for PropNex is secured to 15 times the company’s P/E on rolled-forward and changed FY2025 profits. PropNex’s FY2025 profits estimates were decreased to account for lesser overall sales and margins presumptions.
In 2025 to 2026, the analysts also see nonpublic resell sales standing “secure” at 13,500 to 14,000 units. Sell-through rates can average between 30% to 50% throughout debut weekends, which might assist a continuous turnaround in earnings for both firms.
an and Foo have increased their target rate estimates for both PropNex and APAC Real Estate to $1.15 and 50 cents from 95 cents and 48 cents respectively.
Meanwhile, APAC Real estate’s 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 incomes.
” We foresee a revive in overall volumes in 2025, driven by new sales returning to [about] 8,000-8,500 units yearly. This is assisted by stable property prices, with changes anticipated in the range of +1% to +2%,” state Derek Tan and Tabitha Foo in both records dated Jan 6.
” We have transferred the multiple towards +1 standard deviation (s.d.) (versus [a] five-year average of 12 times), as the market and the company’s profitability are at an inflexion point,” the analysts compose.” [PropNex’s] FY2025/FY2026 dividend return of 7.7% (80% payout ratio) is appealing, with potential benefit if the team chooses to disperse its cash reserves (16 cents per share) to shareholders.”
The recoil will largely be driven by three main factors: lower mortgage fees; homeowners, upgraders and permanent individuals purchasing homes on their own; in addition to the introduction of a wider selection of projects with sturdy traits.
