DBS upgrades PropNex and APAC Realty to ‘buy’ amid strong pipeline of new launches in 2025
PropNex is the biggest real estate company in Singapore with around 12,000 representatives representing 34% of the nation’s market share. APAC Realty is among the leading players in the property brokerage firm industry. It has a visibility in 17 Asia Pacific (APAC) nations and one of the biggest label presences in Asia with its ERA franchise business organization.
” We foresee a rebound in total volumes in 2025, steered by brand-new sales going back to [near] 8,000-8,500 units yearly. This is sustained by stable property costs, with variations anticipated in the range of +1% to +2%,” say Derek Tan and Tabitha Foo in both reports dated Jan 6.
Tan and Foo have enhanced their target price estimates for both PropNex and APAC Realty to $1.15 and 50 cents from 95 cents and 48 cents specifically.
” We have actually moved the multiple in the direction of +1 standard deviation (s.d.) (versus [a] five-year standard of 12 times), as the market and the business’s profitability are at an inflexion factor,” the analysts publish.” [PropNex’s] FY2025/FY2026 dividend return of 7.7% (80% payment ratio) is appealing, with potential upside if the team decides to allocate its cash money reservations (16 cents per share) to investors.”
Their new target cost for PropNex is pegged to 15 times the business’s P/E on rolled-forward and changed FY2025 incomes. PropNex’s FY2025 incomes quotes were reduced to represent lesser total sales and margins assumptions.
At The Same Time, APAC Real estate’s new target price represents a higher P/E multiple of 13 times in line with its four-year historical standard on rolled-forward FY2025 incomes.
DBS Group Research has enhanced its appeals on PropNex and APAC Realty to “get” from “hold” as both counters are tipped to benefit from a strong pipeline of brand-new launches in 2025.
In 2025 to 2026, the analysts also see nonpublic resell purchases standing “steady” at 13,500 to 14,000 units. Sell-through rates could average between 30% to 50% throughout launch weekends, which can sustain a continuous turnaround in success for both agencies.
The recoil will greatly be driven by three major aspects: reduced home mortgage prices; home owners, upgraders and long-term individuals purchasing homes for themselves; in addition to the intro of a wider range of projects with sturdy features.
” The group’s market share in private new sales and resale has increased to 56% -60%, considerably greater than pre-pandemic levels,” note Tan and Foo for PropNex particularly, including that these amounts show that one in every two purchases is made by a PropNex agent. With this in mind, a possible raise in market share as PropNex adds to its sales force, would certainly present upside potential to the analysts’ estimates.
