DBS upgrades PropNex and APAC Realty to ‘buy’ amid strong pipeline of new launches in 2025
PropNex is the biggest real property agency in Singapore with approximately 12,000 agents making up 34% of the country’s market portion. APAC Realty is just one of the major competitors in the real estate brokerage industry. It has a visibility in 17 Asia Pacific (APAC) countries and one of the largest brand presences in Asia with its ERA franchise affiliate.
” We have actually transferred the multiple in the direction of +1 standard deviation (s.d.) (versus [a] five-year standard of 12 times), as the market and the company’s profitability go to an inflexion point,” the experts publish.” [PropNex’s] FY2025/FY2026 dividend yield of 7.7% (80% payment ratio) is attractive, with potential upside if the group decides to allocate its cash money reservations (16 cents per share) to investors.”
The recoil will mostly be driven by 3 main aspects: lower home loan fees; house owners, upgraders and long-term people purchasing homes for themselves; as well as the intro of a wider range of projects with sturdy qualities.
Meanwhile, APAC Realty’s brand-new target rate represents a greater P/E multiple of 13 times in line with its four-year historical standard on rolled-forward FY2025 incomes.
Their new target price for PropNex is pegged to 15 times the company’s P/E on rolled-forward and revised FY2025 profits. PropNex’s FY2025 earnings price quotes were lowered to represent lesser entire sales and margins assumptions.
” We expect a revive in overall volumes in 2025, driven by new sales returning to [about] 8,000-8,500 units every year. This is assisted by steady property prices, with changes assumed in the series of +1% to +2%,” claim Derek Tan and Tabitha Foo in both records dated Jan 6.
an and Foo have actually enhanced their target price estimates for both PropNex and APAC Realty to $1.15 and 50 cents from 95 cents and 48 cents respectively.
In 2025 to 2026, the analysts also see special resale sales remaining “secure” at 13,500 to 14,000 units. Sell-through rates can average in between 30% to 50% throughout debut weekends, that might sustain a gradual turnaround in productivity for both agencies.
” The group’s industry share in private new sales and resale has actually enhanced to 56% -60%, significantly greater than pre-pandemic stages,” note Tan and Foo for PropNex particularly, adding that these amounts show that one in every 2 sales is made by a PropNex broker. With this in mind, a possible increase in market share as PropNex adds to its sales force, would offer upside potential to the experts’ estimations.
DBS Group Research has improved its calls on PropNex and APAC Realty to “buy” from “hold” as both counters are tipped to take advantage of a good pipeline of new open in 2025.
