DBS upgrades PropNex and APAC Realty to ‘buy’ amid strong pipeline of new launches in 2025
DBS Group Research has improved its appeals on PropNex and APAC Realty to “buy” from “hold” as both counters are tipped to benefit from a good pipeline of brand-new launches in 2025.
” We expect a revive in general volumes in 2025, driven by new sales returning to [near] 8,000-8,500 units annually. This is sustained by steady property costs, with variations anticipated in the series of +1% to +2%,” state Derek Tan and Tabitha Foo in both records dated Jan 6.
Their new target rate for PropNex is pegged to 15 times the firm’s P/E on rolled-forward and changed FY2025 earnings. PropNex’s FY2025 earnings quotes were lowered to account for lesser total sales and margins assumptions.
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an and Foo have enhanced their target price quotes for both PropNex and APAC Real Estate to $1.15 and 50 cents from 95 cents and 48 cents respectively.
” 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 business’s profitability go to an inflexion factor,” the experts publish.” [PropNex’s] FY2025/FY2026 dividend revenue of 7.7% (80% payment percentage) is appealing, with potential upside if the team chooses to allocate its cash reserves (16 cents per share) to stockholders.”
The recoil will largely be pushed by 3 main factors: lower home loan rates; house owners, upgraders and permanent individuals purchasing homes for themselves; along with the introduction of a wider selection of projects with solid features.
” The group’s market share in discreet new sales and resale has actually increased to 56% -60%, significantly greater than pre-pandemic stages,” note Tan and Foo for PropNex specifically, including that these amounts show that one in every two deals is made by a PropNex agent. With this in mind, a potential increase in market share as PropNex adds to its sales force, would offer upside potential to the experts’ estimates.
PropNex is the largest real estate firm in Singapore with about 12,000 brokers accounting for 34% of the country’s market portion. APAC Realty is among the leading competitors in the property broker agent industry. It has a visibility in 17 Asia Pacific (APAC) places and one of the largest company footprints in Asia with its ERA franchise business organization.
In 2025 to 2026, the analysts also see nonpublic resale purchases standing “secure” at 13,500 to 14,000 units. Sell-through rates can average in between 30% to 50% throughout launch week ends, which might assist a gradual turn-around in success for both firms.
On The Other Hand, APAC Realty’s brand-new target rate stands for a greater P/E multiple of 13 times in line with its four-year historical standard on rolled-forward FY2025 earnings.
