DBS upgrades PropNex and APAC Realty to ‘buy’ amid strong pipeline of new launches in 2025
DBS Group Research has upgraded its appeals on PropNex and APAC Realty to “acquire” from “hold” as both counters are tipped to take advantage of a sturdy pipeline of brand-new open in 2025.
Tan and Foo have raised their target cost estimates for both PropNex and APAC Real Estate to $1.15 and 50 cents from 95 cents and 48 cents specifically.
” 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 experts compose.” [PropNex’s] FY2025/FY2026 dividend return of 7.7% (80% payment ratio) is appealing, with potential upside if the group opts to allocate its money reserves (16 cents per share) to investors.”
” The group’s market share in private new sales and resale has actually boosted to 56% -60%, considerably higher than pre-pandemic stages,” note Tan and Foo for PropNex particularly, adding that these figures suggest that one in every two purchases is made by a PropNex agent. With this in mind, a prospective increase in market share as PropNex contributes to its sales force, would certainly present upside potential to the analysts’ estimates.
Meanwhile, APAC Real estate’s new target cost stands for a higher P/E multiple of 13 times in line with its four-year historical standard on rolled-forward FY2025 revenues.
Their brand-new target rate for PropNex is pegged to 15 times the company’s P/E on rolled-forward and modified FY2025 incomes. PropNex’s FY2025 revenues quotes were decreased to account for lesser entire sales and margins presumptions.
” We anticipate a revive in overall quantities in 2025, steered by brand-new sales going back to [near] 8,000-8,500 units yearly. This is supported by steady property prices, with variations expected in the range of +1% to +2%,” say Derek Tan and Tabitha Foo in both files dated Jan 6.
PropNex is the leading real property agency in Singapore with about 12,000 representatives representing 34% of the nation’s market portion. APAC Realty is just one of the leading players in the realty brokerage industry. It has an existence in 17 Asia Pacific (APAC) nations and among the biggest brand footprints in Asia with its ERA franchise business organization.
In 2025 to 2026, the analysts also see private resale sales standing “secure” at 13,500 to 14,000 units. Sell-through rates might average between 30% to 50% during release weekends, which can assist a continuous turnaround in productivity for both companies.
The recoil will largely be generated by 3 major variables: lower home loan prices; house owners, upgraders and long-term people buying homes for themselves; as well as the introduction of a wider variety of ventures with solid qualities.
