DBS upgrades PropNex and APAC Realty to ‘buy’ amid strong pipeline of new launches in 2025
PropNex is the biggest property agency in Singapore with about 12,000 representatives making up 34% of the country’s market share. APAC Realty is among the major players in the realty broker agent market. It has a visibility in 17 Asia Pacific (APAC) countries and one of the biggest brand presences in Asia with its ERA franchise business affiliate.
an and Foo have actually raised their target cost estimates for both PropNex and APAC Realty to $1.15 and 50 cents from 95 cents and 48 cents specifically.
Meanwhile, APAC Realty’s brand-new target price represents a greater P/E multiple of 13 times in line with its four-year historical standard on rolled-forward FY2025 revenues.
In 2025 to 2026, the analysts also see private resell purchases remaining “secure” at 13,500 to 14,000 units. Sell-through rates can average in between 30% to 50% throughout launch weekends, that could support a gradual turn-around in productivity for both companies.
” We have moved the multiple towards +1 standard deviation (s.d.) (versus [a] five-year standard of 12 times), as the marketplace and the business’s profitability go to an inflexion factor,” the experts write.” [PropNex’s] FY2025/FY2026 dividend revenue of 7.7% (80% payment percentage) is attractive, with potential benefit if the group decides to allocate its money reservations (16 cents per share) to shareholders.”
” We expect a rebound in total volumes in 2025, driven by new sales returning to [near] 8,000-8,500 units annually. This is supported by steady property prices, with fluctuations assumed in the range of +1% to +2%,” say Derek Tan and Tabitha Foo in both reports dated Jan 6.
The rebound will largely be driven by three major factors: lower home loan prices; home owners, upgraders and long-term individuals buying homes on their own; in addition to the intro of a wider variety of projects with sturdy traits.
DBS Group Research has improved its appeals on PropNex and APAC Real estate to “purchase” from “hold” as both counters are tipped to gain from a sturdy pipeline of new launches in 2025.
Their new target cost for PropNex is secured to 15 times the firm’s P/E on rolled-forward and revised FY2025 profits. PropNex’s FY2025 earnings price quotes were decreased to make up lesser total sales and margins assumptions.
” The group’s market share in private new sales and resale has increased to 56% -60%, significantly greater than pre-pandemic stages,” note Tan and Foo for PropNex especially, adding that these figures suggest that one in every 2 deals is made by a PropNex agent. With this in mind, a potential surge in market share as PropNex adds to its sales force, would certainly offer upside potential to the analysts’ assessments.
