DBS upgrades PropNex and APAC Realty to ‘buy’ amid strong pipeline of new launches in 2025
DBS Group Research has actually upgraded its calls on PropNex and APAC Real estate to “buy” from “hold” as both counters are tipped to gain from a sturdy pipeline of new release in 2025.
PropNex is the largest real property agency in Singapore with about 12,000 representatives making up 34% of the nation’s market portion. APAC Realty is just one of the major players in the real estate brokerage firm market. It has a visibility in 17 Asia Pacific (APAC) places and among the biggest label footprints in Asia via its ERA franchise business organization.
” We have actually moved the multiple towards +1 standard deviation (s.d.) (versus [a] five-year standard of 12 times), as the market and the firm’s profitability go to an inflexion point,” the experts compose.” [PropNex’s] FY2025/FY2026 dividend revenue of 7.7% (80% payment percentage) is appealing, with potential upside if the group opts to allocate its money reservations (16 cents per share) to shareholders.”
Their brand-new target price for PropNex is pegged to 15 times the firm’s P/E on rolled-forward and modified FY2025 earnings. PropNex’s FY2025 revenues estimates were reduced to make up lower total sales and margins presumptions.
Union Square Residences Singapore
” We expect a rebound in overall volumes in 2025, driven by new sales going back to [around] 8,000-8,500 units annually. This is assisted by steady property prices, with changes expected in the series of +1% to +2%,” say Derek Tan and Tabitha Foo in both reports dated Jan 6.
In 2025 to 2026, the analysts also see special resell transactions remaining “secure” at 13,500 to 14,000 units. Sell-through rates could average in between 30% to 50% during release weekends, which can assist a gradual turn-around in profitability for both firms.
” The group’s market share in discreet new sales and resale has actually raised to 56% -60%, considerably higher than pre-pandemic ranks,” note Tan and Foo for PropNex particularly, including that these amounts suggest that one in every two sales is made by a PropNex representative. With this in mind, a possible increase in market share as PropNex contributes to its sales force, would certainly provide upside potential to the analysts’ estimates.
an and Foo have actually increased their target cost estimates for both PropNex and APAC Realty to $1.15 and 50 cents from 95 cents and 48 cents respectively.
At The Same Time, APAC Real estate’s new target cost represents a greater P/E multiple of 13 times in line with its four-year historical standard on rolled-forward FY2025 profits.
The rebound will greatly be pushed by three major factors: reduced home mortgage fees; house owners, upgraders and long-term residents buying homes on their own; in addition to the intro of a wider variety of projects with solid qualities.
