DBS upgrades PropNex and APAC Realty to ‘buy’ amid strong pipeline of new launches in 2025
PropNex is the leading property company in Singapore with about 12,000 agents accounting for 34% of the nation’s market share. APAC Real estate is one of the top competitors in the property brokerage sector. It has an existence in 17 Asia Pacific (APAC) countries and among the biggest company footprints in Asia via its ERA franchise affiliate.
DBS Group Research has actually upgraded its appeals on PropNex and APAC Real estate to “acquire” from “hold” as both counters are tipped to gain from a good pipeline of brand-new release in 2025.
The rebound will mostly be driven by three major factors: reduced home mortgage rates; property owners, upgraders and long-term people purchasing homes on their own; as well as the intro of a wider selection of ventures with sturdy features.
” We foresee a bounce back in overall volumes in 2025, steered by brand-new sales going back to [about] 8,000-8,500 units each year. This is assisted by steady property rates, with changes expected in the series of +1% to +2%,” say Derek Tan and Tabitha Foo in both records dated Jan 6.
” The group’s market share in discreet new sales and resale has enhanced to 56% -60%, significantly more than pre-pandemic stages,” note Tan and Foo for PropNex particularly, including that these figures show that one in every two sales is made by a PropNex agent. With this in mind, a possible surge in market share as PropNex contributes to its sales force, would certainly present upside potential to the analysts’ quotes.
” We have transferred the multiple in the direction of +1 standard deviation (s.d.) (versus [a] five-year standard of 12 times), as the marketplace and the firm’s profitability go to an inflexion point,” the experts publish.” [PropNex’s] FY2025/FY2026 dividend return of 7.7% (80% payment ratio) is appealing, with potential upside if the team opts to disperse its cash reservations (16 cents per share) to shareholders.”
At The Same Time, APAC Real estate’s new target rate represents a greater P/E multiple of 13 times in line with its four-year historical standard on rolled-forward FY2025 revenues.
Tan and Foo have boosted their target price estimates for both PropNex and APAC Realty to $1.15 and 50 cents from 95 cents and 48 cents specifically.
Their new target cost for PropNex is pegged to 15 times the business’s P/E on rolled-forward and revised FY2025 profits. PropNex’s FY2025 incomes estimates were decreased to represent lower entire sales and margins assumptions.
In 2025 to 2026, the analysts also see private resell sales continuing to be “secure” at 13,500 to 14,000 units. Sell-through rates can average between 30% to 50% throughout release week ends, which can support a continuous turn-around in profitability for both agencies.
