DBS upgrades PropNex and APAC Realty to ‘buy’ amid strong pipeline of new launches in 2025
PropNex is the biggest real estate agency in Singapore with around 12,000 agents representing 34% of the nation’s market share. APAC Real estate is just one of the leading competitors in the property brokerage industry. It has an existence in 17 Asia Pacific (APAC) countries and among the largest label footprints in Asia via its ERA franchise organization.
Their brand-new target rate for PropNex is secured to 15 times the company’s P/E on rolled-forward and revised FY2025 profits. PropNex’s FY2025 revenues quotes were reduced to represent lesser entire sales and margins assumptions.
On The Other Hand, APAC Real estate’s new target cost represents a higher P/E multiple of 13 times in line with its four-year historical standard on rolled-forward FY2025 profits.
The recoil will greatly be generated by 3 main factors: reduced mortgage rates; house owners, upgraders and long-term residents acquiring homes for themselves; in addition to the introduction of a wider array of ventures with strong qualities.
DBS Group Research has upgraded its appeals on PropNex and APAC Realty to “purchase” from “hold” as both counters are tipped to gain from a strong pipeline of new launches in 2025.
In 2025 to 2026, the analysts also see private resale transactions remaining “steady” at 13,500 to 14,000 units. Sell-through rates can average in between 30% to 50% throughout release week ends, that could assist a continuous turnaround in success for both agencies.
an and Foo have raised their target cost estimates for both PropNex and APAC Realty to $1.15 and 50 cents from 95 cents and 48 cents specifically.
” We have actually moved the multiple in the direction of +1 standard deviation (s.d.) (versus [a] five-year standard of 12 times), as the market and the company’s profitability are at an inflexion point,” the experts write.” [PropNex’s] FY2025/FY2026 dividend revenue of 7.7% (80% payout percentage) is attractive, with potential benefit if the team opts to disperse its cash reserves (16 cents per share) to shareholders.”
” The group’s industry share in discreet new sales and resale has actually boosted to 56% -60%, considerably higher than pre-pandemic ranks,” note Tan and Foo for PropNex especially, adding that these amounts suggest that one in every 2 deals is made by a PropNex agent. With this in mind, a possible surge in market share as PropNex contributes to its sales force, would present upside potential to the analysts’ estimations.
” We expect a bounce back in total volumes in 2025, steered by brand-new sales going back to [about] 8,000-8,500 units yearly. This is assisted by steady property prices, with variations assumed in the range of +1% to +2%,” say Derek Tan and Tabitha Foo in both reports dated Jan 6.
