Broker: UOB Kay Hian
Date of Report: 10 June 2025
APAC Realty: A Hidden Gem in Asia Pacific Real Estate with Strong Yield and Growth Prospects
Introduction: APAC Realty’s Market Position and Investment Appeal
APAC Realty Limited (SGX: APAC SP) stands out as a leading real estate brokerage group in the Asia Pacific region, boasting a remarkable 43-year track record. With its exclusive ERA regional master franchise rights across 17 countries and a dominant presence in Singapore, APAC Realty offers a compelling investment case as a high-yield, undervalued stock primed for a recovery amid improving market conditions.
Company Overview
APAC Realty provides comprehensive real estate brokerage services, encompassing the sales and rental of residential, commercial, and industrial properties. The company’s service portfolio also includes management services for real estate developments, catering to a broad customer base across Asia.
- GICS Sector: Real Estate
- Market Cap: S\$162.3 million (US\$126.3 million)
- Shares Issued: 356.7 million
- 52-Week Share Price Range: S\$0.365 – S\$0.47
- Major Shareholder: NHPEA Ace Realty (64.1%)
- Net Asset Value per Share: US\$0.44
- Net Cash/Share: -US\$0.005
2024 Performance: A Year of Inflection and Resilience
Despite a drop in core net profit for 2024, APAC Realty demonstrated resilience with revenue stability and a notable turnaround in the fourth quarter. Key highlights include:
- Revenue: S\$561 million (+0.7% YoY)
- Core PATMI: S\$9.5 million (-19% YoY, excluding S\$2.3 million in Performance Share Plan expenses)
- Net Profit (Reported): S\$7.2 million
- EPS: 2.0 US cents
- Dividend Yield: 4.6% (2.1 cents/share, 78.7% payout ratio)
- P/E Ratio (2026F): 10x, notably lower than peer PropNex’s 14x
The 4Q24 upturn was triggered by lower interest rates and pent-up market demand, resulting in a robust rebound in project activity and new home launches.
Market Leadership and Regional Presence
APAC Realty operates in 13 markets as of end-2024, including Singapore, Australia, China, Indonesia, and Vietnam. Its network spans 590 offices with 24,740 salespersons. In Singapore, the ERA brand captured a commanding 39.9% share of private residential sales in 2024.
Strong Project Pipeline and Sales Momentum for 2025
The growth outlook for 2025 is highly promising, backed by a solid pipeline and strong early-year sales:
- New home sales in the first four months of 2025 have already surpassed 60% of the total volume sold in 2024.
- 11 projects have been launched from a pipeline of 29 projects, representing approximately 15,000 new units.
- Recent launches such as The Orie, Bagnall Haus, and Parktown Residence achieved take-up rates between 63% and 93%.
- Another 18 projects, comprising around 8,600 units, are scheduled for launch in the coming months.
- Full-year new home sales volume is projected to rise to 8,500–9,500 units for 2025, reinforcing APAC Realty’s market leadership and earnings visibility.
Dividend Policy, Share Buybacks, and Capital Efficiency
APAC Realty continues to reward investors with attractive dividends, supported by an asset-light, capital-efficient business model:
- Total payout of 2.1 cents/share in FY24 (78.7% payout ratio) aligns with the firm’s 50–80% dividend policy.
- Dividend yield remains appealing at 4.6%.
- Management repurchased 2.5 million shares at S\$0.41–0.45 in 2Q25, signaling strong confidence in long-term prospects.
Focused Growth Strategy and Scalable Model
The company’s five-year roadmap is built on the pillars of talent development, technology, and regional expansion:
- Ongoing investments in the ERA Academy and SALES+ platform to boost agent productivity and service standards.
- Enhancements like Trend Analysis 2.0 and Presenter+ improve agent presentations and client decision-making.
- Regional expansion into high-growth markets such as Vietnam, Indonesia, and the Philippines is underway via franchise partnerships and acquisitions, leveraging a capital-light model for efficient scaling.
Financial Performance Overview
| Year |
2020 |
2021 |
2022 |
2023 |
2024 |
| Net Turnover (S\$m) |
389.4 |
739.8 |
705.0 |
557.3 |
561.0 |
| EBITDA (S\$m) |
23.1 |
47.7 |
37.7 |
18.2 |
15.5 |
| Operating Profit (S\$m) |
19.8 |
43.0 |
32.8 |
13.5 |
11.0 |
| Net Profit (Adj.) (S\$m) |
16.4 |
35.4 |
26.6 |
11.8 |
9.5 |
| EPS (US cents) |
4.6 |
10.0 |
7.5 |
3.3 |
2.0 |
| P/E (x) |
9.8 |
4.6 |
6.1 |
13.7 |
22.5 |
| P/B (x) |
1.0 |
1.0 |
1.0 |
1.0 |
1.0 |
| EV/EBITDA (x) |
7.0 |
3.4 |
4.3 |
8.9 |
10.4 |
| Dividend Yield (%) |
5.5 |
23.1 |
13.7 |
5.5 |
4.6 |
| Net Margin (%) |
4.2 |
4.8 |
3.8 |
2.1 |
1.3 |
| Net Debt/(Cash) to Equity (%) |
13.1 |
(1.9) |
(2.0) |
0.1 |
1.0 |
| ROE (%) |
10.9 |
22.4 |
16.5 |
7.4 |
4.6 |
Operating Metrics and Efficiency
- EBITDA Margin (2024): 2.8%
- Net Margin (2024): 1.3%
- ROA (2024): 2.2%
- Debt to Equity (2024): 26.3%
- Interest Cover (2024): 8.0x
Cash Flow and Balance Sheet Highlights
- Operating Cash Flow (2024): S\$9.2 million
- Capex (Growth, 2024): S\$0.7 million
- Dividend Payments (2024): S\$8.2 million
- Ending Cash & Cash Equivalents (2024): S\$40.0 million
Conclusion: APAC Realty’s Value Proposition for Investors
APAC Realty is well-positioned for a strong recovery, with a resilient business model, robust project pipeline, and strategic expansion across the Asia Pacific. Its attractive valuation, high dividend yield, and management’s confidence via share buybacks highlight significant upside potential. Investors looking for a laggard realty play with solid yield and scalable growth should keep APAC Realty firmly on their radar.
