Broker: UOB Kay Hian
Date of Report: 14 July 2025

PropNex Poised for Stellar Growth: Singapore’s Real Estate Leader Set to Outperform in 2025

PropNex: Dominant Market Player with Strong Upside

PropNex Ltd (PROP SP), Singapore’s largest real estate agency, commands a dominant market share in both the residential primary private and HDB resale segments. The company’s share price recently hit S\$1.21, with a target price revised up to S\$1.35, representing an upside potential of 11.6%. PropNex’s robust fundamentals, asset-light model, and resilient demand for Singapore property position it as a top pick among real estate equities.

Key Company Data

• GICS Sector: Real Estate
• Bloomberg Ticker: PROP SP
• Shares Issued: 740 million
• Market Capitalisation: S\$895.4 million (US\$699.2 million)
• 3-month Average Daily Turnover: US\$0.5 million
• 52-week High/Low: S\$1.21 / S\$0.755
• Major Shareholders:
  – P&N Holdings (55.6%)
  – Fong Kelvin (8.9%)
  – Ismail Mohamed (9.3%)
• FY25 NAV/Share: S\$0.18
• FY25 Net Cash/Share: S\$0.16

Share Performance Highlights

• 1-month: +13.1%
• 3-month: +14.2%
• 6-month: +22.2%
• 1-year: +45.8%
• YTD: +28.0%

Bullish 2025 Outlook: Management’s Positive Tone

PropNex’s CEO, Ismail Gafoor, has delivered a bullish outlook for both near- and long-term prospects. With a network of approximately 13,600 agents, PropNex offers investors direct exposure to the stability and growth of Singapore’s public and private residential property markets. The company foresees strong transaction volumes ahead, underpinned by:

• Resilient private resale and new launch volumes
• Robust demand despite revised Seller’s Stamp Duty (SSD) rates
• A surge in project launches expected in 2025

Additionally, the Monetary Authority of Singapore’s S\$5 billion capital injection via its Equity Market Development Programme could serve as a tailwind in August-September 2025.

Transaction Volumes Surge: Private Resale and New Launch Sales

In the private resale market, over 2,900 homes were sold in Q2 2025, adding to 3,565 sold in Q1 2025. This pace suggests the market is on track to match or even outpace the 14,053 homes sold in 2024. New launch sales look even stronger, with nearly 5,430 units launched to date and another 7,670 units expected for the rest of 2025, bringing the total to nearly 13,100 units. PropNex estimates 8,000–9,000 new launch units will be sold in 2025, representing a 24–39% year-on-year increase.

SSD Revision: Minimal Impact on Market Dynamics

PropNex remains confident that the recent SSD changes are simply a calibration of the sub-sale market, not a disruptor of price or transaction volume stability. The new SSD rates mirror those previously in effect from January 2011 to March 2017, when sales remained strong, only tapering after the Total Debt Servicing Ratio was introduced in June 2013.

Financial Performance: Strong Growth Expected in 1H25

Despite a 2024 net profit of S\$40.9 million (down 14% year-on-year) that missed expectations, PropNex is forecasted to deliver a stellar 1H25:

• 1H25 Revenue: S\$501 million (+45% YoY, +15% HoH)
• 1H25 Net Profit: S\$27 million (+42% YoY, +23% HoH)

These figures underscore PropNex’s ability to capitalize on strong transaction activity in the Singapore property market.

Project Pipeline and Market Impact

PropNex projects a sharp increase in new launches for 2025:

• 32 new projects, totalling 13,099 units — more than double the units launched in 2024
• Uncompleted, unsold new home inventory at end-2024: 19,405 units
• Robust take-up rates expected, supported by a lower interest rate environment

Balance Sheet Strength: Net Cash Position

After distributing nearly S\$27 million as 2023 final dividends in 1H24, PropNex maintains a healthy net cash position:

• Net Cash (end-2024): S\$112 million
• Net Cash (end-2023): S\$133 million
• This cash buffer represents around 15% of the company’s market capitalisation

2025 Property Market Projections

Valuation and Recommendation

UOB Kay Hian maintains its BUY rating for PropNex, with a revised target price of S\$1.35 based on a forward PE multiple of 17.6x, which is 1.5 standard deviations above the company’s post-2021 average. This premium is justified by:

• PropNex’s asset-light, high free cash flow business model
• Forecasted over 40% ROE in 2025–2027
• Estimated 7.8% free cash flow yield in 2026

Potential upside catalysts include continued strong new launch sell-through, higher-than-expected property price increments, robust 1H25 results, and potential special dividends.

Key Risks to Monitor

• Slower housing demand due to new cooling measures
• Rising interest rates impacting affordability
• Increased competition from peers or disruptive digital platforms

Market Share and Million-Dollar HDB Resale Trends

PropNex continues to strengthen its market share in new launches, with the following year-to-date figures by project:

• The Orie: 42%
• Elta: 53%
• Parktown Residence: 47%
• Lentor Central: 57%
• Aurelle: 47%
• One Marina Gardens: 52%
• Bloomsbury: 72%

The number of million-dollar HDB resale flats has also risen sharply, from just 41 in 2017 to 1,035 in 2024, underlining continued demand for premium public housing.

Profit & Loss, Balance Sheet, and Cash Flow Highlights

Conclusion: PropNex Positioned for Continued Outperformance

With a strong balance sheet, dominant market share, accelerating new launches, and resilient demand across both private and public housing segments, PropNex is positioned for robust earnings growth through 2025 and beyond. The company’s asset-light model, significant free cash flow, and attractive dividend yield further enhance its investment appeal. Investors seeking exposure to Singapore’s property sector would do well to keep PropNex firmly on their radar.