Broker: UOB Kay Hian
Date of Report: 13 August 2025

PropNex Delivers Stellar 1H25 Results: Double-Digit Growth, Strong Dividend, and Upbeat Outlook

Singapore’s Real Estate Leader Surges Ahead in 2025

PropNex Ltd, Singapore’s largest real estate agency, has reported an exceptional first half for 2025, underscoring its dominance in both the primary private and HDB resale property markets. The company’s performance was driven by robust transaction volumes, record financial results, and a significant dividend hike, positioning it as a top pick for investors seeking exposure to the Singapore property sector.

Strong Share Price Performance and Market Position

• Current Share Price: S\$1.64
• Target Price: S\$2.00 (previously S\$1.35); Upside Potential: +22%
• Market Capitalization: S\$1,213.6 million
• Shares Outstanding: 740 million
• 52-week High/Low: S\$1.65/S\$0.76
• Major Shareholders: P&N Holdings (55.6%), Ismail Mohamed (9.3%), Fong Kelvin (8.9%)

1H25 Financial Results: Surpassing Expectations

PropNex’s results for the first half of 2025 were nothing short of impressive, with revenue and profit metrics far exceeding analyst forecasts. The company’s asset-light, cash-generative business model continues to deliver strong returns and maintain a rock-solid balance sheet.

Key Drivers Behind the Earnings Upside

• Blockbuster Revenue Growth: 73% year-on-year increase to S\$599 million in 1H25.
• PATMI: More than doubled to S\$42.3 million, already achieving 79% of the full-year forecast.
• Interim Dividend: S\$0.05 per share, reflecting an 87.5% payout ratio, over twice the 1H24 payout.
• Strong Transaction Volumes: Momentum from robust 4Q24 activity continued into 1H25, with 5,429 new units launched in 1H25, expected to rise to 7,724 in 2H25.
• Solid Financial Position: Zero debt and S\$137 million in cash (over 12% of market cap). Free cash flow generation soared to S\$68 million in 1H25 vs S\$11 million in 1H24.

PropNex’s Segment Performance and Revenue Mix

In 1H25, project marketing remained the largest segment, contributing 43% of total revenue, followed by private resale (21%), rental (15%), HDB transactions (12%), landed properties (6%), and commercial (3%).

1H25 Revenue Breakdown by Segment

• Project Marketing: 43%
• Private Resale: 21%
• Rental: 15%
• HDB: 12%
• Landed: 6%
• Commercial: 3%
• Total 1H25 Revenue: S\$599 million

Financial Ratios and Key Metrics

Dividend Outlook and Historical Payouts

PropNex has consistently rewarded shareholders with attractive dividends, maintaining high payout ratios. For 2025, the forecast dividend per share (DPS) has risen to S$0.08, with the potential for a surprise upside, given the company’s 2023-24 average payout ratio of 116.5% (including a special dividend in 2024).

Historical Dividend Payout (S cents)

• 2020: 2.75
• 2021: 6.25
• 2022: 6.75
• 2023: 6.00
• 2024 (1H: 2.25¢, 2H: 3.00¢, Special: 2.50¢)
• 1H25: 5.00

Market Outlook and Strategic Positioning

PropNex’s management believes that the company’s medium-to-long-term growth will be underpinned by:

• Continued expansion in agent numbers, now exceeding 13,600, widening the gap with competitors.
• Rising productivity through technology investments.
• Singapore government’s commitment to increasing housing supply.
• Potentially more favorable interest rate cycles supporting housing demand.

2025 Property Market Forecasts

• Private residential prices: +3% to +4%
• Private resale volume: 14,000-15,000 units (flat to +7% YoY)
• Private new sale volume: 8,000-9,000 units (+24% to +39% YoY)
• HDB resale prices: +4% to +5%
• HDB resale volume: 27,000-28,000 units (-3% to -7% YoY)

Risks to Watch

• Slower housing demand due to cooling measures.
• Rising interest rates could impact affordability.
• Increased competition from peers or disruptive digital platforms could pressure transaction volumes, margins, and earnings visibility.

Valuation and Recommendation

• BUY rating maintained with a higher target price of S\$2.00, based on a 19.5x PE (two standard deviations above three-year average PE of 12.3x).
• PropNex is the preferred play for Singapore’s residential market stability, backed by a large and growing agent base and potential MAS S\$5 billion Equity Market Development Programme support.
• The high valuation multiples are justified by robust free cash flow, an asset-light model, and a forecasted 2026 PE of 16.3x, with over 51% ROE and a 4.9% dividend yield.

Share Price Catalysts

• Continued strong sell-through of new property launches in the second half of 2025, which would boost 1H26 earnings.
• Higher-than-expected price increments for private residential and HDB resale flats.

Upgraded Earnings Forecasts

Following the strong 1H25 results, earnings forecasts for 2025-2027 have been raised by 27-36% to reflect increased revenue potential from a larger agent base and higher average transaction values.

Balance Sheet and Cash Flow Highlights

• Cash and short-term investments: S\$133.7 million (2025F), projected to rise to S\$180.1 million by 2027F.
• No long-term debt.
• Net cash to equity: Forecasted at -97.0% in 2025F, improving further to -106.3% by 2027F.
• Dividend payments: S\$57.4 million (2025F), increasing to S\$59.5 million (2027F).

Conclusion: PropNex Remains a Standout Pick in Singapore’s Real Estate Sector

PropNex has delivered an outstanding first half in 2025, underpinned by surging transaction volumes, a strong agent network, and prudent financial management. With a sector-leading ROE, high dividends, and a robust outlook, the company remains a premier investment opportunity for those seeking stable exposure to Singapore’s real estate market. Risks remain, but PropNex’s scale, asset-light model, and market leadership position it well for continued success.

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