This is supported by strong performances from new launches such as Chuan Park, which sold 76% of its 916 units, and Emerald of Katong, which sold 99% of its 846 units.
OIR analyst Donavan Tan notes that the introduction of new homes from these highly anticipated projects have rejuvenated the market, with buyers who were previously sidelined re-entering.
Tan raises his FY2024 and FY2025 free cash flow (FCF) assumptions by 6.1% and 7.1%, respectively.
Tan notes that the risk-reward profile seems less attractive at current levels and investors seeking to diversify their holdings may want to consider switching to stocks with greater upside potential.
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Despite the downgrade, Tan expects PropNex to remain a solid dividend yield play. He projects a dividend payout of 90%, implying FY2024 and FY2025 yields of 5.6% and 6.1% respectively.
As at 11.05am, units in Propnex are trading flat at 90 cents.