These catalysts include an 80% y-o-y increase for profit in 2025, a potential special dividend, higher HDB prices and UOBKH’s optimistic forecast for new property launches in the first half of 2026. In addition, Loh holds a favourable view of the company’s 56% return on equity and forecasted 5.6% free cash flow yield for 2025.
For the new launches, UOB thinks that they should be attractively priced as their pricing will likely be linked to lower land-cost benchmarks and not later launches where prices will be centred on higher Government Land Sales (GLS) bids.
With a significant number of resale flats costing more than $1 million last year and with news headlines focusing on $1.5m as the new benchmark, Loh believes that certain segments of the HDB market will remain resilient with prices expected to rise. This is despite transaction volume declining around 12% to 25,256 attributed to new flat supply.
Overall, UOBKH is upgrading its earnings forecasts for FY2025 to FY2027 by around 5% to 10%. Loh attributes this to higher gross margins (especially from new launches) and stronger-than-expected new launch units for 2025.
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UOBKH has revised upwards expected dividend per share by one cent to nine cents with a payout ratio at 80%. Pointing out that the counter’s average payout ratio from 2023 to 2024 was 116.5%, Loh will not be surprised if there is a higher-than-expected payout ratio for 2025.
Based on the afore-mentioned factors, UOBKH has raised the valuation of PropNex to $2.51 per share with a P/E ratio of 22.9. This is pegged to higher 2026 earnings per share estimate and is two standard deviations above counter’s three-year historical P/E ratio of 13.4.
The brokerage says the PropNex, with close to 14,000 agents, is its preferred way to partake in the stability of public and private residential market transactions in Singapore. It also suggests that the counter could be a beneficiary of the MAS-supported $5 billion equity market development programme (EQDP).
Propnex celebrated its 25th anniversary in 2025 with a record $598.9 million in revenue, a 73.3% y-o-y increase. Its net profit leapt 122.4% to $42.3 million.
Shares in PropNex rose 12 cents or 6.1% on Jan 8 to close at $2.08.
