APAC Realty - Supported By High Dividend Yield
- APAC Realty (SGX:CLN) reported 1H22 revenue of S$342.6m, -4.4% y-o-y while PATMI slipped 2.1% y-o-y to S$16.7m. The weaker y-o-y performance was largely due to a 19% y-o-y drop in total new, resale and HDB resale market volume transactions in 1H22. APAC Realty’s overall market share stood at 40% as at 1H22.
- APAC Realty declared an interim dividend of S$0.035 (75% payout ratio), translating to an annualised yield of ~10%.
- APAC Realty generated S$199m (58% of 1H22 revenue) from resale and rental commission income. The 9.6% y-o-y decline in resale and rental revenue was due to a 21.4% and 6% drop in private and HDB resale market transaction volumes, respectively. Meanwhile, the rental market also registered an 8.9% contraction in leasing activity.
- APAC Realty expects transaction volumes for private and HDB resale segments could decline 15-23% y-o-y in FY22F due to the adverse impact from the Dec 2021 property cooling measures. It anticipates increases of 1-3% in private property prices and 4-8% in HDB resale prices due to limited new private supply and delays in the completion of new HDB apartments.
- In Feb 22, APAC Realty established its Capital Markets & Investment Sales (CMIS) business unit to engage individual and institutional investors with services across the commercial, industrial, retail and residential sectors. To date, CMIS has recorded over S$26m in transaction value.
- APAC Realty’s 1H22 brokerage revenue from new home sales increased 4.1% y-o-y to S$139.3m, due to the timing of revenue recognition, even as market transaction volumes declined 40.2% y-o-y. APAC Realty has been appointed the marketing agent for 25 projects with more than 8,200 units.
- We leave our FY22-24F EPS forecast for APAC Realty unchanged and maintain our target price at S$0.84, based on an unchanged blend of net cash-adjusted P/E multiple and DCF valuation. We believe APAC Realty's share price is likely supported by a projected FY22F dividend yield of 7.8%.
Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @ https://www.itradecimb.com.sg/.
LOCK Mun Yee CGS-CIMB Research | https://www.cgs-cimb.com 2022-08-10 2022-08-10
Previous report by CGS-CIMB:
2022-06-17 APAC Realty - Supported By Attractive Valuations & Yield
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