PropNex - CGS-CIMB Research 2022-08-10: Tracking Slower Market Momentum

PropNex - Tracking Slower Market Momentum

PROPNEX LIMITED (SGX:OYY) | SGinvestors.ioPROPNEX LIMITED (SGX:OYY)
  • PropNex (SGX:OYY) reported a 11.4% y-o-y decline in 2Q22 revenue to S$230.7m, while gross profit slipped 15% y-o-y to S$23.7m, largely on slower project marketing revenue, partly offset by higher agency services revenue. 2Q PATMI of S$13.1m was 20.7% lower than a year ago.
  • PropNex proposed an interim dividend of S$0.055, or an annualised yield of 6.6%. Its gross cash balance stood at S$133.9m (or S$0.362 per share) at end-2Q.
  • For FY22F, PropNex's management expects homes sales in Singapore to drop 30-40% y-o-y due to the impact from the property cooling measures announced in Dec 2021 and dwindling unsold inventory. That said, management indicated that it anticipates private home prices in Singapore to rise 7-8% in 2022F due to limited new launch supply.
  • As at Aug 2022, PropNex’s sales force had grown to 11,745 agents, enabling it to garner more market share, in our view.
  • Meanwhile, PropNex’s commission from agency services rose 4.1% y-o-y in 2Q to S$139.1m (1H: S$254.7m, +12.3% y-o-y) as the group continued to expand its market share amid slower market volumes. PropNex expects the overall private resale volume to shrink 15-20% y-o-y to 15k-16k in FY22F and projects HDB resale transactions to slide 5- 10% for the year.
  • During the quarter, PropNex expanded its footprint to Australia with the establishment of an office in Melbourne.
  • We keep our FY22-24F net profit estimates for PropNex unchanged. While PropNex has achieved 55.6% of our FY22F net profit forecast in 1H, we believe the slower pace of new launches in 1H and the time lag in profit recognition could be a drag on PropNex's performance in 2H22F y-o-y.




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
SGX Stock Analyst Report ADD MAINTAIN ADD 2.070 SAME 2.070




Previous report by CGS-CIMB:
2022-02-24 PropNex - Delivering A Strong FY21

Target prices by 5 other brokers at PropNex Target Prices.
Listing of broker reports at PropNex Analyst Report.

Relevant links:
PropNex Share Price History,
PropNex Announcements,
PropNex Dividends & Corp Actions,
PropNex News Articles





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