APAC Realty - DBS Research 2022-11-11: Adapting To Cooling Measures

• APAC Realty (SGX:CLN)'s total revenue for 9M22 was down 3.2% y-o-y to S$523.9m. Despite the 43% y-o-y drop in units sold for the new home segment, revenue only saw a 0.6% decline to S$210.1m (accounts for 40% of total revenue), mainly due to the higher selling prices. resale and rental revenue eased 4.8% y-o-y to S$310.2m. For 3Q22, revenue was up 1.5% y-o-y and 5.7% q-o-q. See APAC Realty's announcement dated 09 Nov 2022.
• - Read this at SGinvestors.io -
• - Read this at SGinvestors.io -

More new home supply in the pipeline for 2023.

• ERA has secured marketing mandates for 13 projects with a total of 3,642 units launched so far. Another two more projects – Hill House and Tenet – with a total of 690 units are expected to be launched in 2022. For 2023, more than 24 projects with a total of more than 8,000 units are expected to be launched.
• Period of adjustment to cooling measures getting shorter. The knee-jerk period for the cooling measures implemented in 2013 was about four years. Notably, net profit for APAC Realty only managed to reach the pre-measure level in 2017.
• Meanwhile, the adjustment period became shorter during the rounds of cooling measures in 2018 and 2021, to about one to two quarters, using the Private Property Price Index as a gauge.

Expect a weaker 4Q22 and 1Q23, as the impact from recent cooling measures sets in.

• Read more at SGinvestors.io.

Lee Keng LING DBS Group Research | https://www.dbs.com/insightsdirect/ 2022-11-11 SGinvestors.io

---