PropNex - UOB Kay Hian 2023-03-01: Stellar 2022 Results With Bumper Cash & Bonus Issue Announced

• PropNex reported a stellar set of results as the company’s revenue exceeded S$1b for the first time. Its agent base grew 8% y-o-y in 2022 to just over 11,800 and a stretch target of 15,000 agents by 2025 should underpin its growth going forward.
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• We upgrade our earnings forecasts and maintain our BUY rating, raising target price of PropNex to S$2.14.

PropNex reported better than expected 2022 earnings.

• PropNex (SGX:OYY) reported a strong set of results with revenue up 8% y-o-y to S$1.0b while net profit after minorities rising 4% y-o-y to S$62.4m. See PropNex's Announcement dated 28 Feb 2023 – These results were better than our and consensus’ estimates, with outperformance coming from the robust residential and resale market in particular.
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• Cash and stock dividend proposed. PropNex proposed a final dividend of S$0.08/share, which together with the S$0.055/share interim dividend brings total 2022 dividend to S$0.0135/share. See PropNex's dividend dates. In addition, PropNex is proposing a one-for-one bonus issue of up to 370m new ordinary shares, ostensibly to increase and broaden the company’s accessibility to investors and to increase liquidity.
• Still in a net cash position. Despite paying out nearly S$50m in dividends in 2022, PropNex ended the year in a net cash positon of S$139m (or S$0.38/share in cash) which represents over one-fifth of the company’s market capitalisation.

Property market outlook.

• Read more at SGinvestors.io.

Adrian LOH UOB Kay Hian Research | https://research.uobkayhian.com/ 2023-03-01 SGinvestors.io

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