PropNex - UOB Kay Hian 2023-05-29: Still The Go-To Play For Singapore Residential Property

• PropNex remains the go-to stock for exposure to Singapore’s residential property market given its dominant market share. In the medium term, its earnings could be boosted by its low-cost entry into the commercial property segment.
• - Read this at SGinvestors.io -

Still going strong.

• After our company visit to PropNex (SGX:OYY) last week, we remain bullish on the company’s long-term prospects given its leverage to Singapore’s residential market that has remained robust, coupled with its new growth plans to enter the commercial market with the establishment of a consultancy arm.
• - Read this at SGinvestors.io -

What cooling measures?

• On 27 May 23, sales of around 66% at The Reserve Residences (Far East Organisation & Sino Group) at an average of S$2,450psf indicate that the recent increase in ABSD rates was a populist measure with little to no impact on local demand. Notably, the only three reported purchases by foreigners were by US citizens who are not subject to the 60% ABSD due to USA’s Free Trade Agreement with Singapore.
• In addition, Blossoms By The Park, launched right after the ABSD announcement on 26 Apr 23, saw 70% of its units being sold on its opening weekend.
• These strong sales numbers for mid-and mass-market properties are positive for PropNex in our view given its involvement in the project marketing of these properties, however such robust levels of demand arguably increases the likelihood of more cooling measures targeted at the local market.

PropNex's 1-for1 bonus dividend for 2022 has boosted liquidity.

• Read more at SGinvestors.io.

Adrian LOH UOB Kay Hian Research | https://research.uobkayhian.com/ 2023-05-29 SGinvestors.io

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