- PropNex (SGX:OYY)’s 1H23 result was soft, although not totally unexpected as buyer sentiment was affected by two recent property cooling measures. 1H net profit of S$22m (-18.4% y-o-y) achieved only 39%/35% of MIBG/street’s full-year forecasts.
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- PropNex declared an interim dividend of 2.5 cents, thus raising its dividend payout ratio (DPR) to 84%, to our surprise. We believe PropNex is increasingly seen as a sustainable yield play given its strong balance sheet. Maintain BUY.
Slow 1H sales after two cooling measures
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- As a result, 1H gross profit margin also narrowed by 0.3ppt to 9.8% in tandem with changes in sales mix as project marketing (which accounted for 31% of sales in 1H23 vs almost 39% a year ago) typically commands higher margins.
Large pipeline of project launches in 2H23
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