APAC Realty - Modest Transaction Volume Growth Ahead

APAC Realty - DBS Research 2024-03-01: Modest Transaction Volume Growth Ahead

SGinvestors.io

Published: 2024-04-10 12:39 PM

APAC Realty (SGX:CLN)

APAC Realty (SGX:CLN)'s FY23 revenue declined 21% y-o-y to S$557.3m, which was in line with expectations. It was primarily attributable to a 47.8% fall in revenue from new homes (which have much higher margins than resale & rental), while expenses rose 10.8% y-o-y during the year.
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FY23 also saw modest non-operating income, compared to a non-operating expense recorded a year ago.
Consequently, net profit fell 60% y-o-y to S$11.8m and net margin dipped significantly to 2.1% for the year compared to 3.8% for FY22.

Transaction volumes for both new homes and resale experienced a y-o-y decline on the back of macroeconomic uncertainties and higher interest rates.
For the rental market, transaction volumes for the private segment also dipped. In contrast, HDB rental transaction volumes grew y-o-y, which could be supported by private homeowners who have to observe a 15-month wait-out period before being eligible to acquire a resale HDB as well as a “trade-down” to HDB rentals given the elevated rental prices after the pandemic, though we are starting to see signs of easing.

APAC Realty (SGX:CLN)'s FY23 revenue declined 21% y-o-y to S$557.3m, which was in line with expectations. It was primarily attributable to a 47.8% fall in revenue from new homes (which have much higher margins than resale & rental), while expenses rose 10.8% y-o-y during the year.
Finance costs came in higher than expected amid the heightened interest rate environment.
FY23 also saw modest non-operating income, compared to a non-operating expense recorded a year ago.
Consequently, net profit fell 60% y-o-y to S$11.8m and net margin dipped significantly to 2.1% for the year compared to 3.8% for FY22.

Transaction volumes for both new homes and resale experienced a y-o-y decline on the back of macroeconomic uncertainties and higher interest rates.
For the rental market, transaction volumes for the private segment also dipped. In contrast, HDB rental transaction volumes grew y-o-y, which could be supported by private homeowners who have to observe a 15-month wait-out period before being eligible to acquire a resale HDB as well as a “trade-down” to HDB rentals given the elevated rental prices after the pandemic, though we are starting to see signs of easing.