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

APAC Realty - Modest Transaction Volume Growth Ahead

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APAC Realty (SGX:CLN) | SGinvestors.ioAPAC 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.
  • - Read this at SGinvestors.io -
  • 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.

HDB rental volumes emerged as the only bright spot.

  • 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.

Prices saw strong momentum in 4Q23.

  • - Read this at SGinvestors.io -
    • 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.

    HDB rental volumes emerged as the only bright spot.

    • 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.

    Prices saw strong momentum in 4Q23.

    • There were three project launches in the last quarter of 2023, which saw encouraging sell-through rates and achieved >S$2,000psf, on average.
      • Read more at SGinvestors.io.



Above is an excerpt from a report by DBS Group Research.
Clients of DBS may access the full PDF report @ https://www.dbs.com/insightsdirect/.



Tabitha FOO DBS Group Research | Derek TAN DBS Research | https://www.dbs.com/insightsdirect/ 2024-03-01



Read also DBS's most recent report:
2025-03-03 APAC Realty - At Earnings Inflection Point.

Previous report by DBS:
2025-01-06 APAC Realty - All Guns Blazing.

Price targets by other brokers at APAC Realty Target Prices.

Listing of research reports at APAC Realty Analyst Reports.

Relevant links:
APAC Realty Share Price History,
APAC Realty Announcements,
APAC Realty Dividend Payout Dates & Corporate Actions,
APAC Realty News






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