- PropNex (SGX:OYY) is the largest Singapore-listed real estate agency with an undemanding ~60% market share of overall residential transaction volumes. It has steadily gained market share over the years by increasing its number of agents, raising productivity, and branching out into other segments such as commercial & industrial and overseas markets via franchise agreements.
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Expecting strong 2025 earnings backed by surging new home sales.
- Recent mega new launches in November saw strong demand, exceeding market expectations, and is likely to push new home sales (Nov 2024) to more than 2,200 units, which would be the highest level since 2013. Earnings commissions from Nov 2024 will likely be recognised next year, as there is typically a 2-6 month lag in sales recognition.
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- As this segment is a key earnings growth driver for PropNex, this should boost its net profit.
- The new launch segment has higher gross margins, typically in the teens, and double that of the resale segment, where margins are in high single digits.
- We also expect resale transactions to rise 10- 15% next year on the back of a spill over effect from new launches.
Sitting on a cash pile of S$116m with no debt & minimal capex requirements.
- Read more at SGinvestors.io.
