DBS keeps ‘hold’ call on APAC Realty with ‘healthy’ 1HFY2022 but sees slower 2HFY2022

DBS, in its Aug 9 note, explains that there’s a time lag of three to six months before profits from transactions are scheduled. Because of this, DBS is anticipating a slower 2HFY2022 for APAC Realty.

“Though demand remains solid, exceeding supply, especially for the brand-new residences sector, this could be partially alleviated by the challenges of rising interest rates, greater inflation and also increasing land price,” adds DBS.

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DBS Group Research has actually maintained its “hold” call on APAC Realty with an unchanged target cost of 67 cents, adhering to a minor earnings dip reported by the residential property agency for its 1HFY2022.
The firm, which runs the ERA franchise business, prepares to pay an acting returns of 3.5 cents per share for 1HFY2022, representing a payout ratio of 75%. Back in 1HFY2021, APAC Realty paid an extra special dividend of 3 cents per share also.

APAC Realty closed at 69 cents on Aug 8, down 2.84% for the day.

In the very first 6 months of 2022, the personal domestic market in Singapore saw a 30% y-o-y drop in transaction quantity, with the steepest decline from the higher-margin brand-new residences sector, which was down 40% y-o-y. The HDB resale section also saw a 6.1% y-o-y decrease in the very same duration.

DBS calls the 1HFY2022 numbers “healthy”, as the home market has actually revealed its “resilience” in the middle of worldwide obstacles thanks to strong demand from both international and local purchasers.

APAC Realty’s earnings from agenting resale and rental bargains went down for 1HFY2022 yet was partly balanced out by better brand-new residence sales.

While the volume of deals for 1FHY2022 dipped, they were usually transacted at higher costs.