Singapore and emerging market real estate

Royston Foo

Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/27209" target="_blank" data-smartkarma-citation="entities:27209:1">Propnex Ltd (PROP SP)</a> , Singapore’s largest real estate agency with 7,248 agents, has launched its IPO on SGX Mainboard. A total of 42.5 mil shares will be available for subscription at S$0.65 per share.  Propnex will raise gross proceeds of S$40.9 mil from the issuance of new shares to cornerstone investors and for the public offering. Post-IPO, Propnex's share capital will increase to 370 mil and it will have a market capitalization of S$240.5 mil. Valuation is not attractive, at a historical PE of 14.8x and price-to-NAV ratio of 4.3x. Its closest peer - APAC Realty is trading at historical PE of 11.9x and price-to-NAV of only 2.2x. Concerns on rising staff costs and payment arrangements to Dennis Wee Realty could further compound the issue of its weak financial performance vis-a-vis its peer - APAC Realty. In view of the unattractive valuation, weaker financial performance in comparison to peer and possibility of margin compression, my recommendation is to avoid this IPO. APAC Realty might offer a better value proposition. </p>

Propnex Ltd (PROP SP) , Singapore’s largest real estate agency with 7,248 agents, has launched its IPO on SGX Mainboard. A total of 42.5 mil shares will be available for subscription at S$0.65 per share.  Propnex will raise gross proceeds of S$40.9 mil from the issuance of new shares to cornerstone investors and for the public offering. Post-IPO, Propnex's share capital will increase to 370 mil and it will have a market capitalization of S$240.5 mil. Valuation is not attractive, at a historical PE of 14.8x and price-to-NAV ratio of 4.3x. Its closest peer - APAC Realty is trading at historical PE of 11.9x and price-to-NAV of only 2.2x. Concerns on rising staff costs and payment arrangements to Dennis Wee Realty could further compound the issue of its weak financial performance vis-a-vis its peer - APAC Realty. In view of the unattractive valuation, weaker financial performance in comparison to peer and possibility of margin compression, my recommendation is to avoid this IPO. APAC Realty might offer a better value proposition. 

Propnex IPO Review – Bigger but Not Better?

Singapore

Propnex Limited operates as a real estate agency. The Company offers business strategies, consultation, training, marketing support, and technological innovations for real estate sector, as buying, selling, and renting of properties. Propnex serves customers in Singapore, Indonesia, and Malaysia.

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Propnex IPO Review – Bigger but Not Better?

Propnex Ltd (PROP SP) , Singapore’s largest real estate agency with 7,248 agents, has launched its IPO on SGX Mainboard. A total of 42.5 mil shares...

Royston Foo