PropNex: The recent pullback is an attractive buying opportunity

Key Points

The near-term softness is real but largely anticipated. A launch calendar backloaded with higher-margin CCR launches concentrated in 2H26, lower new launch unit volumes and a typical time lag in recognition of commissions from new launches (i.e units sold in 4Q would generally only be recognised in 1Q of the following year) are likely to weigh on 2026’s earnings. However, we think that the market is over-focusing on short-term timing effects while underappreciating the longer-term growth trajectory.

Firstly, this year’s new launch pipeline may be smaller in volume, but total inventory (including unsold new launch units from last year) remains broadly stable. Secondly, private residential prices are expected to grow 3% to 4% this year, expanding the commission pool even as unit volumes soften. Thirdly, record Government Land Sales (GLS) land bids, most recently the Lentor Central site at SGD 1,278 psf ppr, signal strong developer confidence and point to a higher new launch price floor that structurally supports PropNex's commission yield over the medium term.

Last but not least, the number of HDB flats reaching their Minimum Occupancy Period (MOP) is set to rebound from 8,000 units in 2025 to over 19,500 by 2028, fuelling a multi-year wave of resale activity and private market upgrades. Combined with a sustained GLS pipeline over the next two years, we expect earnings momentum to strengthen meaningfully once the current period of softness passes.

PropNex delivered robust financial performance in 2025, with full-year revenue surging 42.6% year-on-year (YoY) to SGD 1.12 billion, fuelled by a sharp recovery in transaction activity, particularly in the primary residential market. Momentum remained firm in 2H25, where revenue rose 18.3% YoY to SGD 517.5 million, underpinned by the launch of new private residential projects.

Table 1: Financial highlights of PropNex based on its recent performance

Figure 1: PropNex made a record profit in 2025

The Project Marketing segment was the standout performer, with 2H25 revenue climbing 86.1% YoY to SGD 175.5 million. For the full year, the segment more than doubled, advancing 133.9% YoY to SGD 434.0 million. Private resale gained 28.8% YoY to SGD 234.2 million, while landed resale rose a notable 50.3% YoY to SGD 61.7 million. The rental segment grew steadily by 5.6% YoY to SGD 191.2 million. HDB resale was the sole laggard, easing 1.7% YoY to SGD 153.5 million, which may be attributable to the smaller MOP-eligible supply (further elaborated under Outlook, Figure 5). Overall, the growth was broad-based, though clearly anchored in new launch activity.

Table 2: Project Marketing led the growth in 2025

Figure 2: Revenue breakdown by segments for 2025

Alongside top-line growth, profitability improved meaningfully. Profit attributable to owners expanded 72.0% to SGD 70.4 million, outpacing revenue growth, as net margin widened to 6.7% from 5.3% a year earlier. This margin uplift reflects a favourable revenue mix shift towards higher-margin project marketing and higher-value transactions.

Record full-year dividend declared

PropNex recommended a second-half dividend per share (DPS) of 4.50 cents for 2H25, up 50% YoY, reflecting the strong earnings momentum driven by the new private residential segment.

For the full year, total DPS of 9.50 cents marks the highest dividend since the company's listing, translating to a dividend payout ratio (DPR) of 99.9% of profit after tax and non-controlling interests. The elevated dividend payout was due to record-high earnings driven by a surge in new private home sales, a robust project pipeline, and an asset-light business model. This exceeds the stated dividend payout ratio of 75% to 80% in its policy, and we expect future dividends to normalise within this range.

Figure 3: PropNex has been rewarding its shareholders through dividends

Fewer new units, but total inventory remains broadly stable.

2025 saw 27 projects (including executive condominiums (ECs)) totalling 12,769 units launched, with activity skewed towards 2H25 (7,340 units vs 5,429 units in 1H25). The 2026 pipeline is similarly sized at 27 projects (including ECs), but total estimated new launch units are lower at 11,116, a YoY reduction of roughly 13%.

However, this headline figure understates the true size of the addressable market. When unsold inventory carried over from 2025 launches is included, total available inventory contracts by only 2% YoY, from 16,931 units in 2025 to 16,597 units in 2026.

The commission pool available to PropNex is therefore considerably more resilient than the new launch figures alone would suggest, and we believe the market may be overstating the near-term earnings impact of lower new supply.

Table 3: Regional Mix

The more telling shift lies in the regional composition of the 2026 pipeline. RCR supply falls sharply from 36.5% to 19.6% of total new launch units, while OCR rises from 42.0% to 58.1%. CCR is broadly stable, edging up marginally from 21.5% to 22.4%.

The rise in OCR's share reflects a heavier weighting towards lower price-point transactions, which generate smaller commissions per deal. EC launches feature prominently in this segment and have historically seen strong take-up given their appeal to HDB upgraders (which also coincides with the rebound in MOP-eligible flats over the next few years, see Figure 5). PropNex's well-established market position ensures it captures this transactional flow, but investors should recognise that OCR and EC deals contribute less to per-transaction revenue than their RCR or CCR counterparts.

That said, the CCR share, while only marginally higher in terms of new launches, is further supported by unsold CCR inventory carried over from 2025. CCR deals command significantly larger absolute commissions, and the inventory carried over from last year represents a visible and near-term commission opportunity that does not depend on new project launches to materialise.

The strong reception at River Modern offers a timely and concrete validation of sustained CCR demand. GuocoLand's 455-unit riverfront development in prime District 9 sold 90% of its units at launch on 7 March 2026, at an average price of SGD 3,266 psf, with the highest transaction reaching SGD 3,693 psf. While this does not set a new psf record for the precinct, the result stands out for its absorption rather than its headline price. Critically for PropNex, the commission implications are significant; a near-complete sellout of a CCR project in a single weekend represents a concentrated and high-value revenue event.

Notable upcoming CCR projects, including the redevelopment of Marina Square (702 units) and Valley Point (417 units), add further depth to the commission pipeline.

Beyond new launches, the sharp pullback in RCR new supply carries a subtler but meaningful implication for PropNex's resale business. With fewer new options available in the mid-tier corridor, buyers may increasingly turn to the resale market, providing a tailwind for PropNex's private resale segment, which has already regained momentum in 2025, advancing 28.8% YoY. Sustained resale activity in the RCR would provide an additional revenue stream to cushion any softness in new project launches.

One timing caveat is worth noting. While the 2026 launch pipeline is broadly balanced between 1H26 and 2H26 by unit volume, approximately 5,456 units (49.1%) in 1H26 versus 5,660 units (50.9%) in 2H26, the mix of higher-margin CCR projects is skewed towards 2H26. As such, although 1H26 project marketing revenue should remain supported from a volume perspective, the more meaningful uplift in blended commission yields and margins is likely to materialise in 2H26. Given the revenue recognition lag, part of this uplift may only be reflected in 1Q27 results. Investors should therefore avoid assessing 1H26 performance in isolation, as spillover from higher-value transactions could extend into 1Q27.

Table 4: Projects launched in 2025 (27 projects, 12,769 units)

Table 5: Projects lined-up in 2026 (Estimated 27 projects, 11,116 units)

Record GLS land bids reinforce new launch pricing and support brokerage earnings

Recent Government Land Sales (GLS) tenders highlight continued developer willingness to bid aggressively for residential sites, reinforcing higher launch price benchmarks. The latest Lentor Central site attracted a top bid of SGD 1,278 psf per plot ratio (ppr) from a GuocoLand-led consortium, marking the highest land rate achieved among sites within the Lentor Hills estate since 2021. Based on industry estimates, the elevated land cost could translate into future launch prices of around SGD 2,700 psf, representing a meaningful step-up from earlier projects within the precinct.

Notably, the second-highest bid of SGD 1,208 psf ppr came from a consortium including Frasers Property, Soilbuild and Sekisui House. The participation of Soilbuild is particularly noteworthy given its existing exposure in the area through the nearby Hillock Green development (SGD 1,108 psf ppr). Developers with projects in close proximity sometimes participate in nearby land tenders as part of a defensive bidding strategy to protect the pricing integrity of existing developments, as a significantly lower land bid could imply lower breakeven costs for competing projects and potentially exert downward pressure on nearby selling prices.

Table 6: Bidders for Lentor Central GLS site

Table 7: Performance of existing Lentor launches

A similar dynamic was observed in the EC segment. In early 2026, Sim Lian Group submitted the top bid of SGD 794 psf ppr for a Woodlands Drive 17 EC site, setting a new record land rate for EC developments and surpassing the previous benchmark of SGD 782 psf ppr paid by City Developments Limited for a neighbouring site. Such outcomes illustrate how competitive bidding within the same micro-market can establish higher pricing benchmarks for subsequent launches.

For property agencies, rising land prices are generally supportive for earnings as higher selling prices translate into larger transaction values and a higher absolute commission pool. Together with a sustained pipeline of new launches arising from GLS tenders, this dynamic should continue to support primary market activity. As Singapore’s largest real estate agency with a dominant presence in developer project marketing, PropNex is structurally well-positioned to benefit from both higher transaction values and continued new launch volumes.

Figure 4: Total residential units under the GLS continued to be in the upper-bound range

Number of flats exiting MOP expected to rebound this year

PropNex stands to benefit from a resilient HDB resale market, driven by flats exiting the five-year Minimum Occupation Period (MOP) and sustained price appreciation. The number of resale-eligible flats is expected to rebound from a low of 8,000 units in 2025 to 13,500 in 2026, 15,000 in 2027, and 19,500 in 2028 (CAGR: 32.2%), providing a clear catalyst for transaction volume growth for the HDB resale market.

At the same time, HDB resale prices have appreciated approximately 54.8% over the past six years through end-2025, boosting homeowners’ equity. This creates a wealth effect, encouraging owners to transact, upgrade into ECs or private condos, and leverage additional capital. These dynamics support both the resale and new-launch segments of PropNex’s business.

Together, these factors form a virtuous cycle: rising resale volumes drive higher commissions and brokerage income, while price appreciation fuels further market participation and upgrades. The interplay of volume and price not only underpins PropNex’s core earnings from HDB resales but also positions the company to capture upside from new property launches. We expect this dual support to drive a gradual earnings growth from 2025, with momentum building through 2026-2028 as market activity strengthens.

Valuation

Figure 6: PropNex forward P/E ratio (X)

Figure 7: PropNex’s forward P/E and residential property prices

Figure 8: PropNex Share price vs Earnings per share

Figure 9: PropNex earnings per share outlook

Disclaimer: For specific disclosure, at the time of publication of this report, IFPL (via its connected and associated entities) and the analyst who produced this report hold a NIL position in the abovementioned securities.

This research report is produced under the Grant for Equity Market Singapore (“GEMS”) Scheme. iFAST Financial Pte Ltd receives financial compensation for the preparation and publication of this report. For more information regarding the GEMS scheme and its objectives, please refer to this infographic. iFAST Financial Pte Ltd maintains editorial independence regarding the analysis and conclusions presented herein.