PropNex - Strong new home sales drove steady dividends

Strong profit growth in FY2025 led by new home sales

Revenue grew by 18.3% year-on-year to S$517.5 million in 2H 2025, driven by strong momentum in new private residential project launches. PropNex’s Project marketing segment reported revenue of S$175.5 million, increasing by 86.1% year-on year. Meanwhile, revenue from Private and HDB Resale segments dipped 2.5% year-on-year to S$188.8 million. Rental segment reported stable revenue at S$103.8 million, a marginal increase of 0.6% year-on-year. 

For the full year FY2025, revenue surged 42.6% year-on-year to S$1.12 billion, driven by a strong pickup in transaction activity, particularly in the primary market. Cost of services rose broadly in line at 40.0% year-on-year, but operating leverage still came through.

Profit attributable to owners grew 72.0% to S$70.4 million, outpacing revenue growth. As a result, net margin expanded to 6.7% from 5.3%. The margin improvement reflects a richer mix from project marketing and higher-value transactions.

By segment, project marketing more than doubled, up 133.9% to S$434.0 million. Private resale rose 28.8% to S$234.2 million, while landed resale jumped 50.3% to S$61.7 million. Rental grew 5.6% to S$191.2 million. HDB resale was the only softer spot, easing 1.7% to S$153.5 million. The growth profile shows the rebound was broad-based but clearly led by new launches.

Revenue growth in FY2025 was volume-driven and skewed towards the primary market cycle. While momentum is likely to ease in FY2026, higher selling prices, sustained volume in private residential segment and growth in the non-residential segment should help sustain revenue at a stable level.

2H FY25 dividend per share rose by 50% year-on-year

PropNex recommended DPS of 4.50 cents for 2H FY2025, an increase of 50% year-on-year. The higher dividend per share was driven by strong revenue growth in the new private residential segment.

Total dividend per share in FY2025 of 9.50 cents is the highest total dividend since listing. This translates to dividend payout ratio (DPR) of 99.9% of profit after tax and non-controlling interests. This exceeds PropNex’s policy to maintain dividend payout ratio in the 75% to 80% range. 

New launches reached a new high in 2025 

In 2025, there were 27 new projects launched totalling 12,773 units, the highest since 2013 and significantly  higher than the estimated 6,650 new units launched in 2024. 

Overall, in Singapore private residential market, 10,815 new private residential units were sold in 2025, an increase of 67% year-on-year. 

The pipeline of new residential and industrial development remains firm in 2026. Around 27 new residential projects, comprising 11,828 units, are scheduled to be launched. On the industrial front, about 730 units are expected to be launched in 2026.

Healthy financial indicators in FY2025

PropNex reported 2H2025 gross profit margin of 9.4%, compared with 8.6% in 2H2024. Higher proportion of new home sales which command higher profit margin drove a 80 basis points uplift in gross profit margin. 

The balance sheet remains healthy with adequate financial flexibility. Cash and cash equivalents rose sharply to S$149.1 million, up from S$111.8 million a year ago. Total  debt increased to S$4.7 million but PropNex maintained a solid net cash position. 

Equity eased slightly to S$116.1 million, reflecting dividend distributions, but the capital base remains adequate. Net asset value per share dipped to 15.69 cents from 16.68 cents, though this is not a credit concern given the asset-light nature of the business.

Liquidity coverage is strong. The business does not rely on external debt to fund operations and working capital needs are largely self-funded. The balance sheet risk is low. In a downturn, the company has the financial flexibility to absorb softer volumes without balance sheet strain, and in an upcycle, it has capacity to fund expansion or sustain dividends without stretching its credit profile.

Cash flow generation strengthened meaningfully in FY2025, reinforcing the group’s liquidity position.

Operating cash flow rose to S$91.2 million, more than doubling from S$38.0 million in FY2024. This tracks the sharp improvement in earnings and indicates good cash conversion despite higher receivables in a strong transaction year. For an asset-light brokerage model, that level of operating inflow is solid and sustainable as long as volumes hold up.

Investing activities recorded a net inflow of S$29.0 million, largely from a reduction in other investments and long-term deposits. There was no heavy capex burden, which keeps free cash flow structurally strong.

On the financing side, the group paid out S$77.7 million in dividends to shareholders, alongside S$3.1 million to non-controlling interests. Even after these sizeable distributions, cash still increased by S$37.2 million for the year.

Ending cash and cash equivalents stood at S$149.1 million, up from S$111.8 million. Importantly, this cash build came after funding dividends, lease payments and working capital needs, without reliance on borrowings.

Thus, cash flow adequacy is strong. Operating cash comfortably covers dividends and recurring obligations, and the company continues to accumulate liquidity. The balance sheet is not being stretched to support shareholder returns. The key swing factor remains transaction volumes, but at current levels, internal cash generation is more than sufficient to fund operations and distributions.Top of Form

Outlook of Singapore property market

In 2H 2025, the industry’s transacted volume of new homes, excluding executive condominium, increased by 36% year-on-year to 6,228 units. For the full year 2025, prices in Singapore home market remain strong. In 2025, private price and HDB price rose by 3.3% and 2.9% year-on-year, respectively. 

In 2H 2025, there were a strong pipeline of new projects launched, with around 7,340 new units launched. This brings total new home units launched to 12,769 units in 2025, an increase of 92% year-on-year. In 2026, APAC Realty estimates 11,828 units from new launches. 

We remain optimistic that financial performance will be supported by a healthy take-rate and moderate price increases. Pent-up demand for new private residential homes is expected to continue to support transacted volume in 2026. Prices of private residential homes are expected to rise by 3% to 4% in 2026. 

For 2026, PropNex remains optimistic on the property market. PropNex is forecasting private home sales volume around 9,000 units, compared with 10,815 units in 2025. Private home sales will benefit from moderation in mortgage rates, resilient economic conditions, and recovery in buying appetite. PropNex expects HDB resale volume to range 26,000 to 27,000, compared with 26,169 units in 2025 as resale HDB flat demand remains stable. 

In terms of price appreciation, PropNex is forecasting 3% to 4% rise in overall private home prices and HDB resale prices to increase by 3% to 4%. 

Key risks

Cyclical nature of real estate demand. The real estate market is cyclical, influenced by economic conditions, interest rates, and consumer confidence. During economic downturns, property transactions typically slow, impacting commission income. A sustained market slowdown could significantly reduce revenue and profitability. 

Government cooling measures. The Singapore government actively implements property cooling measures, such as Additional Buyer’s Stamp Duty (ABSD) and Total Debt Servicing Ratio (TDSR), to manage property prices. These regulations can dampen transaction volumes, particularly in the private residential segment, affecting  revenue from project marketing and resale transactions. 

Country concentration. Singapore remains the core market for PropNex. There is significant concentration risk . Furthermore, Singapore’s property market is subjected to frequent government’s intervention. Since 2013, the Singapore government has implemented a series of property cooling measures to curb excessive market speculation. 

Valuation

Maintain at Neutral with 19.6% upside

We maintain the target price at S$2.32 which translates to our forecast FY2027E dividend yield of 4.3%. Currently trading at S$1.94, PropNex offers a potential upside of 19.4%. The recent correct offers an attractive opportunity to buy PropNex. 

As a dominant property agent in Singapore with 37.9% market share, by number of agents, PropNex is able to ride through cyclicality better than the competitors. In addition, PropNex has historically maintained a high level of dividend payout ratio, consistently rewarding shareholders.

Related links:

• PropNex Limited share price history and share price target
• PropNex Limited history and dividend forecasts

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