1) dividend yield (annualized) of 5.26%
2) forward p/e 8.7
3) market sentiments on property improving
4) 3rd quarter figures show some improvements in the number of units sold
5) trading below nta of 43.1 cents
6) net cash w cash of S$34.2 mil against debt of S$53.1 mil
DBS Group Research has upgraded its recommendation on real estate services provider Apac Realty, which owns ERA Realty Network, to " buy" from " hold". The research team cited better-than-expected property transaction activities and " attractive valuations" .
It has also raised its target price (TP) on the counter to S$0.53, from S$0.40 previously. The revised TP represents a 39 per cent upside from Apac Realty' s Friday close of S$0.38.
As at 1.05pm on Monday, the counter was trading at 39.5 cents, up 1.5 cents or 4 per cent.
" The property market was resilient amid the Covid-19 pandemic. Transaction activities in the various segments only saw a slight decrease of between 1.2 percent and 5.2 percent year on year in 9M 2020," wrote DBSanalyst Ling Lee Keng in a research note on Monday.
Maintain BUY with a higher DCF-derived TP of SGD0.55 from SGD 0.50, 28% upside with c.5% yield. Singapore residential volumes have staged a strong rebound in 3Q, with recovery seen across both primary and resale market. ERA Realty (ERA), APAC's wholly-owned subsidiary, which commands c.33%
residential market share, is well-positioned to ride on this recovery. The stock current P/E of 10x isnot expensive in our view when compared to low-mid teen levels typically seen during market upcycles.
Above is an extract from RHB report dated 23 Nov 2020
