Stock Evaluation and Commentary: APAC Realty | Lianhe Zaobao
APAC Realty suggests a neutral rating, with a target price of 0.80 yuan, closing price at 0.895 yuan (-4.79%). The net profit for the first half of the year was 11.3 million yuan, a year-on-year increase of 176%. Despite strong new home sales, growth is expected to slow down. The company plans to issue one bonus share for every five shares to reward shareholders, and new home sales are expected to increase. Net profit forecasts for the fiscal years 2025 to 2027 have been raised by 39%, 25%, and 28%, respectively. The stock price has risen by 129%, with a current price-to-earnings ratio of 16 times, and the rating has been downgraded from "Buy" to "Neutral."
APAC Realty
- Recommendation: Neutral
- Target Price: CNY 0.80
- Closing Price: CNY 0.895 (-4.79%)
Benefiting from a significant increase in sales revenue from new real estate projects, APAC Realty's net profit (PATMI) reached CNY 11.3 million in the first half of the year, a year-on-year increase of 176%. Although new home sales remain strong, the growth rate is expected to slow compared to the first half of the year. The company announced a plan to issue one bonus share for every five shares held to reward shareholders, which will theoretically lower the price per share due to the increase in total shares.
The company operates overseas in Indonesia, Thailand, Vietnam, and Malaysia. Despite overseas operations still incurring losses due to market conditions, the company expects to achieve profitability by the end of this year, driven by an improved outlook in the Vietnamese market.
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Due to the anticipated increase in new home sales, we have raised our net profit forecasts for the fiscal years 2025 to 2027 by 39%, 25%, and 28%, respectively.
However, APAC Realty's stock price has risen 129% this year, currently trading at a forecasted price-to-earnings ratio of 16 times for fiscal year 2025, slightly above its fundamentals. We are downgrading our rating from "Buy" to "Neutral." As sales return to normal levels, profits are expected to decline slightly next year, but a dividend yield of about 5% may partially mitigate downside risks. (Industrial Bank Research)
