PropNex Gains 10% On Trading Debut

Foreword from ShareInvestor

This article “PropNex Gains 10% On Trading Debut” by Rachel Mui was first published in The Business Times on 03 Jul 2018 and is reproduced in this blog in its entirety.

Shares of homegrown property service group PropNex Realty on Monday closed 10 per cent higher on the company’s trading debut on the mainboard, as PropNex becomes the second real estate brokerage to be listed on the local bourse after Apac Realty.

The stock opened at 68.5 Singapore cents apiece on the Singapore Exchange, with the opening price representing a 5.38 per cent premium over the counter’s initial public offering (IPO) price of 65 Singapore cents.

The stock reached an intraday high of 72 Singapore cents on Monday, before closing at 71.5 Singapore cents, up 10 per cent. Some 8.46 million shares changed hands, making it one of the most heavily traded counters for the day.

“PropNex has grown rapidly from strength to strength from a small agency back in 2000, to become Singapore’s largest homegrown real estate agency by number of agents.” Mr Ismail, PropNex’s executive chairman and CEO (above) 

Said PropNex’s executive chairman and chief executive, Ismail Gafoor: “Our IPO is yet another exciting milestone for us as it provides a platform for PropNex to not only further solidify our position in Singapore, but also access to the capital market to expand our business into new consultancy services as well as promising geographical markets, such as Vietnam and other South-east Asian countries.”

Added Mr Gafoor: “PropNex has grown rapidly from strength to strength from a small agency back in 2000, to become Singapore’s largest homegrown real estate agency by number of agents, offering a wide range of services in real estate brokerage, project marketing, training, property management and real estate consultancy.”

Separately, SGX’s head of equity capital market (sectors), Simon Lim, said that investors in Singapore are “well-attuned” to investing in real estate, and that the new listing will provide them with yet another opportunity to “tap the property cycle in Singapore, and in overseas markets where PropNex has a presence”.

PropNex’s IPO closed at noon on June 28 with its public offer tranche 24.6 times subscribed. In particular, some 2.125 million shares that it offered for public subscription drew 1,796 valid applications for about 52.24 million shares.

All in all, the offering was about 2.2 times subscribed based on the 42.5 million shares offered in total. This comprised 40.375 million placement shares and 2.125 million public offer shares.

Concurrently, 50 million shares were also sold at the offer price to cornerstone investors, namely Affin Hwang Asset Management, FIL Investment Management (Hong Kong), Nikko Asset Management Asia, NTUC Income Insurance Co-operative, Samsung Asset Management (HK), and Value Partners Hong Kong.

In its prospectus registered on June 25, PropNex noted that net proceeds from the issuance of new shares and cornerstone investors will stand at about S$38 million. Of this amount, S$12 million is earmarked for local and regional expansion through mergers and acquisitions, joint ventures and partnerships strategy.

Some S$8 million is slated for its real estate brokerage business; S$7 million for expansion in a range of business services; and S$6 million for enhancing technology. The remaining S$5 million will go towards working capital, it said.

PropNex is the largest real estate agency in Singapore by salesforce, with 7,248 agents as at June 6, 2018. According to the SGX, it also has a leading market share in the primary private residential market and the HDB resale market.

With a market cap of about S$240 million, PropNex’s listing will boost SGX’s real estate cluster to a total of 110 listings, with a combined market cap of S$179 billion.