Tuesday, October 19th, 2021

Is it time to buy Propnex(SGX:OYY), again?

Propnex

PropNex Realty‘s spectacular rise to become Singapore’s largest publicly traded real estate brokerage, with over 8,800* salespeople, is an exciting success story. It began in 1999 as the brainchild of two forward-thinking companies, Prulink and Nooris. Mohamed Ismail Gafoor and associates started and developed the company in 2000 with a shared vision of offering top-notch service that clients can rely on. As a result, they were able to benefit from the economies of scale that consumers were able to enjoy as well.

Earning performance:

PropNex, a real estate brokerage, reported a first-quarter net profit of S$14.8 million on Tuesday, nearly double the previous year’s S$7.6 million. For the three months ended March 31, the company reported earnings per share (EPS) of 4.01 Singapore cents, up from 2.05 cents the year before. Revenue increased by 63.3 percent to S$220.6 million, up from S$135.1 million the previous year. Commission income from agency services brought in S$47.5 million, while project marketing services brought in S$38 million.

Recent news:

On May 19th, PropNex announced its expansion to Cambodia, its fourth overseas market. It has also worked with developers on two market-ready projects. Urban Village, a mixed-use complex spanning 760,000 square meters in Phnom Penh along Hun Sen Blvd, was also developed by PropNex Cambodia in collaboration with Hong Kong developer Urban Hub (Cambodia) Co.

On the night of July 16, Propnex responded to an SGX question by claiming it was unaware of any new information about the firm that had not been previously announced. “As Singapore’s largest listed real estate brokerage, PropNex is a direct beneficiary of Singapore’s stable property market and positive economic outlook,” it added.

Is it time to buy Propnex(SGX:OYY), again?

Is it time to buy Propnex(SGX:OYY), again?

Against a backdrop of strong earnings performance, Propnex’s share price has risen from $0.44 since March last year to a high of $2.21 in July this year – an increase of almost 500% in 16 months! After being in a sideways consolidation for the past 2 weeks, the stock price was again on the verge of a breakout last Friday, August 6. On this day, Rainbow Oscillator also turned positive.

At the same time, the Welles Wilder Smoothing indicator and the TMA indicator were about to form a golden cross. We know from experience that the stock price shot up aggressively on June 30 when the indicators formed a similar golden cross.

Is it time to buy Propnex(SGX:OYY), again?

At the same time, three other indicators, namely the Supertrend indicator, the Random Walk index and the Elder Ray indicator, had also triggered a golden cross signal on the same day. These multiple Golden Cross signals help to increase the probability that the breakout will succeed, and the price will continue its rally.

The Super Trend Indicator is a trend indicator used to determine whether the price is moving up or down. If the price is above the line, it is considered support; if it is below the line, it is considered resistance. The Supertrend indicator is an effective indicator when applied to the Propnex chart.

Is it time to buy Propnex(SGX:OYY), again?

If the Propnex price manages to break above the resistance line, the first upside target is $2.15, followed by $2.24. This is based on the 100% and 161.8% Fibonacci projection from the low of the sideways range. If a trader buys at the current price, he can make a potential profit of 16% to 25% based on the target price.

Is it time to buy Propnex(SGX:OYY), again?

On the other hand, traders should set their stop loss level at $1.83, the low of the sideways range. This is a good trade setup as the risk-reward ratio based on the first price target and the stop loss price is already more than 100%.

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