PropNex Ltd – More resilient than expected

• 3Q20 PATMI rose 10.6% YoY to S$6.8mn, far exceeding our forecast. 9M20 earnings form 111% of our FY20e forecast. Despite lockdown, new project revenue was more resilient than expected.
  
• Revenue from new projects rose 15% YoY to S$51.9mn. Higher market share, billing of earlier projects and successful virtual selling were some of the reasons.
• Net cash of S$94.7mn, up from 3Q19’s S$74.5mn.
• Maintain BUY with a higher DCF TP of S$0.85, from S$0.70. Circuit breaker might have affected resale and rental revenue but not new project sales. Yields of 6% and cash flows of S$28mn p.a. with modest capex and working-capital requirements are what we like about PropNex.