APAC Realty (CLN.SI) saw its stock price plummet by 4.79% during Tuesday's trading session, following a downgrade by RHB analyst Vijay Natarajan. The sharp decline comes despite expectations of strong sales growth for the company in the near future.
RHB has lowered its rating on APAC Realty from Buy to Neutral, citing concerns that the stock's recent surge has put it ahead of fundamentals. The company's shares have skyrocketed 129% year-to-date, driven by strong primary residential sales that more than doubled its first-half net profit. However, RHB believes this rapid appreciation has led to overvaluation.
Despite the downgrade, RHB has raised its target price for APAC Realty to S$0.80 from S$0.54, reflecting an improved outlook. The analyst expects the company to post 30%-40% primary residential sales growth in 2025 and projects its overseas operations to turn profitable by year-end. However, earnings are anticipated to decline slightly in 2026 as volumes normalize, which may have contributed to investors' decision to sell off the stock following the rating change.