DBS Group Research has maintained its "hold" call on APAC Realty on Wednesday (Feb 23), with a lower target price of S$0.67 from S$0.88 previously.

This comes despite the real estate services provider's "strong" FY2021 results reported on Tuesday. APAC Realty saw its earnings jump 11.3 per cent to S$18.3 million for the second half ended Dec 31, 2021, on the back of an increase in revenue.

DBS analyst Ling Lee Keng said the change in target price factors in lower transaction volume assumptions, represented by a revision of expected earnings for FY2022 and FY2023 by 24 per cent and 22 per cent respectively.

The target is pegged to about 10 times expected earnings for FY2022, equivalent to its average 4-year price-to-earnings ratio.

The cut in transaction volume projections is attributed to an impact from cooling measures and rising interest rate environments on the property market, Ling added.

According to Ling, APAC Realty has a "proven resilient business model" but will still be affected in the near term.

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With fewer new launches in the pipeline for 2022 as compared to 2021 and depleting inventory of unsold units as well as construction delays, she believes overall transaction value is expected to ease about 30 per cent in FY2022.

She expects a drop in private new home sales, resales and Housing Board (HDB) resales. For the new home sales segment, Ling cut projections for FY2022 to FY2023 by 18 to 26 per cent. She also lowered estimates for the private resale segment by 6 to 10 per cent and penciled HDB resale expectations by 11 to 12 per cent for the same period.

Shares of APAC Realty were trading up 8.5 per cent or S$0.055 at S$0.70 as at 2.54 pm on Wednesday.