Disclaimer: I have no MBA or formal training in finance. My only business experiences come from running a content agency over the past 5 years, and managing a portfolio since September 2016. In these articles I highlight the qualitative aspects of the business, and what I learn from those business leaders in terms of how to better run my own business.
When Kelvin Fong, the Deputy CEO of Propnex today was in his 20s, his grandparents fell ill. They needed medical treatment. His parents and their siblings were unable to afford the treatment.
His mum asked him to take the angbaos and savings he had put away over the years, and pay for their treatment.
Till date, Kelvin still remembers that incident. It’s clear that incident has scarred him, because he says in his documentary, “I still think “what if not enough, not enough, not enough?””
It’s why I don’t think you should underestimate both Kelvin, and CEO Ismail.
Whenever I share about PropNex with people, there’s always that uncle that tells me, “yes, but you forget that when markets go down, they can really go down. How does PropNex earn in those down markets?”
Tails or heads, PropNex wins
What people often don’t note is how PropNex earns money through volumes, rather than value.
In this respect, they are more like the Singapore Stock Exchange. People are always going to buy and sell homes.
And in bad times, people might also liquidate their home asset, moving to a smaller unit, to unlock the gains from their first home.
In a bad market where transactions fall, that’s where you should look at what they do.
And Deputy CEO Kelvin Fong and CEO Ismail have done alot over the past two years of the down market.
Rags to riches maketh a man
People underweight what two rags to riches directors can do to a company. CEO Ismail and Kelvin are both from humble backgrounds, and they have staked a sizable chunk of their wealth in this company.
But what people also underestimate is how mature they are as businessmen.
During the annual general meeting (AGM), when I asked about what they thought about the $1999 model, I was surprised when Ismail told me that PropNex was there to coexist with them. There was no denigration of the competition, and there was an honest assessment that this service was useful for the budget end of the market.
But more importantly, it’s how they have stewarded the company through what has been a very painful down cycle for property.
No one likes to see the graph above.
When I asked about whether the $1 billion revenue mark they passed in 2023 was a once-off, Ismail said they were hopeful that it wasn’t. If you look at the past 2 years, property has become a political hot potato. The government has been keen to flatten the profiteering from private property sales, and has introduced cooling measures. Just look at the orange bars below to see how many cooling measures they introduced.
Add to that the rising interest rates, and people have held off property transactions.
Focus on customer stickiness
Yet through that, they have continued to focus on the theme of consumer empowerment.
No one might quite understand why they do the Monopoly championship every year but it essentially teaches property, from a young age.
Customer lock in.
“Consumer stickiness.” It was a theme that Kelvin harped upon as he spoke about why they did things like consumer empowerment seminars, sharing about the PropNex Wealth System and doing things like the Monopoly Championships. People aren’t always in the market.
But when they are, they know who to find.
PropNex.
Data helping customers
But okay, you might argue that there are so many property agencies. What differentiates PropNex?
Kelvin says it’s the technology. They have an app at their fingertips that allows them access to the recently transacted prices, the units that are on the market, so that buyers can immediately know where to go.
PropNex currently has a team of over 40 full-time app developers who work on its extensive suite of tools that are constantly being upgraded. The tools are housed in the Company’s two signature proprietary apps — PropNex Investment Suite and its recently enhanced PropNex Business Suite.
That said, people might argue that the underlying business isn’t improving.
Yes, if you look at the first half of 2024, it was bad.
Things are getting better
In Ismail’s Chairman Statement, he recognized how it was a tale of two halves. Whilst demand was flagging in the first half of 2024, the demand rose sharply in the last half.
He was bullish about how Q4 2024 ended for him.
PropNex capitalised on this upswing, with nearly 50% of its total private new home transactions in 2024 occurring in 4Q2024.
- Chairman’s Statement, Annual Report 2025
As people price in more rate cuts, it’s looking like people are going to buy more.
It’s not the foreign rich people who are buying
I was curious about whether it was just the rich people who were looking to divert their wealth abroad that was driving most of the sentiment.
Interestingly, Kelvin said it was mostly local demand. And what was more interesting was that these are still residential buyers.
When I asked Kelvin if there was a difference in profit margins between the launch marketing they did, versus the housing transactions, he pointed out that for launch marketing, the money came in faster.
This again is good news, given that PropNex has such a large inventory of projects on hand.
Still a buy?
Of course here the question always is,
should you buy PropNex at this price?
I would, because I confess.
I’m stupid.
But I don’t think Kelvin Fong is stupid. I’ve once heard it said.
Insiders can sell shares for an infinite number of reasons,
but they only buy shares for one reason.
To make money.
I believe the exact same is true for Kelvin. For him to be so bullish about his company is just a sign for me to follow.