PropertyGuru Group Limited

Hi, everyone. We're going to wait about 10, 15 seconds for all the attendees to come in. OK, looks like we're ready to go. So thank you for standing by, everyone, and welcome to the Property Guru Group fourth quarter and full year 2023 earnings conference call. Currently, all participants are in a listen-only mode. As a reminder, today's program will be recorded. If anyone objects, please disconnect now. Now let me introduce Mr. Nat Otis, Vice President of Investor Relations. Mr. Otis, please go ahead.

Good morning and good evening. Welcome to Property Guru Group's fourth quarter and full year 2023 earnings conference call. On the call today are Hari Krishnan, CEO and Managing Director, and Joe Disch, CFO. Before we get started, a few reminders. Firstly, our results are available in the earnings release that can be found in the investor section of our website. Secondly, today's webcast is being recorded. Replay along with transcript will also be available in the investor section of our website. Thirdly, we will be making forward-looking statements, including but not limited to statements regarding our future results and expectations for the business. These statements are neither promises nor guarantees and involve risks and uncertainties that may cause actual results to vary materially. Please refer to our earnings release and SEC filings for more information regarding risk factors. Forward-looking statements are based on current expectations and the company is not obliged to update them, except as required by law. Fourthly, this call will also contain non-IFRS financial measures. For reconciliation of non-IFRS financial measures to the most directly comparable IFRS metric, please see our earnings press release. Lastly, all dollar references are in Singapore dollars unless otherwise stated. With that, let me turn the call over to Hari.

Thank you for joining us today for our fourth quarter and full year 2023 earnings conference call. 2023 was a year in which PropertyGuru demonstrated strength and agility with double-digit revenue growth and double-digit adjusted EBITDA margin while navigating a challenging and unpredictable macroeconomic environment. These results underscore our strong execution and ability to focus investments against a backdrop of varying market conditions, especially in Malaysia and Vietnam. We remain confident in our ability to be the trusted advisor for our residential customers as they strive to achieve their home ownership goals and help our business customers unlock their true potential using PropertyGuru's data and technology solutions. Despite uneven market recoveries across the globe, Southeast Asia remains a dynamic region poised to expand and prosper, with its property markets benefiting from growing middle classes, increasing urbanization, and significant public and private investment in infrastructure. In Singapore, property market activity eased in 2023 as governmental cooling measures, higher interest rates and tight supply impacted buying cycles, creating greater competition between agents and translating into increased demand for our products. With inflation in check, supply is beginning to return to the market with close to 100,000 public and private units expected to be added between 2023 and 2025. Construction-related GDP was up almost 8% in 2023, which bodes well for the health of the property sector going forward. While overall GDP growth moderated in 2023, an improvement is expected in 2024. I would also like to highlight trends like interest in properties in the outskirts of Singapore, near newly constructed Mass Rapid Transit or MRT stations, and the continued demand for sustainable property development. As a result, Singapore continues to be a strong market for PropertyGuru as we enter 2024, demonstrating the value-add of our products even when transaction volumes decline. In Malaysia, housing affordability was a key issue in 2023, as higher interest rates, a reduction in the value of the ringgit, and poor wage inflation weighed on consumer sentiment. Our consumer sentiment survey noted that 87% of respondents found price to be a deterrent to buying a home, with 50% of them planning on renting instead. Malaysia's GDP is expected to increase marginally in 2024, with the government making significant or rather specific budget allocations for affordable housing projects, housing credits for low-income borrowers, and incentives for developers to revive abandoned projects. Longer-term infrastructure spending should provide a solid boost to the market. The hugely important Rapid Transit System, or RTS, connecting the southern Malaysian state of Johor with Singapore is two-thirds complete. This has already resulted in an encouraging increase in housing demand on the Malaysian side and will result in increased demand in Singapore as well. Insights from our proprietary data and intelligence tool, DataSense, confirm this trend as the top residential projects in Malaysia based on demand are currently located in Johor. As we enter 2024, we see encouraging trends in Malaysia that could help bolster our business as the market regains momentum. 2023 was a challenging year for Vietnam. Property market activity was down substantially due to reduced credit availability and negative consumer sentiment, while the overall economy took a step back with 2023 GDP growth of 5% versus 8% in 2022. We continue to take a cautious approach in Vietnam and believe the market trajectory could improve in the second half of 2024 and in 2025 as economic output returns and supply chains reopen. Strong urbanization trends also continue in the country as housing new city dwellers continues to be a priority for the government. Reduced borrowing rates due to four interest rate cuts in 2023 and continued infrastructure investment should also help facilitate demand. Lastly, supply in the key cities of Hanoi and Ho Chi Minh City is also expected to improve in 2024. Vietnam remains one of our key marketplaces, given its market dynamics and tremendous potential. We continue to actively restructure our operations and revise our sales strategy in preparation for market activity to return. I would like to now update you on the progress within our group. Our internal focus remains the same. We will continue to innovate, automate, and leverage technology as we create value for our customers and help them make confident property decisions. Our confidence is based on our early adoption of generative AI and machine learning into the foundational competence of PropertyGuru's product strategy and operations. For instance, a third of our Singapore listings in the fourth quarter of 2023 used Listing Description Generator, where we leverage generative AI to help our agents improve the quality, content, and style of their listings. We also launched Listing Price Assistant in Singapore in the fourth quarter. Using machine learning, this assistant helps agents with an appropriate price for each property. The response has been promising, with 17% of listings created in the quarter utilizing this tool. This solution increases data accuracy and consumer trust in our marketplace and greatly assists our agent customers too. In the third quarter, we launched lead management to support agents by empowering them with insights on the quality of a lead such as demand index, area and property type. Adoption in Singapore has been a success. By the end of the fourth quarter, over 90% of active agents had used it at least once and 75% were repeat users. In the fourth quarter, we introduced lead management in Malaysia, where we are already seeing good traction with 67% of agents on PropertyGuru Malaysia and 55% of agents on iProperty actively using the product. We continue to invest in our data and software solutions business, leveraging data to build powerful analytical tools that help users identify valuable opportunities and make smarter investment decisions. In December 2023, we introduced the Mall Intelligence Module in DataSense, with commercial launch in Singapore in early 2024. This module will help agents, retailers, mall owners, and investors make informed decisions with regards to their assets or new leases. The module uses our proprietary supply, demand, and pricing insights, coupled with mobility and payments data from our partners. It provides footfall, dwell time, retention rate, and spend data to better understand demographic and consumer trends in the relevant areas. In Malaysia, we are providing access to selected DataSense modules for our agents who can now benefit from critical transaction pricing analytics as well as upgrade to explore insights from our proprietary first-party supply and demand data. In Vietnam and Thailand, we have launched Demand Analytics Pro, our data sense module that helps developers, investors, and agencies use market research, feasibility studies, and other data to assist in the decision-making process. Our fintech business in Singapore continues to grow, with over $6 billion worth of home loans having been brokered through year-end. An excellent sign of the growing trust and confidence that customers have placed in PropertyGuru as they look to secure home financing. With learnings from Singapore, we are now looking to serve the Malaysian market and have launched a home loan eligibility tool in the fourth quarter of 2023. The tool solves a key pain point by giving consumers an instant assessment of loan eligibility based on their debt servicing ratio, thereby reducing the likelihood of loan rejection. Lastly, earlier this week, we undertook a strategic re-architecting of our organization to optimize our size and structure to reflect the market opportunity in 2024 and beyond. This decision impacted approximately 5% of our roles across offices as we focused the team on strategies central to our future growth. For employees who were impacted, I would like to thank you for your contributions to PropertyGuru and wish you the best in your future careers. As we enter 2024 and our third year of being a public company, I would like to say how proud I am of what our gurus have accomplished under challenging conditions. Going forward, we will continue to future-proof our business through focused investments to best leverage the dynamism of Southeast Asia and its property markets as we power communities to live, work, and thrive in tomorrow's cities. I will now hand the call over to Joe to walk you through our financials.