PropertyGuru Group (PGRU) Risk Analysis

The Company is a holding company, and our subsidiaries are located throughout Southeast Asia in Singapore, Vietnam, Malaysia and Thailand. Part of our primary internal sources of funds to meet our cash needs will be our share of the dividends, if any, paid by our subsidiaries. The distribution of dividends to us from our subsidiaries in these markets as well as other markets where we operate is subject to restrictions imposed by the applicable laws and regulations in these markets.

We are exposed to potential risks and liabilities arising from improper, illegal or otherwise inappropriate activity taken by customers who use our platform and any other third parties with whom we partner or transact from time to time. There can be no assurance that we will be able to identify and address all instances of improper, illegal or otherwise inappropriate activity on, or facilitated by or through, our platform in a timely manner or at all. Such inappropriate activity may give rise to customer or third-party claims and customers or the general public may lose confidence in our platform and our brand.

We are subject to the tax laws and policies of each of the countries in which we operate. Since legislation and other laws and regulations (particularly in relation to tax) in emerging markets, such as the markets where we operate, are often undeveloped and the interpretation, application and enforcement of tax laws and policies in emerging market countries is uncertain, there is a risk that we may be unable to determine our taxation obligations with certainty. We obtain external tax advice from time to time on the application of tax laws to our operations. Due to the aforementioned challenges of interpretation and consistency of application and enforcement, obtaining such advice may be difficult and opinions on the law may differ. The determination of our provision for tax liabilities requires significant judgment and estimation and there are classifications, transactions and calculations where the ultimate tax payable is uncertain. Our tax exposure and obligations exist in each of the jurisdictions in which we presently operate and may arise in other jurisdictions in the future in the event that we commence operations in such new jurisdictions, either organically or through acquisitions. These risks may increase when we acquire a business, particularly to the extent that there are limitations or restrictions on the scope or nature of the financial, tax and other due diligence investigations that we are able to undertake in connection with the acquisition, or where the vendors withhold material information. Given the nature of our business, we are also exposed to the developments in digital taxation policy. From time to time, we establish provisions to account for uncertainties as well as timing and accounting differences in respect of income tax and indirect taxes, including but not limited to in relation to businesses that are acquired by us. While we have established our tax and other provisions using assumptions and estimates that we believe to be reasonable, these provisions may prove insufficient given the risks and uncertainties inherent in the taxation systems in the countries where we operate. Any adverse determinations by a revenue authority in relation to our tax obligations may have an adverse effect on our business, financial condition and results of operations, and may adversely impact our operations in the relevant jurisdiction and our reputation.

As PropertyGuru is a Singapore-incorporated company, we are, with regards to privacy legislation, subject principally to the Personal Data Protection Act 2012 ("PDPA") in relation to the collection, use and/or disclosure of personal data. See "Item 4. Information on the Company -B. Business Overview-Regulations." Similarly, there are personal data protection laws and regulations imposed on our group companies in each of the other Priority Markets and India, where a number of our employees are located. We have obligations under Malaysia's Personal Data Protection Act 2010, Thailand's Personal Data Protection Act 2019, India's Digital Personal Data Protection Act 2023 and Vietnam's data protection, personal information and privacy regulations set out in the Constitution 2013, the Civil Code 2015 and in sectoral laws including but not limited to the Law on Network and Information Security 2015, the Law on Cybersecurity 2018, Decree No. 53/2022/ND-CP and Decree No. 13/2023/ND-CP. While we have implemented cybersecurity and privacy measures to protect personal data and confidential information in accordance with applicable laws, any failure to comply with such data protection requirements as a result of cybersecurity attacks, data breaches and general unauthorized accesses to computers, networks and data may subject the Company to penalties, regulatory scrutiny and in the worst case, license suspension and additional liability, and we may incur additional significant costs to maintain or regain compliance. We may also incur significant time, resources and costs to comply with new personal data protection and information security laws or regulations or enhanced disclosure obligations that are implemented in any of the countries in which we operate or otherwise apply to us. Any of the foregoing could have a material adverse effect on our business, financial condition and results of operations. We have also aligned our practices with the Practice Guidelines on Ethical Advertising issued by the Singapore Council for Estate Agencies (the "CEA Practice Guidelines"). The CEA Practice Guidelines seeks to provide estate agents and salespersons with clear and detailed guidelines on the use of advertisements to comply with the Code of Ethics and Professional Client Care (set out in the Estate Agents (Estate Agency Work) Regulations 2010) and establish best practices in advertisements. While our management has confirmed that we are not regulated by the Council for Estate Agencies, as a publisher of property listings, we nevertheless observe the CEA Practice Guidelines as a matter of best practice. Other than in Malaysia, where registered estate agents are required to comply with advertisement and publicity requirements, there are no similar regulations and guidelines in our other Priority Markets. We are subject to many other laws and regulations, including but not limited to those related to intellectual property, protection of minors and property seeker protection. We are also subject to laws and regulations in our other Priority Markets which regulate our right to operate a business there, including but not limited to foreign ownership restrictions. These laws and regulations are constantly evolving and may be interpreted, applied, created, or amended, in a manner that could materially harm our business, require changes to our business model or restrict our practices in certain jurisdictions. Whilst we monitor legal and regulatory developments in the places that we operate to implement measures and develop policies and procedures to address those laws and regulations, we cannot confirm that we are materially compliant with all such laws and regulations.

Companies across industries are facing increasing scrutiny from a variety of stakeholders related to their ESG and sustainability practices. Expectations regarding mandatory and voluntary ESG initiatives and disclosures and consumer demand for alternative forms of energy may result in increased costs (including but not limited to increased costs related to compliance, stakeholder engagement, contracting and insurance), changes in demand for certain products, enhanced compliance or disclosure obligations, or other adverse impacts to our business, financial condition, or results of operations. While we may at times engage in voluntary initiatives (such as voluntary disclosures, certifications, or goals, among others) to develop the ESG profile of our company or to respond to specific or general stakeholder expectations, such initiatives may be costly and may not have the desired effect. Expectations around our company's management of ESG matters continues to evolve rapidly, in many instances due to factors that are out of our control. Such initiatives may also not be cost effective in achieving their goals and may not be considered to achieve return on the investment. For example, we may ultimately be unable to complete certain initiatives or targets, either on the timelines initially announced or at all, due to technological, cost, or other constraints, which may be within or outside of our control. Moreover, actions or statements that we may take based on expectations, assumptions, or third-party information that we currently believe to be reasonable may subsequently be determined to be erroneous or be subject to misinterpretation. If we fail to, or are perceived to fail to, comply with or advance certain ESG initiatives or goals (including the timeline and manner in which we complete such initiatives or achieve such goals), we may be subject to various adverse impacts, including reputational damage and potential stakeholder engagement and/or litigation, even if such initiatives or goals are voluntary. For example, there have been increasing allegations of greenwashing against companies making significant ESG claims due to a variety of perceived deficiencies in performance or methodology, including as stakeholder perceptions of sustainability continue to evolve. Simultaneously, there are efforts by some stakeholders to reduce companies' efforts on certain ESG-related matters. Both advocates and opponents to certain ESG matters are increasingly resorting to a range of activism forms, including media campaigns and litigation, to advance their perspectives. To the extent we are subject to such activism, it may require us to incur costs or otherwise adversely impact our business. Certain market participants, including major institutional investors and capital providers, use third-party benchmarks and scores to assess companies' ESG profiles in making investment or voting decisions. Unfavorable ESG ratings could lead to increased negative investor sentiment towards us, which could negatively impact our share price as well as our access to and cost of capital. To the extent ESG matters negatively impact our reputation, it may also impede our ability to compete as effectively to attract and retain employees or customers, which may adversely impact our operations. In addition, we expect there will likely be increasing levels of regulation, disclosure-related and otherwise, with respect to ESG matters. For example, on March 6, 2024, the SEC adopted final rules to enhance and standardize climate-related disclosures by requiring registrants to disclose certain climate-related information in registration statements and annual reports. The final rules will become effective 60 days following publication of the adopting release in the Federal Register. The final rules are subject to litigation in the U.S., and the outcome of this litigation is currently unknown. As an accelerated filer, if the rules become effective and are not overturned, we will be required to provide the enhanced climate-related disclosures in our annual report for the year ending December 31, 2026. Compliance with these new rules may require us to incur significant additional costs to comply, including the implementation of significant additional internal controls, processes and procedures regarding matters that have not been subject to such controls in the past, and impose increased oversight obligations on our management and board of directors. For more information please also see "-Regulations regarding environmental matters and climate change may affect us by substantially increasing our costs and exposing us to potential liability." This increase in the quantity and detail of ESG information that is subject to mandatory disclosure requirements, combined with developing stakeholder expectations will likely lead to increased costs as well as scrutiny that could heighten all of the risks identified in this risk factor. Additionally, many of our suppliers, business partners and others in our value chain may be subject to similar expectations, which may augment or create additional risks, including risks that may not be known to us.

We use open-source software in our services and will continue to use open-source software in the future. Use and distribution of open-source software may entail greater risks than use of third-party commercial software, as open-source licensors generally do not provide support, warranties, indemnification or other contractual protections regarding infringement claims or the quality of the code. To the extent that our services depend upon the successful operation of open-source software, any undetected errors or defects in this open-source software could prevent the deployment or impair the functionality of our platform and consequently out ability to deliver services to customers, delay new solutions introductions, result in a failure of our platform, and injure our reputation. Some open-source licenses contain requirements that we make available source code for modifications or derivative works we create based upon the type of open-source software we use, or grant other licenses to our intellectual property. If we combine our proprietary software with open-source software in a certain manner, we could, under certain open-source licenses, be required to release or license the source code of our proprietary software to the public. From time to time, we may be subject to claims asserting ownership of, or demanding release of, the source code, the open-source software and/or derivative works that were developed using such software, requiring us to provide attributions of any open-source software incorporated into our distributed software, or otherwise seeking to enforce the terms of the applicable open-source licenses. These claims could also result in litigation, require us to purchase a costly license or require us to devote additional research and development resources to re-engineer our software or change our products or services, any of which could adversely affect our business, financial condition and results of operations.

In the past we have derived and we believe that we will continue to derive a significant portion of our revenue from our agents business across Southeast Asia and, in particular, in Singapore. In 2023, agent revenue accounted for 81.2% of our revenue, and 65.9% of our agent revenue was generated from Singapore. In 2022, agent revenue accounted for 79.7% of our revenue, and 57.0% of our agent revenue was generated from Singapore. In 2021, agent revenue accounted for 76.4% of our revenue, and 60.3% of our agent revenue was generated from Singapore. Adverse developments affecting business activity in Singapore or our agents business may have a material adverse effect on our business, financial condition and results of operations. There can be no assurance that we will be able to sustain the number of agents and digital property listings necessary to maintain and grow our agents business in Singapore or in general. Furthermore, there can be no assurance that we will succeed in expanding our agents business outside of Singapore or in growing our developers, Fintech and data services.

Currently, we generate revenue primarily through sales of digital classifieds and property development advertising products and services to real estate agents and developers, which we refer to as customers. Our ability to attract and retain customers, and ultimately to generate advertising revenue, depends on a number of factors, including but not limited to: - increasing the number of consumers who conduct property searches and access property related information research using our platform;- competing effectively for advertising dollars with offline advertising channels and other online media companies;- continuing to develop our advertising products and services;- keeping pace with changes in technology and with our competitors including, for example, the impact of artificial intelligence on the way property search works and our ability to monetize it;- offering attractive cost effectiveness to our customers for their advertising spending on our digital platform; and - the prevailing economic and real estate market trends and the impact of government policies in each market. We may not succeed in capturing a greater share of our customers' advertising expenditure if we are unable to convince them of the effectiveness or superiority of our products compared to alternatives, including but not limited to traditional offline advertising media. Property developers, in particular, continue to allocate significant advertising expenditure for the sales of residences in their new property developments to print media, including but not limited to large display advertisements in newspapers, and other media such as billboards. This is significant because property advertising in our Priority Markets predominantly involves these primary transactions (i.e., new developments advertised by property developers or their marketing agents). We also compete for a share of advertisers' overall marketing budgets with other PropTech companies in our Priority Markets. If we are unable to attract new customers in a cost-effective manner or if existing customers reduce or discontinue their subscription or advertising spending with us, our business, financial condition and results of operations could be adversely affected.

The possibility of downturns or turbulence in global financial markets and economies as well as fiscal policies in our Priority Markets has had, continues to have, and may increasingly have a negative impact on property seekers, our customers, demand for our existing and new products and services, profitability, access to credit and our ability to operate our business. Our financial performance is influenced by the overall condition of the real estate markets in the Priority Markets in which we operate. Each of these real estate markets are affected by various macroeconomic factors outside our control (which by their nature are cyclical and subject to change). These factors include inflation, interest rates, the general market outlook for economic growth, unemployment and consumer confidence. These factors are also affected by government policy and regulations that may change. In many countries globally, including our Priority Markets, high inflation and concerns over potential economic recessions continue to persist, including due to global economic, political and social conditions that can give rise to global supply chain disruptions, government stimulus packages, rising costs of commodities, and geopolitical conflicts. Inflation has risen significantly in recent years, which in turn led to an increase in interest rates in 2022 and 2023, which impacted mortgage affordability. To the extent inflation and interest rates remain elevated, these pressures may negatively impact property demand and demand for our products and services. In addition, lingering effects of global and industry-wide supply chain disruptions caused by factors such as the COVID-19 pandemic and geopolitical turmoil resulted in shortages in labor, materials and services. Such shortages contributed to rising costs of labor, materials and services and scarcity of certain products and raw materials could continue to significantly impact our customers and weaken global economies. Inflationary pressures increased our operating costs in 2022 and 2023 and may have an adverse impact on our costs, margins and profitability in the future. We cannot predict any future trends in the rate of inflation, and to the extent we are unable to recover higher costs through higher prices for our products and offerings, a significant increase in inflation could negatively impact our business, financial condition and results of operation. Our marketplaces business generates revenue from property developers from advertising activities to promote sales of residences in new property developments (which we refer to as "primary listings" to distinguish them from "secondary" sales of already existing residential properties). Given the longer lead times required and increased costs to develop and market new property developments, these primary listings may prove more volatile than secondary listings, as economic uncertainty (over a longer period) may have a greater adverse impact on the rate and extent of new property development activity and could result in fewer primary listings. In addition, most agents in our Priority Markets are effectively self-employed individuals who are largely commission remunerated and may leave the industry when market conditions deteriorate sufficiently. Accordingly, a property downturn could cause a decline in the number of agents and developers, reduce demand for our products and services or reduce our ability to increase prices in light of subdued market conditions. For example, in Vietnam, our agent customers significantly reduced their discretionary spending in the fourth quarter of 2022 and through 2023 following actions by the State Bank of Vietnam to control credit growth, including controlling loans for real estate, which suppressed consumer sentiment and the real estate market in Vietnam. This negatively impacted the number of real estate listings on our platform and in turn impacted our revenue in Vietnam, where we operate a pay-as-you-go model and effective monetization depends on our ability to sustain the number of listings that agents post to our platform. The cyclical nature of the real estate market also has an effect, where the real estate market in each country or major city tends to rise and fall in line with economic prosperity and sentiment in that country or major city (noting Priority Markets generally operate independently of one another). These macroeconomic factors, along with regulatory and political changes, also contribute to the availability of credit to purchasers, which is a main driver of housing price accretion and capability to transact. Government and regulatory policies in our Priority Markets, including policies towards housing and infrastructure development and sustaining continued economic growth, could also have a significant impact on real estate or credit markets and, in turn, our revenues. For example, governmental actions in Vietnam in 2022 significantly limited both consumers' and developers' access to credit, which has suppressed the real estate market in Vietnam and weakened consumer confidence, which in turn has reduced demand for our platform, products and services in Vietnam in 2023. For further information, see "- Our business is subject to legal and regulatory risks and changes in regulatory requirements and governmental policy that could have an adverse impact on our business and prospects." In addition, our ability to fund our liquidity requirements and operate our business depends on our cash flows from operations and, in future, potentially our ability to access capital markets and borrow on credit facilities. Our access to and the availability of financing on acceptable terms may be adversely impacted by global economic conditions, including inflation, interest rate changes and systemic banking risks. For more information, please see "Item 5. Operating and Financial Review and Prospects-B. Liquidity and Capital Resources." Changing economic conditions have also had and may continue to have an effect on foreign exchange rates, which in turn may affect our business. For further information, see "- Fluctuations in foreign currency exchange rates will affect our financial results, which we report in Singapore Dollars." We cannot predict the timing or duration of an economic slowdown or the timing or strength of a subsequent economic recovery generally or in the real estate industry. If macroeconomic conditions worsen or the current global economic conditions continue for a prolonged period of time, we are not able to predict the impact that such conditions will have on credit markets, the real estate industries in our Priority Markets and our results of operations. Changes in the structure of the real estate markets in which we operate could also adversely impact our business. For example, a reduction in the customary rate of commissions earned by real estate agents from property sales could reduce agents' capacity to pay for our products and services and could prevent us from increasing prices or even require us to reduce our subscription fees or the prices of our discretionary credits, which could have an adverse effect on our business and financial performance. This risk would be more pronounced in Vietnam where our business derives most of its revenue from agent discretionary revenue given our pay-as-you-go model in the country. Similarly, if larger agencies, rather than individual agents, become comparatively more important as a source of revenue, this could increase customer pricing power, could prevent us from increasing prices or put pressure on our existing pricing and could develop into us competing with such agencies' own websites or platforms. The occurrence of any of these factors could adversely affect our business, financial condition and results of operations.

There are inherent climate-related risks wherever business is conducted. Certain of our facilities, as well as our and third-party infrastructure on which we rely, are located in areas that have experienced, and are projected to continue to experience, various meteorological phenomena (such as drought, heatwaves, wildfire, storms, and flooding, among others) or other catastrophic events that may disrupt our or our suppliers' operations, require us to incur additional operating or capital expenditures, or otherwise adversely impact our business, financial condition, or results of operations. Climate change may increase the frequency and/or intensity of such events. Climate change may also contribute to various chronic changes in the physical environment, such as sea-level rise or changes in ambient temperature or precipitation patterns, which may also adversely impact our or our suppliers' operations. While we may take various actions to mitigate our business risks associated with climate change, this may require us to incur substantial costs and may not be successful, due to, among other things, the uncertainty associated with the longer-term projections associated with managing climate risk. For example, to the extent catastrophic events become more frequent, it may adversely impact the availability or cost of insurance. Additionally, we expect to be subject to risks associated with societal efforts to mitigate or otherwise respond to climate change, including but not limited to increased regulations, evolving stakeholder expectations, and changes in market demand. For more information, see "-Increased attention to, and evolving expectations for, ESG initiatives could increase our costs, harm our reputation, or otherwise adversely impact our business." Changing market dynamics, global and domestic policy developments, and the increasing frequency and impact of meteorological phenomena have the potential to disrupt our business, the business of our suppliers and/or customers, or otherwise adversely impact our business, financial condition, or results of operations.