Centurion Corp Ltd: KGI Securities (Singapore) Pte. Ltd.
April 11, 2025
Centurion Corp Ltd: Unlocking REIT Listing Potential and Growth
Centurion Corp Ltd, a leading player in the real estate and accommodation sectors, has recently been evaluated by KGI Securities (Singapore) Pte. Ltd. in a comprehensive research report. The analysis highlights Centurion’s strong performance, potential REIT listing, and robust expansion pipeline.
Company Update and Rating
Centurion Corp Ltd, a Singapore-based company, operates in the real estate and accommodation sectors. KGI Securities (Singapore) Pte. Ltd. maintains an OUTPERFORM rating for the company, with a target price of SGD $1.38, driven by resilient occupancy and positive rental revisions.
Stronger than Anticipated Revenue Growth
In 2H24, Centurion Corp Ltd reported an 18% YoY increase in revenue to SGD $129.2 million, driven by sustained high occupancy and rental rate uplifts across its key markets. The company’s net profit after tax surged 118% to SGD $382.6 million, fueled by high financial occupancy and rental rate uplifts.
Key Financials and Operating Statistics
Revenue: SGD $253.6 million, up 22% YoY
Net Profit: SGD $382.6 million, up 118% YoY
Gross Profit: SGD $101.5 million, up 27% YoY
Occupancy: Sustained high occupancy across all key markets
Strategic Expansion and Portfolio Optimization
Centurion Corp continues to evolve into a diversified, multi-segment accommodation provider. The company has strategically positioned itself across PBWA, PBSA, and its newest vertical, Build-to-Rent (BTR). This transformation reflects Centurion’s ability to respond to emerging market demands while optimizing its existing portfolio through disciplined capital allocation.
Potential REIT Listing
The company is evaluating a potential REIT structure comprising stabilized PBWA and PBSA assets in mature markets like Singapore, Malaysia, and the UK. This could unlock asset value, enhance capital recycling, and deliver stable income for shareholders via a dividend-in-specie distribution.
Robust Financial Discipline
Centurion Corp Ltd reduced its borrowings from SGD $657.4 million to SGD $623.5 million, leading to a significant decline in its net gearing ratio from 38% to 29%. The Group maintains a healthy cash position of SGD $89 million and access to SGD $150.4 million in unutilized committed credit facilities.
Financials and Key Operating Statistics
Year 2023 2024 2025F 2026F 2027F
Revenue 207,245 253,616 292,890 328,082 327,193
PATMI 175,913 382,636 263,224 248,613 293,819
EPS (cents) 20.92 45.51 31.69 29.93 35.28
EPS growth (%) 1.3% 1.2% -0.3% -0.1% 0.2%
DPS (Sing cents) 2.5 3.5 3.8 3.6 3.9
Div Yield (Y%) 6.2% 3.6% 3.4% 3.2% 3.4%
Valuations and Recommendations
The target price of SGD $1.38 is derived from a discounted cash flow (DCF) analysis with a WACC of 5.0% and terminal growth of 2.0%. The DCF valuation does not yet reflect potential upside from a successful REIT listing, which could serve as an additional catalyst for re-rating.
Risks and Challenges
Prolonged elevated interest rates
Recessionary fears
Policy shifts in key markets
Currency volatility and global trade tensions impacting labor and student mobility
Medium-term Macroeconomic Uncertainties
Despite external risks, Centurion’s diversified portfolio, strong fundamentals, and prudent capital strategy should help cushion against volatility and support long-term shareholder value.
Company Outlook
Centurion’s strong FY24 performance highlights its resilience and solidifies its long-term growth trajectory in the worker and student accommodation sectors. The Group’s financial resilience and prudent capital management provide a solid foundation for sustainable growth and strategic expansion.
Strategic Initiatives
A proposed share buyback mandate to acquire issued shares in the capital of the company not exceeding 10% of the total number of issued shares has been proposed, if approved, this could further enhance shareholder value.
Financial Discipline
The Group’s long-term bank financing model supports its income-generating and development assets, with an average debt maturity of six years helping to mitigate refinancing risk and align funding with the long-term nature of its asset base.
Structural Demand Driving Resilient Accommodation Growth
Centurion Corp is strategically positioned to capitalize on strong, structural demand for affordable, compliant accommodation across its core segments.
Geographic Revenue Breakdown
Region 2H23 2H24 Change
Singapore 74,145 90,973 22.7%
Malaysia 9,559 9,727 1.8%
Australia 8,095 8,621 6.5%
United Kingdom 16,776 19,323 15.2%
Other countries 747 559 (25.2%)
Total Revenue 109,322 129,203 18.2%
Valuation
The company maintains a strong interest coverage ratio of 4.0x and a well-spread debt profile, which supports its growth strategy and shareholder returns.
Key Operating Statistics
Total Beds: 69,929 (as of 31 Dec 2024)
New Beds Added: 2,552 new beds and 7,662 beds under development for 2025-2026
Pipeline of Total Beds in Portfolio and Revenue Generated
The company continues to adopt a cautious approach to debt, relying on long-term bank financing for its income-generating assets and development projects. Its average debt maturity profile of six years and regular principal repayments help mitigate refinancing risk and align funding with the long-term nature of its asset base.
Conclusion
Centurion Corp Ltd presents an attractive opportunity to gain exposure to a defensive, cash-generative asset class with consistent returns. The Group’s well-capitalized position and robust cash flow generation will allow it to continue investing in income-generating assets and high-growth development opportunities.
KGI’s Ratings
Rating Definition: Outperform (OP) – We take a positive view on the stock.
The stock is expected to outperform the expected total return of the KGI coverage universe in the related market over a 12-month investment horizon.
Financials
Year 2023 2024 2025F 2026F 2027F
Revenue 207,245 253,616 292,890 328,082 327,193
Net Profit Margin (%) 84.9% 150.9% 91.0% 76.7% 90.7%
KGI’s Ratings
Rating Definition: Outperform (OP) – We take a positive view on the stock. The stock is expected to outperform the expected total return of the KGI coverage universe in the related market over a 12-month investment horizon.
Neutral (N): We take a neutral view on the stock. The stock is expected to perform in line with the expected total return of the KGI coverage universe in the related market over a 12-month investment horizon.
Underperform (U): We take a negative view on the stock. The stock is expected to underperform the expected total return of the KGI coverage universe in the related market over a 12-month investment horizon
Disclaimer
This report is provided for information only and is not an offer or a solicitation to deal in securities or to enter into any legal relations, nor an advice or a recommendation with respect to such securities.