Centurion Corp (CENT SP): Growth on Track – Maybank Research Analysis 2025

Maybank Research Pte Ltd

May 16, 2025

Centurion Corp (CENT SP): Growth on Track – Maintain BUY

Investment Overview

Centurion Corp’s 1Q25 revenue increased by 13% year-over-year to SGD69 million, representing approximately 25.6% of Maybank Investment Bank Group (MIBG) and 24.9% of consensus full-year forecasts. This performance was primarily driven by healthy financial occupancies and positive rental revisions in both its Purpose-Built Worker Accommodation (PBWA) and Purpose-Built Student Accommodation (PBSA) portfolios. Given favorable demand-supply dynamics, we maintain our FY25-27E EPS estimates and Target Price (TP) of SGD1.45, based on 1x FY25E P/B. Potential catalysts include the spin-off of its accommodation assets into a REIT and the consideration of distributing a dividend in specie to shareholders. We maintain a BUY recommendation.

Key Highlights

• 1Q25 Revenue: Rose 13% YoY to SGD69m. [[1]]
• Occupancy: Strong occupancies in PBWA and PBSA portfolios. [[1]]
• Recommendation: Maintain BUY with TP of SGD1.45. [[1]]
• Catalysts: Potential REIT spin-off and dividend in specie. [[1]]

PBWA – Singapore Remains the Key Driver

In 1Q25, revenue from PBWA grew 15% year-over-year to SGD53.4 million, driven by steady occupancies and better-than-expected rental revisions for Singapore assets. In Singapore, PBWA topline increased 17% to SGD48.7 million as average occupancy remained strong at 99%, excluding Westlite Ubi, which became operational in December 2024. Including Westlite Ubi, the group’s average occupancy for Singapore stood at 98%. In Malaysia, PBWA revenue dipped by 1% to SGD4.8 million, with average occupancy (excluding beds newly added from AEIs) falling 14 percentage points year-over-year to 82% due to short-term headwinds from the foreign worker cap. This was partly offset by stronger rental rates and the Malaysian Ringgit (MYR). [[1]]-[[2]]

PBSA Occupancy Affected by Ongoing AEIs

PBSA revenue increased by 2% year-over-year to SGD15 million in 1Q25. In the UK, PBSA revenue rose 6% to SGD11.1 million, supported by healthy rental rates despite a slight decrease in occupancy to 97% (-2ppt YoY). In Australia, revenue declined by 7% to SGD3.6 million, primarily due to the weaker Australian Dollar (AUD). In local currency terms, rental revenue fell by 3% amid lower bed capacity due to an ongoing AEI in Melbourne. Average occupancy declined to 86% in 1Q25 (-4ppt YoY). CENT observed a delay in student arrivals for AY25 due to the cap on new international students; however, occupancy has since rebounded to 93% by March 2025 after the commencement of FY25 Semester 1. [[2]]-[[3]]

Portfolio Growth and Expansion

The Built-to-Rent (BTR) asset, consisting of approximately 400 apartments at Centurion-Cityhome Gaolin, is now operational with an average occupancy of 48% and is expected to ramp up progressively. Management anticipates minimal impact on business operations despite ongoing tariff uncertainties and will continue to monitor developments closely. CENT has outlined a clear pipeline of capacity expansion in Singapore, Malaysia, and Australia for 2025-26, aiming to maintain a strategic balance between occupancy levels and rental rate growth. [[3]]

Share Performance and Key Statistics

• Current Price: SGD 1.26 [[1]]
• 12-Month Price Target: SGD 1.45 (+18%) [[1]]
• 52-Week High/Low (SGD): 1.28/0.53 [[4]]
• 3-Month Average Turnover (USDm): 1.5 [[4]]
• Free Float (%): 50.6% [[4]]
• Issued Shares (m): 841 [[4]]
• Market Capitalisation: SGD1.1B / USD816M [[4]]

Major Shareholders

• Centurion Global Ltd. (British Virgin Islands) [[4]]
• LOH KIM KANG [[4]]
• TEO PENG KWANG [[4]]

Financial Performance and Ratios

The following table summarizes the key financial metrics and forecasts for Centurion Corp:

Source: FactSet, Maybank IBG Research [[4]]

Value Proposition

• Centurion manages a portfolio of 32 operational accommodation assets with 69,929 beds as of FY24. [[6]]
• Worker accommodation assets are managed under the ‘Westlite Accommodation’ brand in Singapore and Malaysia. [[6]]
• Student accommodation assets are managed under the ‘dwell’ brand in the UK, US, and Australia. [[6]]
• Management strategically reviews assets for capital recycling and portfolio expansion. [[6]]

Price Drivers

• 18 Nov 2020: Secured a master lease from Selangor State Development Corporation (PKNS) for a PBWA with >5,000 beds in Petaling Jaya. [[6]]
• 13 Sep 2022: Plans to increase PBWA capacity to meet the growing needs of MNCs, SMEs, and human resource agents in Malaysia. [[6]]
• 23 Oct 2023: Partnered with KEZAD Communities to explore accommodation for employees and students in the Middle East. [[6]]
• 9 Sep 2024: Established two JVs for BTR projects in Xiamen, retrofitting buildings for long-term rental accommodation. [[6]]
• 7 Jan 2005: Exploring a potential spin-off of accommodation assets into a REIT. [[6]]

Financial Metrics

• Singapore occupancy rates reached 99% in FY24 with positive rental rate revisions. [[6]]
• Malaysia occupancy decreased to 91% due to AEI at Westlite Senai II. [[6]]
• Expects bed capacity to expand by approximately 4,466 beds (+6.4% YoY) in FY25, including the new BTR venture in China. [[6]]
• The group is expected to continue raising its dividend payout, with a total DPS of 3.5 cents in FY24 (+40% YoY). [[6]]

Swing Factors

• Upside: Better-than-expected financial occupancy and rental rate reversion, potential capital recycling exercises, and acceleration of portfolio expansion. [[6]]
• Downside: Oversupply of beds, lower-than-expected margins from intense competition, and a deterioration in the macroeconomic environment. [[6]]

ESG Risk Analysis

Centurion specializes in purpose-built accommodation for workers and students, focusing on sustainability and integrating ESG principles across its operations in Singapore, Malaysia, the UK, and the US. The company is working to reduce its environmental footprint, aligning its reporting with the TCFD framework and improving energy efficiency. [[7]]

Material Environmental Issues

• Pursuing green building certifications across its portfolio. [[7]]
• Reduced energy consumption by 8% in FY24 through LED lighting and HVAC systems. [[7]]
• Installed solar panels, sourcing 10% of total energy from renewable sources. [[7]]
• Implemented water-saving measures, reducing water consumption per bed by 12%. [[7]]
• Exploring rainwater harvesting at larger dormitory sites. [[7]]
• Implemented recycling programs and food composting. [[7]]
• Using native plants and exploring green roofs to enhance biodiversity. [[7]]

Key Governance Metrics and Issues

• The Board comprises 11 directors, with 7 independent non-executive directors (64%). [[7]]
• Conducts risk assessments bi-annually and implemented over 20 risk mitigation strategies in FY24. [[7]]
• The Sustainability Steering Committee (SSC) is chaired by the COO and includes key members from various departments. [[7]]
• The SSC met quarterly in FY24, with 90% attendance, achieving 80% of its 15 ESG-related targets. [[7]]
• Reported zero incidents of corruption or ethical breaches in the past five years. [[7]]
• Holds semi-annual stakeholder engagement sessions and increased its ESG disclosure score by 15% year-on-year. [[7]]

Material Social Issues

• Increased training hours per employee by 20% year-on-year, averaging 20 hours of training in FY24. [[7]]
• The workforce is 36% female, with women holding 32% of leadership positions. [[7]]
• Maintained a low workplace injury rate, with an incident rate of less than 1% across all operations. [[7]]

Detailed Financial Analysis

The following table provides a detailed financial analysis of Centurion Corp:

Source: Company; Maybank IBG Research [[8]]

Key Ratios and Growth Analysis

The following table summarizes the key ratios and growth analysis for Centurion Corp:

Source: Company; Maybank IBG Research [[9]]