Lim & Tan Securities analyst Chan En Jie has kept his “accumulate” call on Centurion Corporation OU8 after the company’s results for the 1HFY2024 ended June stood above expectations.
Centurion’s revenue of $124 million stood at 53% of Chan’s full-year estimates while its core profit of $48.5 million stood at 62% of his full-year calculations.
In his report dated Aug 30, the analyst notes that the pipeline of new dormitory beds across Singapore and Malaysia is “healthy” with 2,570 new beds coming in 2024.
In addition, there is a strong demand for foreign workers over the short to mid term as Singapore’s construction demand is expected to remain high for 2024 to 2028.
Centurion’s upcoming expansion into the Hong Kong market is also in line with the company’s asset-light strategy, Chan adds. “The company remains on track to deliver solid results this year.”
“Centurion remains a beneficiary of positive rental reversions across all key markets in the purpose-built workers accommodation (PBWA) and purpose-built student accommodation (PBSA) segments,” he writes.
See also: Analysts see strength in Centurion Corp, keep ‘add’ or ‘buy’ at raised TPs
At its share price of 74 cents in Chan’s report, Centurion’s valuations remain “attractive” at a core FY2024 P/E of 6.7 times and a P/B of 0.66 times.
To this end, Chan has raised his core earnings for FY2024 and FY2025 by 18% and 19%. He has also raised his target price to 83 cents from 66 cents previously. His new target price is still based on a core FY2025 P/E of 7.1 times, which is the company’s historical average.
Here's what other analysts have to say about Centurion.
As at 10.50am, shares in Centurion are trading 0.5 cents lower or 0.69% down at 72 cents.
