Centurion Corporation

[weijian]

The company is promoted by famous stock operators which any old forumers would know.

This company's stock price seems to be on a meteoric rise since the start of 2013, almost a 2-bagger now.
I first took notice of this company at about the same time that CityFarmer started this thread, ie. the headlines of the dorm business caught my eye. There was actually a rush of excitement in my heart, to want to study up on Centurion and possibly initiate a position, until i recall some of the painful lessons i have paid for (getting excited after reading a promising company operating in either an exciting or easy-to-understand 'bao jia' industry).

There seems to be an invisible hand that is working - load up and then cook up media coverage. Small fishes like me really need to be on high alert if we decide to swim with the sharks.

[grubb]

The company is promoted by famous stock operators which any old forumers would know.

This company's stock price seems to be on a meteoric rise since the start of 2013, almost a 2-bagger now.
I first took notice of this company at about the same time that CityFarmer started this thread, ie. the headlines of the dorm business caught my eye. There was actually a rush of excitement in my heart, to want to study up on Centurion and possibly initiate a position, until i recall some of the painful lessons i have paid for (getting excited after reading a promising company operating in either an exciting or easy-to-understand 'bao jia' industry).

There seems to be an invisible hand that is working - load up and then cook up media coverage. Small fishes like me really need to be on high alert if we decide to swim with the sharks.

i think specuvestor is referring to the ownership of the company. check out the controlling shareholders.

[kbl]

http://infopub.sgx.com/FileOpen/Centurio...leID=15024


**They’re the “David and Han Team” or “The Dream Team”, as they are popularly known in the stockbroking world, due to their enormous success in share trading and for bringing numerous Chinese companies here for listing.**


http://www.lushhomemedia.com/manage_post...-projects/

<not vested>

[sjzheng]

any comment on this counter?

[ARC]

any comment on this counter?

Fundamentally, the asset class is attractive. It generates higher roic compared to other property types. Demand in singapore is relatively stable and supply is tight. Coy has a pipeline of assets that help provide for growth over the short term. 

The roic on investment in Malaysia is higher than that in Sg - in the teens (est). The question has always been about whether it will succeed in a new market. It seems that they are making progress with the higher reported occupancy but not sure if it is through under-pricing. 

It is expanding to other adjacent products/services such as student accommodation and new geographies such as Indonesia. So there is a longer term story there.

Some forum members here have raised the issue about the owners and I don't necessarily disagree. But I would also say that sometimes one finds safety in the company of 'sharks' (which was so described in earlier posts) as they may protect you in the big bad ocean. Provided that they don't eat you of course.

Caveat Emptor.

---
http://www.i3-institute.com
http://www.i3-institute.blogspot.com/index.html
http://www.facebook.com/i.invest.institute

[greengiraffe]

http://infopub.sgx.com/FileOpen/CCL-4Q20...eID=276690

Page 16 - They bought a piece of land in the mining town of Port Hedland,Western Australia back in 2012 - still undergoing rezoning...

Classic Aussie "Democrazy" at work and already mining is in its slumps and claimed several high profile corporate failures there...

Vested
Odd Lots

[dzwm87]

Lian Beng acquiring a ~5% stake through a married deal.

http://infopub.sgx.com/FileOpen/Acquisit...eID=277809

Using the dormitories for their workers?

[CityFarmer]

OSK DMG analyst report on the company

-----------
Centurion is in a sweet spot currently given the supplydemand
imbalance in the worker’s accommodation segment. A total of 50k-60k
additional beds are expected to be delivered across Singapore’s workers
dormitories by the end of this year. This will increase the total supply of dormitory
beds to 200k-210k, which falls well short of the demand created by the 500k work
permit holders in Singapore. The shortage of supply will continue to put upward
pressure on rental rates and occupancy levels, and coupled with CENT’s rapid
expansion plans, we can expect the company to see strong growth from FY13 to
FY16. Expect further upside from new acquisitions of student accommodations in
the UK and Australia. We reiterate our BUY rating on the stock, with a DCFbased
TP of SGD0.82. (Jarick Seet/Terence Wong)

Ref: http://remisiers.org/cms_images/research...atters.pdf

[greengiraffe]

TOPLINE
It houses foreign workers comfortably

Doing its job well has paid off for Centurion, whose stock is flying high this year
BYCAI HAOXIANG
haoxiang@sph.com.sg @HaoxiangCaiBT

We care: Mr Kong (left, with Mr Bin) says Centurion ensures foreign workers are comfortable and integrated. Every year, the company sets aside $100,000-$200,000 per dorm for social and other welfare activities like free medical screening and festive celebrations. - PHOTO: YEN MENG JIIN
AS THE only listed dormitory operator in Singapore, Centurion Corp has attracted a fair bit of attention in recent months, particularly after last December's riot in Little India. Two brokerage houses, AmFraser and DMG & Partners, initiated "buy" calls in quick succession. The riot highlighted a shortage of liveable spaces for workers such as dormitories - a gap that Centurion fills, analysts noted.
Now, the company's stock is flying high at over 70 cents a share last week - more than two-and-a- half times the 27 cents it traded at a year ago. Construction group and joint-venture partner Lian Beng also bought a 5 per cent stake in the company in March.
The key draw of the stock is how it gives exposure to cashflow- generating property assets in the undersupplied segment of foreign worker dorms, where the rent per bed has been increasing 20 per cent a year and Centurion's Singapore occupancy rates are almost full.
The company is also expanding in Malaysia, venturing into Indonesia and diversifying into student accommodation in Australia and other educational hubs.
Yet there are signs of a frothy market. Tender prices for dormitory projects in Singapore are approaching levels which give developers limited room for profits.
"We will acquire more, but at the right price," CEO Kong Chee Min told The Business Times in a recent interview. "In terms of supply-and-demand dynamics, there's still a lot of growth we can capitalise on. We won't be tendering at unreasonable prices."
"Our focus will still be in workers' accommodation," Mr Kong added. "Student accommodation is something new to us, and we will take baby steps. We hope to have a balance between the two."
Need for liveable spaces
Centurion Corp was previously known as SM Summit, a maker of storage discs. In a reverse takeover deal in August 2011 by private investment group Centurion, the company acquired properties in Toh Guan East (60-year lease from 1998) and Tuas (3+3+3 lease from 2008). It began developing a new block in Toh Guan East, as well as a dorm in Mandai, where it has freehold land.
Today, Centurion has around 23,000 beds in three dorms here, with another 4,100 beds to be added at a fourth site in Woodlands under development. The increased capacity in the last two years and higher rentals charged caused Centurion's accommodation segment revenue to rise 26 per cent to $47.3 million last year, and net profit to jump 43 per cent to $19.6 million.
Contracts are signed with companies for 1-2 years at a time for their workers to stay in the dorms. Charges are around $290-300 a month per bed - not the most expensive in the market, but not too far behind. The relatively short leases "allow us to do rental adjustments if need arises", said executive director and Centurion Properties CEO Tony Bin.
"There is turnover, yes - jobs come and go. But by and large, there's a layer of tenants who stay with us for a while."
But with the government keen to reduce Singapore's reliance on foreign workers through tighter quotas and higher levies, the question may be asked whether Centurion's business model is sustainable in the long run.
Mr Kong said the market still has some time to catch up with demand. "The gap is quite wide between the supply of purpose-built accommodation here, compared to the number of foreign workers."
The 770,000 work permit holders here stay in a variety of places. Just around 160,000 workers - who work in construction, marine and manufacturing - are estimated to stay in purpose-built dorms such as those that Centurion offers. These are essentially proper housing with facilities, such as air-conditioned television rooms, gyms, canteens, barbers and mini-marts. Another 40,000 beds have been tendered out recently.
That still leaves a gap of more than half a million workers. These stay in a mix of housing: factories converted to dorms, temporary quarters by construction sites, rented HDB flats, shipping "container blocks", shophouses, and landed homes. Rent at purpose-built dorms has increased drastically as a result of the shortage, from $95 a month in 2005 to almost $300 today.
Those who stay in temporary quarters or factories may have to get by without proper kitchens or enough toilets. This was a cause of much worker unhappiness. When 171 Chinese bus drivers in SMRT went on strike in end-2012, it was not just because of low wages, but because of poor living conditions such as bed bugs. The lack of recreational spaces for workers and the need for better amenities in dorms was also discussed after last December's Little India riot.
Thus there will be opportunity for Centurion, Mr Kong said. "There will be a push for workers to be housed in purpose-built dormitories."
Mr Bin added that even as the government reduces its reliance on foreign workers, Singapore is still dependent on manufacturing as a driver of the economy. The government is also pursuing numerous infrastructure projects over the next 20 years that will require foreign labour. They include the expansion of Changi Airport, the redevelopment of Paya Lebar Air Base, a waterfront city in Tanjong Pagar and the relocation of port facilities to Tuas.
"These will take years to complete. So we believe we are in good stead, both in the industrial sector as well as in infrastructure," he said.
Management edge
The demand for worker dorms might hold up as supply catches up, but Centurion is aiming to stand out from other dormitory operators through its expertise in ensuring workers are comfortable and integrated, Mr Kong said.
Every year, Centurion sets aside $100,000 to $200,000 per dorm for social and other welfare activities. They include free medical screening for workers, festive celebrations, movie screenings, subsidising excursions to Sentosa's Underwater World and the recent Singapore Airshow, as well as another recent activity: a first aid class.
As a result of Centurion's efforts, Mr Bin is hoping that the government will move away from looking at just price as a criterion to allocate sites to developers of worker dorms. The wish comes even as Centurion finds itself being outbid by brasher players.
"They should look at professional management and the totality of services. People are tendering high. It's becoming a bit speculative. We'll bid at a price that we feel is comfortable - that's why we weren't the highest bidder in the past few tenders," he said.
Looking ahead, Centurion has 12,000 beds under development in Johor, where it has around 14,000 beds. It has bought a piece of land in Jakarta for development. Its 456-bed RMIT Village student dorm acquisition in Melbourne is expected to start contributing to earnings soon.
As for its sunset optical disc business, which contributes around 30 per cent of revenue, disposal is "one of the possibilities", Mr Kong said.
Centurion thus looks set to keep growing in the next few years. Key risks, brokers noted, come from an economic slowdown, regulatory hurdles and aggressive bidding by competitors. Yet they remain positive, with target prices of well above 80 cents a share.
Remember SMRT, whose bus drivers went on strike over wages and poor living conditions? Since the second half of last year, more than 300 SMRT bus drivers have been housed in Centurion's Mandai dorm. "No complaints so far," Mr Kong said.

[greengiraffe]

http://www.businesstimes.com.sg/premium/...m-20140717

PUBLISHED JULY 17, 2014
Centurion to buy UK student dorm assets for £77m
BYCAI HAOXIANG
haoxiang@sph.com.sg @HaoxiangCaiBT

DORMITORY operator Centurion Corporation is spreading its geographic wings to the United Kingdom, unveiling yesterday a proposal to buy four accommodation properties in Manchester and Liverpool for £77 million (S$164.5 million), its biggest acquisition so far.
The three student accommodation assets in Manchester and one in Liverpool have 1,906 beds in total.
Based on a pro forma illustration, the move is expected to add about $10 million to the company's earnings, which means a net yield of about 6 per cent.
All assets are fully operational and have a "strong track record of achieving high occupancy rates" over the past three years, Centurion said. There are also opportunities to redevelop the dorms and add bed capacity.