Brokers' take: RHB expects Centurion's financials to improve, upgrades to 'buy'

RHB on Wednesday (Mar 9) upgraded Centurion Corporation OU8 to "buy" from "neutral" as it expects the property management company's financial performance to improve further as Covid-19 infections stabilise and subside.

The research team has also raised its target price to S$0.38 from S$0.36, representing a potential upside of 11.8 per cent from the counter's trading price of S$0.34 as at 10.41 am on Wednesday. Shares of Centurion were up 1.5 per cent or S$0.005 at the time.

RHB is projecting a 12 per cent year-on-year growth in profit after tax and minority interests (Patmi) in 2022. It noted that Centurion's business has been resilient throughout the pandemic.

The research team anticipates occupancy rates for its UK student accommodation business and dormitory segment to improve further. As at December 2021, bookings for the 2021-2022 academic year approached a 90 per cent rate.

Meanwhile, Centurion obtained a master lease from JTC to operate 4 quick-build dormitories (QBDs), as well as contracts to manage 2 migrant worker onboarding centres - which began operating in H1 2021. These new assets should boost revenue streams, RHB said.

As the dormitory landscape improves, RHB expects the recovery of migrant worker numbers in the construction, marine and processing industries, along with rental rates remaining resilient this year.