Centurion - Lim & Tan Securities 2023-09-20: Bed No Enough

• Centurion’s bed rates are "tracking" the average rates of S$420/month provided by Ministry of Manpower, indicating room to grow versus other competitors which are charging upwards of S$500-$600/month. Regulatory demand to shift workers back into dormitory housing will also benefit well-established dormitory players like Centurion.
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• Maintain BUY on Centurion (SGX:OU8) with an unchanged target price of S$0.58, pegged to 7.5x core FY23F P/E (5-year average).

Shifting demand back to dormitory housing.

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• The shift in demand back to dormitory housing, coupled with the demand-supply mismatch where upcoming new purpose-built developments will only begin operations in 2025, will likely benefit dormitory players like Centurion.
• With effect from 19th Sep 2023, Ministry of Manpower requires proof of accommodation for new foreign workers before they are allowed to enter Singapore. Approval will be granted within a week for workers staying in dormitories, significantly faster than about six weeks or more for workers housed in non-dormitory properties. Time is of the essence for employers in the booming construction/O&G sector trying to catch up on projects delayed during the pandemic.

HKEX delisting on track.

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Chan En Jie Lim & Tan Securities Research | https://www.limtan.com.sg/ 2023-09-20 SGinvestors.io

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