Centurion - RHB Invest 2023-12-08: Asset-Light Strategy Taking Shape; Maintain BUY

• We reiterate our positive stance on Centurion Corp (SGX:OU8) and see growth going forward driven by better capacity, occupancy, and rental rates. Its recent sale of two assets in Malaysia could see dividend upside if management has no further use of proceeds for reinvestment.
• - Read this at SGinvestors.io -

Sells two Malaysia assets to KWAP.

• Centurion announced this week that it has entered into a sale and leaseback arrangement with Malaysia’s public sector pension fund, Retirement Fund Inc (KWAP) for two of its accommodation assets in Penang and Johor for MYR27m.
  • The two assets are Westlite Bukit Minyak (3,321 beds) and Westlite Tampoi (5,790 beds) which Centurion will leaseback for 15 years.
  • - Read this at SGinvestors.io -
• The sale of the two assets are in line with its strategy to rationalise its property portfolio, recycle and redeploy capital, as well as to be asset light. The transaction works out to a rental yield of 6.5-7% for KWAP, based on the agreed rental rates which Centurion is expected to pay for the operation of the two assets going forward.

Earnings largely unchanged.

• Read more at SGinvestors.io.

Alfie Yeo RHB Securities Research | https://www.rhbgroup.com/ 2023-12-08 SGinvestors.io

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