- Initiate coverage on Centurion (SGX:OU8) with ACCUMULATE and target price of S$0.90, based on DCF valuation (EV/EBITDA 8.8, WACC 7.0%).
- - Read this at SGinvestors.io -
- Occupancy rates of students’ accommodation in UK increased from 70% in 2020 to 93% in 2023. We expect occupancy rates to remain above 95% for FY24 and FY25 room rates to rise by 5% y-o-y for FY24.
- We expect adjusted net profits to grow by 24.9% y-o-y from 2023 to 2024. Declining interest rate environment is also positive for Centurion. A 50bps decline in interest rates can raise earnings by ~3.2%.
Company Background
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- Centurion's total bed capacity is projected to increase by ~2,393 beds in FY 2024, marking a 4% y-o-y expansion.
Investment Merits
Shortage of beds to meet strong demand from construction contracts awarded in Singapore expected to persist.
- Read more at SGinvestors.io.
