Centurion remains a top sector pick, driven by material exposure to Singapore’s booming construction industry via its Purpose-Built Workers’ Accommodation (PBWA) assets. With tailwinds from government megaprojects and robust rental growth, sustained earnings should be expected in our view.
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First tailwind: Strong construction spending in Singapore.
Construction activity from both the public and private sectors will remain elevated in the next 2-3 years with key multi-year projects having started recently. These include the
Marina Bay Sands expansion (worth S$10.7b),
Resorts World Sentosa expansion (worth S$6.8b),
Changi Airport Terminal 5 (worth S$11.0b), as well as
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Second tailwind: MAS’ S$5b equity injection.
In our view, Centurion should be one of the main beneficiaries of the EQDP as the company has built a strong reputation as a highly competent accommodation manager, has strong historical and forecast earnings growth, safe and reliable operations as well as exposure to a sector that is seen as being relatively insulated from geopolitical risk that has risen markedly in the past few days.
Above is an excerpt from a report by UOB Kay Hian Research. Clients of UOB Kay Hian may be the first to access the full PDF report @ https://www.utrade.com.sg/.
