Centurion

Centurion: Centurion’s share price set a new all-time high today at $0.78, probably inspired by an initiation report from a local broker, who rated the counter at Buy with a $0.92 TP. We note that the group was also recently featured in The Edge magazine, which cited the inadequate accommodation facilities for workers in Singapore. According to government data, there are 771,000 foreigners holding working permits in Singapore currently, but only 160,000 bed capacity in purpose-built dormitories to house these workers. Following the Little India riot last year, the Singapore government has announced plans to speed up the construction of a number of workers dormitories over the next two to three years to improve foreign workers’ living conditions. Backed by its sound reputation, Centurion stands in good stead to pick up more projects and further grow its S’pore dormitory portfolio. Another catalyst for Centurion could come from two accommodation projects which the group is bidding for in Qatar (20,000 beds) and Penang (25,000 beds). If Centurion could secure at least one of the two contracts, it could significantly increase its total current beds count (33,200 beds in 2013). In a bid to increase the public float and market liquidity of its shares, Centurion recently placed out 80m shares, which saw SGX listed construction firm Lian Beng emerging as a substantial shareholder with a 5.03% stake (38m shares), alongside other private investors who took up the additional 42m shares, signalling their vote of confidence in the group. Overall, the street has 4 Straight unanimous Buy calls on Centurion with a consensus TP of $0.86, and at current price the group trades at 6.6x trailing P/E and 2.1x P/B.