Centurion

Centurion: 3Q14 revenue rose 46% to $20.9m, and net profit surged 49% to $7.9m, driven by the increase in bed capacity at Toh Guan, increased occupancy rate of +90% in Msia as well as maiden revenue from RMIT Village, and two weeks of income from its UK student accomodation assets. Gross margin improved to 69% from 58% due ot higher rental rates from both its Singapore and MSia dormitories. The results show that recent oversupply fears have been overhyped. DMG notes that while 100k new beds will be streaming into the market in the next two years, channel checks and market research show that this will be offset by a total of 74k short term dormitory beds would be deemed as expired or unusable in the next three years. DMB maintains its Buy rating with TP $0.89, noting that Centurion's expansion plans in Spore and Msia are on track.