Centurion Corporation

[specuvestor]

My simple thought is what is the impact of RTS when they can get accommodation in JB for fraction of cost. As usual it is a balance and business decision if convenience and proximity overcome the cut in costs? Current Dorms are mainly in secluded areas for that reason as well.

[Behappyalways]

Centurion is one of the largest dorm operators in Malaysia


And how many hours will it take to send all those workers living in JB to come to Singapore....

https://www.google.com/amp/s/www.nst.com...-direction

[weijian]

Can the company achieve the KPI???

https://investideas.net/forum/viewtopic....9&start=60

Hi Behappyalways,

I believe no listed company mgt is naive enough to publicly announce some short term (1-3year) KPI without high probability of achieving it. And as human nature dictates, they will probably exceed it more often as well. In other words, hitting (or even exceeding) publicly announced short term KPIs is the baseline scenario as "underpromise and overdeliver" is the norm. Of course, there are exceptions and when it does happen, pretty sure Mgt has plenty of reason/s to explain it why they missed their KPIs, which are normally "beyond their control".

But having higher AUM and higher profitability are 2 different things. It depends on the manner on how higher AUM is achieved. An example below:

Scenario A (AUM of 2bil)
Cap rate=7% and 4% net costs --> profit=(7-4%)*2bil = 3%*2bil = 60mil profit

Scenario B (AUM of 4bil)
Cap rate=7% and 4% net costs --> profit=(7-4%)*4bil = 3%*4bil = 120mil profit

Scenario C (AUM of 4bil, but only 1bil is owned and 3bil is managed at 1% AUM fee)
1bil: Cap rate=7% and 4% net costs --> profit=(7-4%)*1bil = 3%*1bil = 30mil profit
3bil: 1% AUM fee for 3bil --> 1%*3bil = 30mil profit
Total profit for 4bil AUM = 30 + 30mil = 60mil profit

[weijian]

My simple thought is what is the impact of RTS when they can get accommodation in JB for fraction of cost. As usual it is a balance and business decision if convenience and proximity overcome the cut in costs? Current Dorms are mainly in secluded areas for that reason as well.

Hi specuvestor,

Any foreigner is able enter Msia, after been issued a social visit pass granting a 30day stay - this applies to Sporeans or foreigners holding onto work permits in Spore. A lot of foreigners who hold onto Sporean work permits do enter Msia for similar purpose as Sporeans using this same visa. So it is probably not about cost or convenience but whether is it legal or not that someone is able to stay full time without the appropriate visas in Msia. Foreign workers on work permits will probably not qualify for MM2H scheme.

Of course moving on, it is possible that things could change. After all, Forest City will be designated as the SEZ thanks to the latter's minority owner. Certain provisions might be created to facilitate what you envisioned but it wouldn't be dependent on the RTS but on politics. If one has followed Msian politics closely, it is not exactly a PAP-sort of dominance that allows anything slightly controversial to be even mentioned in the public domain, more so been implemented.

[specuvestor]

Hi Weijian

Yes indeed if Dr M is around I probably won’t consider this possibility but in next 4 years everything possible is “Boleh”

But without RTS the inconvenience and uncertainty of jams will overwhelm any cost savings. 东风 has come

[CY09]

https://links.sgx.com/FileOpen/CCL-Proje...eID=829850

A REIT offering of dorms are now being considered. In an era of low interest rates, it might be good to milk the public again

[Behappyalways]

One way to achieve KPI...

Since the company is trying to be asset light, the company should reconsider doing a reit or a student accommodation reit while keeping the workers dormitory segment

Centurion Corp puts REIT IPO plan on hold
https://theedgemalaysia.com/article/cent...-plan-hold


CDLHT to acquire first PBSA asset in the UK for GBP37.3 mil
https://www.theedgesingapore.com/news/re...gbp373-mil

Can the company achieve the KPI???

https://investideas.net/forum/viewtopic....9&start=60

[Yoyo]

I do not see the planning Reit as beneficial to OPMI.  Given that most reits are doing less than 0.80, it is less probable that such action will propel Centurion existing price to book of 0.90.   A case of Meeting KPI on AUM management interest not aligned to OPMI interest.
I have taken this opportunity to exit my tiny position.

[Behappyalways]

Is the company trying to take advantage to offload assets? My answer is No. They are trying to grow faster with the REIT listing.

Under their current business model, it is hard for them to grow fast for they would need to rely heavily on debts to do so. Risk of becoming another Hyflux or Oxley if they do that. Look at their new Ubi dormitory. The land cost is already $40m and it is only for 1650 beds. Add in construction costs etc etc, you need a lot of capital investment to grow under this current business model.

https://www.businesstimes.com.sg/compani...-dormitory

Watch the video by the CIO.

By doing a Reit, the company will be able to grow fast by offloading assets to the REIT. The company will benefit by earning a fee based income. They will be able to be more aggressive in bidding for projects. For example the 7000 beds in Nusajaya, Iskandar, Johor.

Watch the d&d video...executive director wants the company to manage $4b in FY2025....... currently as of 3Q2024, the company managed $2.1b.

What happens if the REIT is successful....

My guess is the company will revalued upwards its assets to offload to the REIT......hence Nta will go up, shareholders will get REIT shares plus probably a once off special dividend. The special dividend will not be a large one since the company will still hold assets.

I will probably sell off the REIT and hold on to the Centurion. The company will be something like Apac Realty....earning a fee based income although they will still own some assets. A larger proportion of its earnings will also be distributed as dividends to the shareholders compared to current model.

By the way the share price has been stagnant for the past few weeks due to a big player shorting (yes not selling but shorting) the company. So buyers beware....

Centurion.....you can watch at 11:00, 17:00 and 22:40
https://www.mingtiandi.com/video/centuri...ng-sector/

Can the company achieve the KPI???

https://investideas.net/forum/viewtopic....9&start=60

[owq]

If the company is able to sell the assets at good price, I see it as a plus as it will reduce the tax paid on the SG assets for REIT owners. Centurion can also grow faster. The question is will it be able to sell at a good price? I don't think there's currently any REIT with comparable assets so we can only guess at the price.

The other question is, they put the previous plan on hold because it might have been considered a chain listing by SGX. I wonder if there are any changes which made it feasible now?