Citing the company's FY2024 numbers, Tee sees a long-term growth trajectory backed by continued expansion into the build-to-rent (BTR) segment and also disciplined financial management.
Tee notes that Centurion has shown prudence in managing its debt. In FY2024, it reduced its borrowings from $657.4 million to $623.5 million, thereby lowering its net gearing ratio from 38% to 29%.
It ended FY2024 with a healthy cash position of $89 million and access to $150.4 million in unutilised committed credit facilities, of which $133.9 million remain available beyond the next 12 months.
"Centurion’s long-term bank financing model supports its income-generating and development assets, with an average debt maturity of six years helping to mitigate refinancing risk.
"With a strong interest coverage ratio of 4.0x and a well-spread debt profile, Centurion is well-positioned to continue its investment and growth strategy.
Tee also points out that a proposed share buyback mandate of up to 10% of the total share base further underscores management’s confidence in the group’s intrinsic value and ability to deliver earnings accretive returns.
She agrees that heightened global trade tensions and potential tariff escalations may weigh on Singapore’s growth outlook in 2025 but Centurion’s diversified portfolio, strong fundamentals, and prudent capital strategy should help cushion against volatility and support long-term shareholder value.
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Her higher target price is derived from a discounted cash flow analysis, using a terminal growth rate of 2.0% and a WACC of 5.0%.
The potential upside from a successful REIT listing has not been taken into account, which if so, could serve as an additional catalyst for re-rating.
Centurion Corp shares traded at $1.13 as at 4.16 pm, unchanged for the day.
