Singapore’s Centurion Proposes Delisting From Hong Kong Bourse

Singapore-based rental accommodation specialist Centurion Corp says it plans to delist its shares from the Hong Kong Exchange to cut costs and reporting obligations, while maintaining its presence on the SGX.

The company led by co-chairmen Han Seng Juan and David Loh Kim Kang has applied for a voluntary withdrawal of its shares from the HKEX, according to a regulatory filing on Monday.

“Maintaining the listing of the shares on the HKEX requires additional ongoing regulatory compliance obligations and such requirements involve additional costs and administrative burden,” Centurion said, adding that it was not able to conduct secondary equity fund raising activities in Hong Kong.

The proposed delisting, which is subject to shareholder approval, is the latest move by Centurion, which develops and operates purpose-built student and workers rental housing across five markets, to streamline its recovering operations, and comes less than two months after it sold its sole Korean asset to exit an unprofitable market.

Low Volume, Sliding Price

Centurion said the delisting plan is still in a preliminary stage with no timetable established at this time, however, it does plan to provide owners of its Hong Kong shares with a circular containing details of the proposed transfer of the stock to the SGX.

Hong Kong shareholders will get a chance to vote on the proposed delisting at an extraordinary general meeting, the company said.

If the delisting is greenlit, shareholders will have the option to either continue to hold the Hong Kong shares on a private basis, or deposit their shares with the SGX for trading on the Singapore bourse.

Centurion said trading volume for its Hong Kong stock has been limited, with its market cap on the HKEX currently standing at HK$1.66 billion ($210 million), which is about 4 percent less than its S$294 million ($218 million) market cap on the Singapore bourse.

At the time the announcement was made, Centurion’s HK$1.98 stock price was down 38 percent from its 2017 HKEX IPO price of HK$3.18, and 7 percent below its 2023 peak of HK$2.13 at the start of February.

“The directors believe that the proposed delisting is in the best interests of shareholders and the company as a whole,” the disclosure read. “The directors do not expect that the implementation of the proposed delisting (will) adversely affect the business of the group, but expect that it will enable the company to effect cost savings.”

The firm also does not expect the delisting to diminish its net asset value or earnings per share.

Centurion raised HK$69.7 million in net proceeds when it established a second primary listing on the HKEX in December 2017.

Singapore Resurgence

Back home on the SGX, Centurion’s stock has risen 5.88 percent this year and analysts are forecasting a bright outlook for the developer following its stronger-than-expected first quarter earnings.

During the first three months of this year, the firm achieved a 5 percent increase in revenue compared to the same period in 2022, bringing in S$47 million via improving performance for both its student and worker strategies, according to its earnings report last month.

By geography, Centurion saw its strongest growth in Australia where revenues surged 73 percent year on year to reach S$3.2 million during the period, on strong demand for its student housing. In Malaysia, a 44 percent jump in revenue brought in S$4.9 million thanks to higher occupancy in its worker dormitories.

Singapore remains the company’s largest market with its five assets in the city-state generating S$30.6 million in revenue from January through March. This was down 0.6 percent from a year ago.

In the UK, its second largest market, Centurion suffered a 5 percent drop in revenue, which fell to S$8.1 million primarily due to a weaker British pound.

In a note on Friday, analysts at UOB Kay Hian said the company has plenty of room for growth this year as it enlarges its Malaysia portfolio with the planned roll out of 1,650 beds at its Cemerlang property in Johor by the third quarter and an additional 290 beds for a project in Johor’s Tampoi area.

Centurion is also set to develop a 1,650-bed worker dormitory in Ubi Avenue 3 in Geylang, together with SGX-listed joint venture partner Lian Beng Group. UOB Kay Hian expects the firm to redeploy the capital raised from its Korean exit into markets with higher growth potential like Malaysia.

“In the near to medium term, it appears that Centurion will continue to see incremental volume and rental growth,” the brokerage’s analysts said.

In Australia, the company’s controlling shareholder, Centurion Properties, earlier this year proposed to build a 732-unit student housing complex in Macquarie Park, Sydney, near Macquarie University. The project, still pending government approval, is estimated to cost A$132.17 million ($91.5 million at the time the project was announced).