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Hong Kong Stock Exchange

Centurion’s Hong Kong debut draws major interest from retail investors

Local retail investors were exceptionally keen in Centurion’s Hong Kong offer, prompting the company to boost the size of its retail portion to 10.8 million shares

PUBLISHED : Thursday, 14 December, 2017, 7:33am
UPDATED : Thursday, 14 December, 2017, 7:33am

Centurion Corp made a successful trading debut in Hong Kong this week, bolstered by strong interest from retail investors who’ve taken note of the company’s stunning 60 per cent surge for its Singapore-listed shares this year.

Centurion completed a listing on the Hong Kong stock exchange on Tuesday, in an effort to raise capital to further its global expansion, banking on interest from local Hongkongers and mainland investors.

The group owns and operates accommodation for migrant workers in Singapore and Malaysia, and student accommodation in Australia, the United States and the UK, amounting to around 64,000 beds across 16 cities.

In debut trade on Tuesday, Centurion closed at HK$3.23, up 1.57 per cent from its offer price of HK$3.18 per share. The share fell 4 HK cents, or 1.2 per cent, to HK$3.20 on Wednesday.

“Today we are more of a global, multinational company and we wanted to increase our branding and accessibility to a pool of investors. We found that Hong Kong has a greater depth and width in terms of investors,” said Wong Kok-hoe, chairman of Centurion, in an interview with the South China Morning Post.

Centurion’s shares listed on the Singapore Exchange have risen 60 per cent this year, outpacing a 19 per cent gain in the Straits Times Index.

Hong Kong’s wider mix of fund managers, and an investor base that spans both Hong Kong and the mainland were reasons for the second listing, Wong said.

“Investors, even those based outside of China will look at both the Shanghai exchange and the Hong Kong exchange a lot more than they look at Singapore,” Wong said.

The company hopes to eventually transfer to a single primary listing in Hong Kong, in a move similar to property fund Fortune Reit in 2010.

Around 10 per cent of shareholders in Singapore have transferred their shares to Hong Kong.

In response to strong public interest, the number of shares allocated to retail investors was increased to 10.8 million from 6 million. Institutional investors saw their allotted shares trimmed back to 25.2 million from 30 million. A total of 36 million shares were issued as part of the offer. The retail portion was oversubscribed 19 times.

The group will use the capital raised to further develop current assets, build up management and expand into other property sectors like senior housing, Wong said.

They plan to expand into the Middle East, an area which has a high foreign worker population, according to Kong Chee-min, the CEO of Centurion. He said the company would focus on Australia, the United States and the UK as key growth markets for student accommodation.

Hong Kong is not a target for either sector owing to its high land prices, lack of migrant workers and small scale of students in need of housing.

“But we are constrained by the capital we have,” Wong said. “For most of our other assets we own a majority of that investment, but we decided to go into the asset-light strategy, which is we take a 20 to 30 per cent interest and for the rest we find like-minded investors to take up the balance.”

Under Westlite, their workers’ dormitory brand and dwell, their student hostel brand, the group will invest focus on managing the businesses, freeing up capital to expand.

In a recent acquisition of six student hostels in five different US states, the group took a 30 per cent stake, leaving the remaining 70 per cent to investment and property managers.

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