Centuria Capital Group

Section 1: Company Overview and Fundamentals Insights

1.1 Company Overview

Centuria Capital Group (ASX: CNI) is engaged in investment management activities for a property fund. The company buys, manages, and sells the commercial and industrial property. The company was listed on ASX in March 2002.

1.2 The Key Positives, Negatives, Investment Highlights, and Risks

1.3 Top 10 Shareholders: The top 10 shareholders together form ~34.80% of the total shareholding. Vanguard Investments Australia Ltd. and Pentek Holdings Pty. Ltd. are holding a maximum stake in the company at ~8.09% and ~4.13%, respectively.

1.4 Key Metrics: CNI reported a gross margin of 92.5% in FY22, compared to the year-ago figure of 76.9%. The company's asset turnover ratio in FY22 stood at 0.11x, compared to 0.06x of the Industry Median. The below picture depicts the trend of EBITDA margin and operating margin since FY18.

Section 2: Financial Highlights, Real Estate Platform Diversification and Key Strategies

2.1 Results Highlights of FY22: The company witnessed a shift from development profit to development management fee contributions in FY22. During the period, the company reported growth in Assets Under Management (AUM) to AUD 20.6bn, up from AUD 17.4bn reported in FY21, primarily driven by the growth in real estate AUM and gross acquisitions. The company has a CAGR of 40% in its AUM from 30 June 2017 to 30 June 2022.

2.2 Real Estate Funds Management: During FY22, the company reported gross real estate activity of AUD 3.1bn, which consisted of AUD 2.6bn of real estate acquisitions and AUD 0.5bn of real estate lending. CNI is on track to become one of the largest fund managers in New Zealand & Australia. It witnessed continuous growth in its development pipeline, which came in at AUD 2.1bn.

The Below Picture Depicts CNI’s Key Growth Strategies:

Section 3: Key Risks and Outlook:

Section 4: Stock Recommendation Summary

4.1 Price Performance and Technical Summary

4.2 Fundamental Valuation

Valuation Methodology: P/E Multiple Based Relative Valuation (Illustrative)

Markets are trading in a highly volatile zone currently due to certain macro-economic and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing. 

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is August 16, 2022. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

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