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Company Overview: Centuria Capital Group (ASX: CNI) is engaged in investment management activities for a property fund. The company buys, manages, and sells commercial and industrial property. The company reports its performance in the following operating segments, namely (1) Property Funds Management, (2) Developments, (3) Property and Development Finance, (4) Investment Bonds Management, (5) Co-Investments and (6) Corporate. The company was listed on ASX in March 2002.
CNI Details
CNI Rides on Decent Fundamentals & Shareholder’s Return: 1HFY22 marked a successful year for CNI with attractive results and continued business growth.
Operational Highlight; Analysis by Kalkine Group
1HFY22 Results Highlights:
Key Segmental Highlights; Analysis by Kalkine Group
Key Metrics: The company reported a gross margin of 96.9% in 1HFY22, compared to the industry median of 68.5%. The net margin stood at 79.8% during the same period, compared to 1HFY21 figure of 36.8%.
Profitability Profile; Analysis by Kalkine Group
Top 10 Shareholders: The top 10 shareholders together form around 34.92% of the total shareholding. Vanguard Investments Australia Ltd. and Pentek Holdings Pty. Ltd. are holding a maximum stake in the company at 8.12% and 4.15%, respectively, as highlighted below:
Top 10 Shareholders; Analysis by Kalkine Group
Risk Analysis:
Key Risks; Analysis by Kalkine Group
Outlook:
Valuation Methodology: P/E Multiple Based Relative Valuation (Illustrative)
Source: Analysis by Kalkine Group
*% Premium/(Discount) is based on our assessment of the company’s NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.
Stock Recommendation: The company’s stock has been corrected by ~18.54% in the past six months. Currently, the stock is trading below the average of its 52-week high and low levels of $3.61 and $2.54, respectively. The stock has been valued using the P/E multiple-based illustrative relative valuation method and arrived at a target price of low double-digit upside (in % terms). The company might trade at a slight premium as compared to its peers, considering an increase in the top-line, decent liquidity position, robust cash flow, upgraded EPS view, etc. For valuation, peers such as Centuria Office REIT (ASX: COF), Vicinity Centres (ASX: VCX), Stockland Corporation Ltd (ASX: SGP), and others have been considered. Hence driven by the resilient financial position, geographical expansion, guidance upgrade for FY22, indicative upside in valuation, and current trading level, we recommend a ‘Buy’ rating on the stock at the closing market price of $2.61, down by ~2.247% as on 3 May 2022. Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.
CNI Daily Technical Chart, Data Source: REFINITIV
Note 1: The reference data in this report has been partly sourced from REFINITIV.
Note 2: Investment decision should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the Valuation has been achieved and subject to the factors discussed above.
Technical Indicators Defined: -
Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.
Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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