Pan United Corporation - CGS-CIMB Research 2022-03-29: A Concrete Opportunity

Pan United Corporation - A Concrete Opportunity

PAN-UNITED CORPORATION LTD (SGX:P52)

As the largest ready-mix concrete (RMC) supplier in Singapore with a ~40% market share as at end-FY21, Pan United Corporation (SGX:P52) is well positioned to ride on the construction upcycle, in our view.
BCA also expects RMC demand to reach its highest level since 2017 (+7-20% y-o-y) in 2022F.
Pan United is a leading provider of high-grade green concrete, namely its proprietary CarbonCure, designed to reduce carbon emissions. Pan United has leveraged its R&D capabilities to develop more than 300 specialised concrete products since 2012.
We expect increased demand for higher grade concrete in Singapore driven by
1. larger and more complex projects, and
2. greener buildings. PanU has also self-developed an in-house digital logistics platform Artificial Intelligence for RMC (AiR), which helped yield cost savings by streamlining operations and cutting manpower wastage.
Given Pan United’s strong cash-generating capabilities and net cash position, we believe that a 5.4% dividend yield is sustainable (FY22-24F dividend of S$0.021-S$0.023). Our target price of S$0.56 for Pan United is pegged to 6.6x FY23F EV/EBITDA, based on a ~10% discount to peers.

Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @ https://www.itradecimb.com.sg/.

Kenneth TAN CGS-CIMB Research | ONG Khang Chuen CFA CGS-CIMB Research | https://www.cgs-cimb.com 2022-03-29

Price targets by other brokers at Pan United Target Prices.
Listing of research reports at Pan United Analyst Reports.