Pan-United Corp - Phillip Securities 2024-02-13: Tailwinds From Construction Demand, Low-Carbon Solutions

• Pan-United (SGX:P52)'s FY23 net profit was 6% higher than our expectations. Net profit rose 56.2% y-o-y, lifted by higher ASP (we estimate +5%) and volume gain (+5%). Growth accelerated in 2H. 2H23 revenue gained 15% h-o-h, and net profit was +30%.
• - Read this at SGinvestors.io -
• Maintain BUY on Pan-United with a higher DCF-derived target price of S$0.55 (previously S$0.50).

Positives

Achieved higher ASP

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Gross margin strengthened further to 20.8% (+1.9% point y-o-y).

• We think the higher gross margin can be maintained, as low-carbon concrete products could gain wider acceptance, as a means to offset the higher carbon tax.
• In addition, demand for batching services, from which PanU earns a fee, is likely to be sustained. HDB has committed to launch 20,000 to 23,000 units per year through 2025.

ROE improved to 16.5%(FY22: 11.0%)

• Read more at SGinvestors.io.

Peggy Mak Phillip Securities Research | https://www.stocksbnb.com/ 2024-02-13 SGinvestors.io

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