- 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
- - Read this at SGinvestors.io -
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.
