- Pan-United (SGX:P52)'s 1H24 revenue and PATMI were within expectations at 44%/44% of our FY24e forecast. PATMI grew 22% y-o-y to S$18.6mil from revenue growth of 7% and a drop in staff costs. Gross margins crept up 30 basis points to 21.6%. Pan United's interim dividend jumped 40% y-o-y to 0.7 cents.
- - Read this at SGinvestors.io -
- We maintain our FY24e forecast and BUY recommendation. Our Pan-United target price is raised to S$0.68 (previously S$0.55) as we lower our WACC from 20% to 15%.
The Positive
Operating leverage drive margins.
- - Read this at SGinvestors.io -
The Negative
Higher capital expenditure.
- The planned capital expenditure for a new batching plant in Tuas remains on track. This site has been acquired and is under development. Estimated capex is S$60mil for FY24/25.
- The consolidation of batching sites to a single location can raise the barrier to entry due to the high CAPEX required and limited sites in the future.
Outlook
- Read more at SGinvestors.io.
