Pan-United Corporation - SAC Capital 2021-11-18: Market Leader With A Green Vision

PAN-UNITED CORPORATION LTD (SGX:P52)

Pan-United Corporation - Market Leader With A Green Vision

Pan-United Corporation (SGX:P52) is a ready mixed concrete (RMC) supplier that harnesses technology in the course of innovating new concrete products and processes along the supply chain. Pan-United also supplies ready mixed concrete to Malaysia and Vietnam. Singapore sales makes up 80% of Pan-United's FY20 revenue.

BCA projected total contract value awarded for FY21 to reach S$23-28b. Year-to-Aug, S$19b of contracts has been awarded. FY2022-2025 construction demand is forecasted to be at S$25-32b. We can expect Pan-United with a dominant market share (~40%) in local RMC market to capture those projects .
Pan-United’s flagship sustainability product, PanU CarbonCureTM, is the first and only concrete product in Singapore to use CCUS technology that fully eliminate carbon emissions to the environment. Pan-United also holds exclusive distribution rights to the technology. On top of that, more than half of Pan-United’s product portfolio are low-carbon and green-certified.
Singapore government aims to green 80% of buildings by 2030 under Singapore Green Plan 2030. Greater emphasis on green building promotes greater usage of sustainable concrete products.

Our price target of S$0.50 for Pan-United is derived from DCF (WACC 10%). Pan United's share price is trading at forward P/E of 13.0x and 5.6x for FY21E and FY22E respectively, and FY21E and FY22E EV/EBITDA of 5.0x and 3.2x.
Future catalysts include
1. AiR offered as SaaS, and
2. Resumption of activities in Malaysia and Vietnam on higher vaccination rates.
Key risks are
1. Labor shortage, and
2. Liquidation of struggling contractors.
See the report attached below for complete analysis on Pan-United Corporation (SGX:P52).
See also

Lim Shu Rong SAC Capital Research | https://www.saccapital.com.sg/ 2021-11-18

SGX Stock Analyst Report BUY INITIATE BUY 0.50 SAME 0.50