Analyst Yik Ban Chong of Phillip Securities maintained a Buy rating on Pan-United Corporation Ltd. (P52 – Research Report), with a price target of S$0.75.
Yik Ban Chong has given his Buy rating due to a combination of factors that highlight Pan-United Corporation Ltd.’s strong financial position and growth prospects. Despite a slower-than-expected project take-off affecting 2H24 revenue and PATMI, the company’s gross profit and EBITDA remained within expectations, and dividends increased significantly. The anticipated stability in the volume of ready-mix concrete (RMC) and the expectation of additional revenue from major construction projects in 2H25 further support the positive outlook.
Moreover, the company’s higher profit margins, driven by a greater mix of low-carbon products, and a substantial increase in net cash due to higher earnings and reduced borrowings, strengthen its financial health. The attractive dividend yield and increased payout ratio also enhance shareholder value. The lowered WACC and raised growth rate reflect Pan-United’s significant market share and potential barriers to entry, making the stock an appealing investment at the current valuation.