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Pan-United Corp (PAN SP): FY26-28F Revenue Growth Forecast, Infrastructure Tailwinds, and ESG Leadership

Posted on May 27, 2025 at 8:42 am (GMT+8)

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CGS International

May 26, 2025

Pan-United Corp Ltd: Riding the Construction Tailwinds with Volume Growth and Low-Carbon Concrete

Investment Summary

  • FY26F-28F revenue growth is expected to be supported by higher institutional & civil engineering construction demand in 2025F (c.50% of 2025F demand vs. 42% in 2024). [[1]]
  • Pan-United Corp Ltd (PANU) is well-positioned to benefit from Singapore’s ongoing infrastructure upgrades due to its strength in institutional and civil engineering projects. [[1]]
  • The report reiterates an Add rating on PANU, citing its strong positioning to capitalize on construction tailwinds. [[1]]

Higher Construction Demand Forecast

  • The Building and Construction Authority (BCA) forecasts total construction demand to range between S\$47bn-53bn in 2025F, a 6-20% year-over-year increase compared to S\$44bn in 2024. Demand is expected to remain elevated at S\$39bn-46bn per year from 2026F-29F. [[1]]
  • Institutional and civil engineering projects are anticipated to account for approximately 52% of BCA’s 2025 forecasted construction demand, up from 42% in 2024. [[1]]
  • PANU’s expertise in civil engineering and institutional projects positions it favorably to capitalize on this demand, as these projects typically require specialized concrete blends with higher margins. [[1]]-[[2]]

Beneficiary of National Infrastructure Upgrading

  • The Land Transport Authority (LTA) announced feasibility studies for two new rail lines – the Seletar and Tengah Line – as part of the Land Transport Master Plan 2040. [[2]]
  • A feasibility study for the West Coast Extension (WCE) will connect the Jurong Regional Line (JRL) to the Cross Island Line (CRL) and Circle Line (CCL). [[2]]
  • If confirmed, these initiatives could extend civil engineering construction demand visibility until early-2040F. [[2]]

Low-Carbon Concrete Utilization

  • PANU began offering low-carbon concrete in 2019, ahead of its Singaporean peers, and continues to invest in research & development to expand its range of low-carbon concrete solutions. [[2]]
  • Low-carbon solutions accounted for more than 50% of its 2024 sales volume. [[3]]
  • PANU’s proprietary carbon mineralized concrete (PanU CMC+) has been used in notable projects such as Tuas Port, LTA’s North-South Corridor, and Cross Island Line, among others. [[3]]

Revised Target Price and Recommendation

  • The target price (TP) is raised to S\$0.82, based on a higher FY26F EBITDA and an EV/EBITDA of 5.8x (its 2012-14 average during Singapore’s previous construction upcycle). [[3]]
  • The Add rating is reiterated due to PANU’s strong positioning to capture construction tailwinds, supported by an improved balance sheet. [[3]]
  • Potential re-rating catalysts include strong industry volume growth and sustained margin strength. [[3]]
  • Downside risks include counterparty credit risks and a slowdown in project offtake volumes impacting RMC sales and margins. [[3]]

Company Overview

  • Rating: ADD (no change) [[3]]
  • Consensus Ratings: Buy 3, Hold 0, Sell 0 [[3]]
  • Current Price: S\$0.705 [[3]]
  • Target Price: S\$0.823 [[3]]
  • Previous Target: S\$0.75 [[3]]
  • Up/Downside: 16.7% [[3]]
  • Market Cap: US\$382.8m / S\$492.1m [[3]]
  • Average Daily Turnover: US\$0.18m / S\$0.24m [[3]]
  • Current Shares O/S: 698.4m [[3]]
  • Free Float: 26.1% [[3]]

Key Changes in This Note

  • FY26-27F core EPS raised by 12-19% on higher sales volume estimates. [[3]]
  • This note also denotes a change of analyst coverage. [[3]]

Price Performance

  • 1M: Absolute (%) 11.0, Relative (%) 5.1 [[3]]
  • 3M: Absolute (%) 15.6, Relative (%) 12.1 [[3]]
  • 12M: Absolute (%) 58.4, Relative (%) 27.5 [[3]]

Major Shareholders

  • Ng family: 60.0% [[3]]
  • Dimensional Fund Advisors: 0.4% [[3]]
  • Lee Cheong Seng: 0.4% [[3]]

Analyst(s)

  • Natalie ONG [[3]]
  • LIM Siew Khee [[3]]

Financial Summary

Financial Summary Dec-23A Dec-24A Dec-25F Dec-26F Dec-27F
Revenue (S\$m) 774 812 862 973 1,044
Operating EBITDA (S\$m) 68.68 76.51 81.00 90.52 95.79
Net Profit (S\$m) 35.62 40.86 44.05 51.17 55.17
Core EPS (S\$) 0.051 0.060 0.063 0.073 0.079
Core EPS Growth 30.0% 17.8% 4.6% 16.2% 7.8%
FD Core P/E (x) 13.80 11.67 11.18 9.62 8.92
DPS (S\$) 0.023 0.030 0.032 0.037 0.039
Dividend Yield 3.26% 4.26% 4.54% 5.25% 5.53%
EV/EBITDA (x) 6.52 5.26 5.00 4.29 3.77
P/FCFE (x) 23.00 7.38 24.60 11.67 9.00
Net Gearing (18.1%) (33.8%) (30.3%) (32.9%) (38.1%)
P/BV (x) 2.12 1.86 1.72 1.58 1.45
ROE 16.1% 16.9% 16.0% 17.1% 16.9%
% Change In Core EPS Estimates 0.0% 12.0% 18.6%
EPS/Consensus EPS (x) 0.99 0.96 0.94

Construction Contracts and Output

  • 1Q25 construction contracts awarded surged 46% yoy. [[2]]
  • Monthly construction output increased by 9% yoy in 1Q25. [[2]]

Construction Demand Breakdown

Construction demand (in S\$ bn) 2024A 2025F (Lower) 2025F (Upper) yoy chg
Residential (Public) 7.3 8.2 9.2 20%
Residential (Private) 8.0 5.5 6.0 -29%
Commercial 5.4 3.6 5.1 -19%
Industrial 4.9 5.1 5.6 10%
Institutional & Others 11.6 15.6 17.0 40%
Civil Engineering Work 7.0 9.0 10.0 35%
Total construction demand 44.2 47.00 52.9 13%
% of institutional and civil engineering projects 42% 52% 51%

Rail Line Development

  • Feasibility studies are ongoing for the Seletar and Tengah Line. [[3]]
  • The Seletar Line could serve areas such as Woodlands, Sembawang, Sengkang West, Serangoon North, Whampoa, Kallang, and the Greater Southern Waterfront. [[3]]
  • The Tengah line could serve the west and northwest regions such as Tengah, Bukit Batok, Queensway, and Bukit Merah. [[3]]
  • A two-phase West Coast Extension (WCE) is being studied to improve rail connectivity, connecting the Jurong Regional Line (JRL) to the Cross Island Line (CRL) and Circle Line (CCL) by late-2030s and early-2040s, respectively. [[3]]
  • These initiatives align with the Land Transport Master Plan 2040, aiming to reduce peak-period journeys between homes and workplaces to below 45 minutes. [[3]]
  • The LTA expects to complete these lines in phases from 2040 onwards, potentially extending visibility for engineering construction demand. [[3]]

Ongoing Rail Projects (2023-2032F)

Ongoing rail projects Phase/stage Details Operationally ready by
Downtown Line (DTL) – 1 station (Hume) 28-Feb-25
Cross Island Line (CRL) Phase 2 15 km, 6 stations (Turf City, King Albert Park, Maju, Clementi, West Coast, and Jurong Lake) 2032F
Circle Line (CCL) Stage 6 4km, 3 stations (Keppel, Cantonment, Prince Edward 1H26F
Thomson-East Coast Line (TEL) Stage 5 2 stations Bedok South and Sungei Bedok (interchange) 2H26F
Downtown Line (DTL) Downtown Line 3 extension 2 stations Xilin and Sungei Bedok (interchange) 2H26F
Jurong Region Line (JRL) Stage 1 24km, 24 stations 2027F
Jurong Region Line (JRL) Stage 2 24km, 24 stations 2028F
Jurong Region Line (JRL) Stage 3 24km, 24 stations 2029F

Earnings Revision

FYE Dec (S\$ m) FY25F (New) FY26F (New) FY27F (New) FY25F (Old) FY26F (Old) FY27F (Old) FY25F (% change) FY26F (% change) FY27F (% change)
Revenue 862.1 973.2 1,044.3 862.1 897.1 923.2 0.0% 8.5% 13.1%
EBITDA 80.0 89.5 94.8 80.0 82.7 84.0 0.0% 8.3% 12.8%
Operating profit 56.0 64.7 69.5 56.0 57.9 58.8 0.0% 11.8% 18.3%
Core net profit 44.1 51.2 55.2 44.1 45.7 46.5 0.0% 12.0% 18.6%
Core EPS (Scts) 6.3 7.3 7.9 6.3 6.5 6.7 0.0% 12.0% 18.6%

Peers Comparison

Company Ticker Recom. Price (lcl curr) Target Price (lcl curr) Market Cap (US\$ m) CY25F P/E (x) CY26F P/E (x) 2-year EPS CAGR (%) CY25F P/BV (x) CY26F P/BV (x) CY25F Recurring ROE (%) CY25F Dividend Yield (%)
Singapore building material peers:
BRC Asia Ltd BRC SP Add 3.12 3.40 666 10.3 10.0 6.2% 1.68 1.58 16.8% 6.4%
Hong Leong Asia HLA SP Add 1.17 1.75 681 8.9 7.7 14.3% 0.81 0.76 9.3% 3.9%
Pan-United Corp Ltd PAN SP Add 0.71 0.82 383 11.2 9.6 12.2% 1.72 1.58 15.5% 4.5%
Average 10.1 9.1 10.9% 1.40 1.31 13.9% 5.0%
Indonesia cement/concrete peers:
Indocement INTP IJ Add 5,775 7,700 1,291 10.7 10.0 1.4% 0.89 0.85 8.6% 2.9%
Semen Indonesia SMGR IJ Add 2,720 3,500 1,188 22.6 19.7 13.2% 0.44 0.44 2.0% 3.0%
Average 16.7 14.8 7.3% 0.67 0.64 5.3% 2.9%
Malaysia cement/concrete peers:
Hume Cement Industries Bhd HUME MK NR 2.85 na 487 9.5 8.3 4.6% na na 30.7% na
Malayan Cement Bhd LMC MK Add 4.95 7.10 1,624 10.4 10.1 11.2% 0.97 0.91 9.4% 2.4%
Average 10.0 9.2 7.9% 0.97 0.91 20.0% 2.4%
Thailand cement/concrete peers:
Siam Cement SCC TB Reduce 172 115 6,388 26.5 26.7 25.1% 0.59 0.58 2.2% 2.9%
Siam City Cement PCL SCCC TB NR 152 na 1,394 11.1 10.4 -9.9% 1.28 1.24 12.1% 6.8%
Average 18.8 18.5 7.6% 0.93 0.91 7.1% 4.8%

ESG Analysis

  • Pan-United Corp (PanU) has demonstrated a commitment to environmental sustainability efforts and is the largest sustainable ready-mix concrete (RMC) supplier in Singapore. [[6]]
  • Since 2017, PanU has increased its portfolio of sustainable concrete offerings and ramped up the usage of low-carbon raw materials, aiming to offer only low-carbon concrete products by 2030. [[6]]

ESG Highlights

  • PanU is a leading provider of greener concrete products in Singapore, utilizing carbon capture, utilization, and sequestration (CCUS) technologies since 2018. [[6]]
  • PanU has been conferred the “Leader” certification, the highest level of sustainability certification, from the Singapore Green Building Council (SGBC). [[6]]
  • The group has set goals to offer only low-carbon concrete by 2030, carbon-neutral concrete by 2040, and become a carbon-neutral company by 2050. [[6]]

ESG Trends

  • Since 2017, PanU has increased its usage of lower-carbon inputs, such as ground granulated blast-furnace slag, superfluous concrete, and washed copper slag. [[6]]
  • In 2018, the group partnered with CarbonCure to use its technology in RMC production, integrating it into three batching plants by end-2020. [[6]]
  • In Dec 2022, PanU became the first concrete company in Asia to provide on-demand Environmental Product Declaration certificates (EPDs). [[6]]

Financial Ratios and Key Drivers

Key Ratios Dec-23A Dec-24A Dec-25F Dec-26F Dec-27F
Revenue Growth 10.1% 4.9% 6.1% 12.9% 7.3%
Operating EBITDA Growth 31.5% 11.4% 5.9% 11.7% 5.8%
Operating EBITDA Margin 8.87% 9.42% 9.40% 9.30% 9.17%
Net Cash Per Share (S\$) 0.06 0.13 0.13 0.15 0.19
BVPS (S\$) 0.33 0.38 0.41 0.45 0.49
Gross Interest Cover 13.47 15.18 18.07 23.12 27.81
Effective Tax Rate 21.3% 19.8% 19.8% 19.8% 19.8%
Net Dividend Payout Ratio 44.9% 51.3% 50.7% 50.5% 49.4%
Accounts Receivables Days 79.28 79.43 74.34 72.61 74.38
Inventory Days 12.52 12.75 14.12 13.67 14.00
Accounts Payables Days 71.74 80.61 79.45 75.42 77.23
ROIC (%) 16.3% 18.2% 20.3% 21.2% 21.9%
ROCE (%) 17.3% 19.2% 18.9% 20.2% 20.0%
Return On Average Assets 8.77% 9.22% 9.18% 9.88% 9.82%
Key Drivers Dec-23A Dec-24A Dec-25F Dec-26F Dec-27F
Concrete and Cement EBITDA margin (%) 8.4% 9.0% 9.0% 9.0% 8.9%
Trading and Shipping EBITDA margin (%) 25.4% 23.0% 25.0% 25.0% 25.0%


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