UOB Kay Hian
Date of Report: Thursday, 11 September 2025
Pan-United Corporation: Market Leadership, Digitalisation, and Capacity Expansion Powering Sustainable Returns
Executive Summary: Solid Growth Underpinned by Integration and Innovation
Pan-United Corporation (PAN SP), Singapore’s leading ready-mix concrete (RMC) supplier, is leveraging its scale, upstream integration, and digital innovation to drive robust margin expansion and deliver sustainable returns. With a dominant market share, strong project pipeline, and strategic investments in capacity and technology, Pan-United is poised to capitalize on Singapore’s infrastructure boom and the accelerating demand for sustainable construction solutions.
Company Overview: Pan-United at the Forefront of Concrete Solutions
Pan-United Corporation is an Asian multinational specializing in high-performance, sustainable concrete products and related building materials. With approximately a 40% market share in Singapore’s RMC sector, the company is widely recognized as the partner of choice for both public and private sector developers.
Key Investment Highlights
- Margin Resilience and Growth: 1H25 revenue rose 4.3% year-on-year to S\$401.1m, driven by higher RMC volumes. Net profit climbed 11% to S\$20.6m despite forex losses and increased depreciation. Gross margins expanded by 2.8 percentage points to 24.4%, thanks to upstream integration and operational efficiencies.
- Digital and Operational Excellence: The AiR Digital logistics platform has been pivotal, optimizing fleet productivity and reducing idle time, thus sustaining margins even amidst rising manpower and rental costs.
- Strong Project Pipeline: Pan-United secured S\$430m worth of ready-mix supply contracts for Changi Airport Terminal 5, spanning five years and enhancing earnings visibility. The company is involved in a variety of projects, including public housing, healthcare, mixed-use developments, and MRT expansions.
- Capacity Expansion: Approximately S\$60m in capex is planned for 2025 for a new state-of-the-art batching plant at Jurong Port Integrated Construction Park, operational by late 2025/early 2026. This will further boost supply reliability, cost efficiency, and market entry barriers.
- Robust Sector Outlook: Singapore’s construction sector is forecast to award S\$47b–53b in contracts in 2025, up from S\$44.2b in 2024. RMC demand is projected at 13.0m–14.5m m³, with public sector infrastructure leading growth.
- Balance Sheet Strength: Net cash position of S\$69.8m as of 1H25 supports expansion and dividend growth. Interim dividend for 1H25 was raised by 43% to 1.0 S cent/share.
Financial Performance and Forecasts
| Year to 31 Dec (S\$m) |
2023 |
2024 |
2025F |
2026F |
2027F |
| Net turnover |
774 |
812 |
872 |
955 |
1,038 |
| EBITDA |
66 |
73 |
80 |
90 |
97 |
| Operating profit |
43 |
49 |
56 |
65 |
73 |
| Net profit (rep./act.) |
36 |
41 |
48 |
55 |
61 |
| EPS (S cents) |
5.1 |
5.9 |
6.8 |
7.8 |
8.8 |
| PE (x) |
23.1 |
20.2 |
17.2 |
15.0 |
13.4 |
| P/B (x) |
3.5 |
3.1 |
2.9 |
2.6 |
2.4 |
| EV/EBITDA (x) |
11.4 |
10.2 |
9.3 |
8.3 |
7.7 |
| Dividend yield (%) |
1.9 |
2.5 |
3.2 |
3.8 |
4.4 |
| Net margin (%) |
4.6 |
5.0 |
5.5 |
5.7 |
5.9 |
| Net debt/(cash) to equity (%) |
(18.6) |
(34.5) |
(29.0) |
(33.2) |
(40.8) |
| ROE (%) |
16.1 |
16.4 |
17.3 |
18.3 |
18.9 |
Share Price and Market Performance
- Current Share Price: S\$1.18
- Target Price: S\$1.33 (25% increase from previous S\$1.06)
- Potential Upside: +12.7%
- 52-week High/Low: S\$1.24 / S\$0.505
- Market Cap: S\$823.7m (US\$641.9m)
- 3-month Avg Daily Turnover: US\$0.7m
- FY25 NAV/Share: S\$0.41
- FY25 Net Cash/Share: S\$0.12
- Price Performance (as of report):
- 1 month: +10.3%
- 3 months: +51.3%
- 6 months: +88.8%
- 1 year: +131.4%
- YTD: +112.6%
Industry and Market Outlook
- Singapore’s construction sector is forecast to award S\$47b–53b in contracts for 2025 (up from S\$44.2b in 2024).
- RMC demand projected at 13.0m–14.5m m³, stable to moderately higher (3–8% YoY growth).
- Public sector infrastructure now accounts for about 60% of total demand, led by large projects like Changi T5, MRT lines, healthcare campuses, and an accelerated housing programme.
Balance Sheet, Cash Flow, and Dividend Policy
- Net Cash Position: S\$69.8m (1H25)
- 1H25 Interim Dividend: 1.0 S cent/share (+43% YoY)
- Dividend Yield (2025F): 3.2%
- Strong cash generation and low gearing provide ample capacity for both expansion and shareholder returns.
Detailed Financials: Profit & Loss, Balance Sheet, and Cash Flow
| Metric |
2024 |
2025F |
2026F |
2027F |
| Net turnover (S\$m) |
812.3 |
871.9 |
955.2 |
1,038.4 |
| EBITDA (S\$m) |
72.9 |
80.2 |
89.7 |
97.5 |
| EBIT (S\$m) |
48.7 |
55.7 |
64.5 |
72.6 |
| Pre-tax profit (S\$m) |
51.3 |
59.4 |
68.1 |
76.2 |
| Net profit (S\$m) |
40.9 |
47.8 |
54.8 |
61.4 |
| Operating cash flow (S\$m) |
88.0 |
55.5 |
81.7 |
92.6 |
| Capex (growth, S\$m) |
18.6 |
37.6 |
30.7 |
22.7 |
| Dividend payments (S\$m) |
17.9 |
26.0 |
31.2 |
35.7 |
| Ending cash & cash eq. (S\$m) |
107.0 |
98.9 |
118.7 |
152.9 |
Key Metrics and Ratios
- EBITDA Margin (2025F): 9.2%
- Pre-tax Margin (2025F): 6.8%
- Net Margin (2025F): 5.5%
- ROA (2025F): 9.5%
- ROE (2025F): 17.3%
- Debt to Equity (2025F): 5.4%
- Net Debt/(Cash) to Equity (2025F): (29.0)%
- Interest Cover (2025F): 28.7x
Peer Comparison
| Company |
Ticker |
Price (Local) |
Market Cap (US\$m) |
PE 2025F (x) |
PE 2026F (x) |
EV/EBITDA 2025F (x) |
EV/EBITDA 2026F (x) |
Yield 2025F (%) |
ROE 2025F (%) |
Net Gearing (%) |
| Engro |
EGCL SP |
0.90 |
83 |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
(14.6) |
| International Cement |
ICG SP |
0.05 |
215 |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
1.5 |
| Hong Leong Asia |
HLA SP |
2.40 |
1,399 |
15.3 |
13.6 |
7.3 |
6.7 |
1.8 |
11.3 |
(29.0) |
| Ytl Corp |
YTL MK |
2.61 |
7,077 |
15.4 |
16.3 |
8.9 |
7.2 |
1.9 |
11.0 |
130.7 |
| Malayan Cement |
LMC MK |
6.00 |
1,950 |
12.0 |
13.5 |
7.4 |
7.8 |
0.8 |
10.2 |
27.7 |
| Cahya Mata Sarawak |
CMS MK |
1.21 |
308 |
9.0 |
8.1 |
n.a. |
n.a. |
2.5 |
4.3 |
(7.9) |
| Chin Hin |
CHIN MK |
2.2 |
1,878 |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
66.9 |
| Siam Cement |
SCC TB |
226.0 |
8,528 |
18.9 |
21.7 |
13.4 |
12.0 |
2.3 |
3.8 |
67.1 |
| Eugene Corp |
023410 KS |
3500.0 |
195 |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
77.0 |
| Peer Average |
|
|
|
14.1 |
14.6 |
9.3 |
8.4 |
1.9 |
8.1 |
35.5 |
| Pan-United |
PAN SP |
1.18 |
642 |
16.6 |
14.0 |
8.8 |
7.6 |
3.1 |
18.0 |
(11.2) |
Valuation and Recommendation
- BUY rating maintained with a higher target price of S\$1.33 (from S\$1.06), reflecting a roll-forward to 2026 earnings and a 17x 2026F PE — a 16% premium to regional peer average.
- This premium is justified by Pan-United’s superior profitability, dominant market share, and resilient margins—demonstrated by an ROE of 18%.
- The stock trades at 14x 2026F PE, offering further upside as it rides Singapore’s infrastructure upcycle and leads in low-carbon concrete innovation.
Earnings Revisions and Risks
- 2025/26/27 earnings forecasts were trimmed by 10%/11%/16% respectively due to refined margin assumptions.
- Potential share price catalysts include:
- Earnings-accretive acquisitions
- More infrastructure projects awarded than expected
- Higher-than-anticipated dividends
Conclusion: Poised for Sustainable, Long-Term Growth
Pan-United’s integration, digitalisation, and capacity expansion create a powerful platform for value creation, supporting industry-leading margins, robust cash generation, and attractive shareholder returns. With strong project visibility, a healthy balance sheet, and clear sector tailwinds, Pan-United remains a compelling investment in Singapore’s infrastructure and building materials space.
