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Joelton
Supreme |
15-Oct-2022 20:36
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Pan-United to dispose stake in Indonesian aggregate producer for S$3.5m
READY-MIX concrete provider Pan-United Corporation : P52 +3.95% entered into a sale-and-purchase agreement on Friday (Oct 14) to dispose of its 49 per cent stake in Pacific Granitama (PTPG), a company that mines, produces, sells and exports aggregates and other materials from a Riau Island quarry.
In its bourse filing, the company said it was selling its entire stake in the company for S$3.5 million to Mega Alam Perkasa, which is 90 per cent owned by Wiyansand Nurdin and 10 per cent owned by Johan Nurdin.
Wiyandsand Nurdin is a director of PTPG, and Johan Nurdin is its commissioner and also the majority shareholder of Sandico Synergy Resources (SSR), the company that holds the remaining 51 per cent of PTPG.
As at Jun 30, 2022, the book value and net tangible asset value of PTPG were approximately S$7.5 million and S$6.7 million respectively.
Pan-United noted that for PTPG to apply for a new mining licence after its existing licence expires in November 2023, it must be 100 per cent owned by Indonesian nationals.
The purchase price of S$3.5 million will be paid for in seven tranches of S$500,000 every quarter to Pan-United.
The company noted that as the net book value of the sale shares was approximately S$5 million as at Sep 30, 2022, the loss on the proposed disposal amounts to about S$1.5 million, assuming that the proposed disposal is completed on Dec 31, 2022.
It added that the net proceeds from the disposal are approximately S$3.4 million, which will go towards the group&rsquo s working capital requirements and other future projects undertaken by the group.
If the transaction had been completed on Jan 1, 2021, the company&rsquo s pro forma net asset value per share as at Dec 31, 2021 would fall to S$0.288 from S$0.293, while its pro forma earnings per share would fall to S$0.221, from S$0.267 for the financial year ended Dec 31, 2021.
As the company sources aggregates from PTPG, it has also entered into a supply-and-purchase agreement to buy aggregates and other materials from quarries operated by both PTPG and SSR.
Under the agreement, Pan-United Concrete will have the right to purchase up to 90 per cent of the aggregates and other materials produced from these quarries for an initial term of five years from the closing date, with the option for another two-year extension.
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Joelton
Supreme |
04-Aug-2022 09:36
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Pan-United H1 net profit up 94% to S$13.5 million on back of higher revenue
READY-MIX concrete producer Pan-United Corporation on Wednesday (Aug 3) posted a 94 per cent rise in net profit to S$13.5 million for its first half ended Jun 30, compared to S$7 million a year ago.
Revenue for the half year rose 22 per cent to S$338.1 million, from S$276.6 million a year ago.
The increase in revenue was primarily driven by the concrete and cement business, supported by the recovery of the construction industry in Singapore and higher selling prices for ready-mix concrete, the group said in a regulatory filing.
Earnings per share came in at 1.93 Singapore cents, up from 0.99 cent a year ago.
The group has declared an interim cash dividend of 0.5 cent per ordinary share, unchanged from a year ago, to be paid on Aug 26.
Costs of key raw materials such as cement, granite and sand rose further in H1 2022, in tandem with increasing commodity prices, the group noted. This led to a 20 per cent rise in raw materials, subcontract costs and other direct costs for the half year to S$261.8 million, up from S$218.1 million a year ago.
The group also saw an increase in other expenses, especially energy costs in recent months. Additionally, with the tight skilled labour market situation in Singapore, staff costs have also risen.
Other income decreased by 46 per cent to S$1.8 million, down from S$3.3 million a year ago, without grants from the government&rsquo s Covid-19 support scheme, the group said.
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Joelton
Supreme |
11-Jul-2022 11:58
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Pan-United sees new opportunities in sustainable concrete
Ready-mix concrete provider is investing in research and development to come up with products that are less carbon-intensive
AS Singapore&rsquo s largest ready-mix concrete provider, with a market share of about 40 per cent, Pan-United Corporation : P52 -1.11% sees plenty of potential in driving the adoption of sustainable concrete.
In its annual report released in April this year, the company committed to supplying only low-carbon concrete by 2030 and pledged to offer carbon-neutral concrete products by 2040. And by 2050, the aim is to be carbon-neutral.
Pan-United&rsquo s chief executive, May Ng, said the company is investing about 2 per cent of its revenue in research and development to make its products more sustainable.
Last year, the company provided Surbana Jurong with concrete that was created with carbon mineralisation technology.
As the concrete is mixed, carbon dioxide is injected to form calcium carbonate. This not only captures and stores carbon, but also strengthens the material.
In January this year, Pan-United signed a memorandum of understanding with Shell to collaborate on ways to repurpose carbon dioxide and industrial waste from the oil major&rsquo s Singapore operations as raw materials to produce low-carbon concrete.
&ldquo I think we have to be more relentless in reducing natural resources (used) by replacement and substitution with other waste material by-products,&rdquo Ng said.
The concrete manufacturing process is highly carbon-intensive. Cement is a major component of concrete, and the former is manufactured out of various minerals &ndash including limestone. These minerals need to be crushed and heated in kilns to about 1,500 deg C to create clinker.
The chemical process that bonds the minerals releases carbon dioxide, while fossil fuels are also used to heat the kilns to such high temperatures.
Other alternatives such as recycled concrete aggregate and solar panel waste have been used as raw materials, but not in large quantities.
Noting that cement accounts for 7-8 per cent of carbon dioxide emissions globally, Ng believes that ready-mix concrete companies can make a dent if they can halve the amount of cement used in their products.
She is also anxious to avoid greenwashing, and said the company will try to avoid the use of offsets to meet its climate targets.
&ldquo Offsets can be costly, but it is also an easy way out&hellip Let&rsquo s tackle what we do and maximise the opportunities we have to reduce the carbon dioxide emissions until the technology is exhausted,&rdquo she said, adding that the company will also seek out good quality offsets if it does use them.
Innovating towards customer satisfaction
Aside from watching its emissions, Pan-United also works with clients to provide solutions that make their operations more efficient.
Below the asphalt of the runways at Changi Airport, a cement-treated base, which is a flexible and stabilised underlayer of concrete, was added to cushion the impact of aircraft landings and other heavy loads. This reduces the amount of downtime required to maintain the runway.
Another product innovation is the company&rsquo s self-compacting concrete, which does not need noisy mechanical compactors to place and consolidate.
While these more advanced forms of concrete do cost more, Ng said they also save clients both manpower and time in the construction process.
&ldquo Rather than looking at the cost of one material, if you look at it from a total cost basis&hellip the contractor, the developer, even the neighbourhood around the batching plant will benefit from it,&rdquo Ng said.
She also believes the adoption of new building materials will depend on whether regulators are in tune with such developments.
In addition, the company has been raising awareness about such products with clients. Pan-United co-organised a webinar with the Institution of Engineers, Singapore, in October last year to encourage industry players to adopt carbon reduction and utilisation techniques.
Road to recovery
The company&rsquo s financials, which took a severe hit from the Covid-19 pandemic, have recovered substantially. Net profit stood at S$18.7 million for the year ended Dec 31, 2021, up from S$1 million in FY2020.
Its net profit level has yet to recover to the S$20.5 million recorded for FY19 before the pandemic struck, but net profit margin improved to 3.2 per cent in 2021, from 2.7 per cent in 2019.
Reflecting prudence, Pan-United also brought its net gearing ratio down to 0.01 &ndash as net debt declined to S$1.9 million from S$36.1 million at the end of 2020.
The company declared dividends of S$0.016 for FY21, up from S$0.008 that it paid out in FY20 and equal to the amount paid in FY19.
This gives the stock a historical dividend yield of 3.6 per cent, based on its close at S$0.445 on Friday (Jul 8). Its share price is also 1.5 times its net asset value per share, which stood at S$0.293 as at Dec 31, 2021.
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Joelton
Supreme |
15-Jun-2022 09:33
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PhillipCapital raises TP on Pan-United by nearly 50% as construction recovery quickens
With the construction sector recovery gaining pace, demand for ready-mixed concrete will drive Pan-United Corporation (Pan-United) into a net cash position by 1HFY2022F ended June, says PhillipCapital Research senior analyst Terence Chua.
&ldquo With an approximately 40% market share in the industry, we continue to see Pan-United as a key beneficiary of the construction sector recovery. Pan-United&rsquo s batching plants still have capacity to take on a 10%-15% increase in ready-mix concrete (RMC) demand in Singapore,&rdquo writes Chua.
In a June 13 note, Chua is maintaining &ldquo buy&rdquo on Pan-United with a higher target price of 68 cents from 46 cents previously. The new target price represents a 64.7% upside.
According to data from the Building and Construction Authority (BCA), demand for ready-mixed concrete (RMC) for the first three months of 2022 was 5% higher than the same period in 2021.
The construction recovery remains on track with progress payments billed for 2021 at 32.5% higher than 2020.
See also: CGS-CIMB lowers SIA&rsquo s TP to $5.75 as multiple risks potentially clouding strong revenue trend
Contracts awarded for the first three months of 2022 were also 33.2% higher than 2021.
Rising concrete price
The price of RMC has also risen by 8.4% from December 2021 to April 2022, driven by a combination of higher raw materials costs and demand.
The higher cost of its components like sand, freight and bunker fuel cost have all driven up the price of RMC.
For instance, the average daily charter hire of the Supramax and Handysize has risen from an average US$28,650 ($39,877.22) per day in 2021 to US$31,350 today.
The construction recovery is ahead of Chua&rsquo s expectations. &ldquo We upgrade the forecast of total RMC volume to 13.5 million cubic metres for 2022 compared to 12.8 million cubic metres previously. With the construction sector recovering at a faster pace in the first quarter of the year than we expected, we upgrade our forecast of total RMC volume for the year.&rdquo
He adds: &ldquo We expect construction demand to remain robust for the next few years, supported by strong demand for public housing and the backlog of projects from Covid-19 delays.&rdquo
According to Chua, BCA has forecast annual construction demand of $25 billion - $32 billion from FY2023-26 and these forecasts do not include the resumption of Changi Airport Terminal 5.
Singapore&rsquo s Housing Development Board (HDB) has announced that it will ramp up the supply of new build-to-order (BTO) flats over the next two years to meet the strong housing demand from Singaporeans. It plans to launch up to 23,000 flats per year in 2022 and 2023, which represents a significant increase of 35% from the 17,000 flats launched in 2021.
Minister for Transport S Iswaran also recently announced that Changi Airport&rsquo s Terminal 5 project will resume after being put on hold for two years due to the Covid-19 pandemic.
Manpower shortage resolved
For more stories about where money flows, click here for Capital Section
With Singapore&rsquo s borders gradually reopening, work permit holders have returned to the hardest-hit sectors such as construction and marine shipyard. According to the Ministry of Manpower, work permit holders in these sectors now account for more than 90% of pre-pandemic levels.
&ldquo We expect that the manpower tightness at PanU has now been fully resolved and staffing can be ramped up should the group require it to meet the rising demand in the next few years,&rdquo writes Chua.
With the faster pace of recovery in 1QFY2022, Chua has revised upwards our forecast for the group. &ldquo We now expect Pan-United to report free cash flows of approximately $14 million for 1HFY2022, which will be used to repay down some $5 million in loans. We expect this to accelerate the group&rsquo s move into a net cash position by 1HFY2022.&rdquo
Supply chain risks
That said, supply-chain disruptions and volatile freight costs squeeze margins. &ldquo With the rapidly rising price of RMC, we continue to watch for receivables risk in the sector,&rdquo says Chua.
General provision margin was slightly weaker for 2HFY2021 as raw materials price rose at a faster pace than the average selling price, says Chua. Average selling prices (ASPs) are 8.4% higher compared to December 2021.
PanU also faced disruptions in raw-material supplies and had to search for alternatives. Supplies from new sources require lead times of a month for BCA testing before they can be imported. This hampered its ability to fulfil contracts.
With coal prices up 135% year to date, we believe cement prices will remain elevated. We believe the rising cost of RMC is a potential concern, though this is mitigated by the group&rsquo s ability to pass these costs to its customer and trade credit insurance, Chua adds.
In the near term, projects in the pipeline that will likely support the group&rsquo s growth are the Singapore Science Centre&rsquo s relocation, the Toa Payoh integrated development, Alexandra Hospital redevelopment, Bedok&rsquo s new integrated hospital, Phases 2-3 of the Cross Island MRT Line and the Downtown Line&rsquo s extension to Sungei Kadut.
&ldquo With an approximately 40% market share in the industry, we continue to see PanU as a key beneficiary of the construction sector recovery. PanU&rsquo s batching plants still have capacity to take on a 10-15% increase in RMC demand in Singapore,&rdquo writes Chua.
He raises FY2022F/FY2023F earnings by 35%/26% respectively on account of the higher demand for RMC brought about by the construction recovery.
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Joelton
Supreme |
31-Mar-2022 08:12
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CGS-CIMB initiates Pan-United with ' add' on construction upcycle
READY-MIX concrete (RMC) supplier Pan-United Corp : P52 +10.39% is likely well positioned to ride on the strong recovery in the construction industry with its large market share in Singapore, said CGS-CIMB.
In a report on Tuesday (Mar 29), CGS-CIMB' s research team initiated its coverage on Pan-United with an " add" call and target price of S$0.56, noting that the counter' s current valuations - at 3.9 times the brokerage' s estimates for its FY2023 enterprise value multiple - look attractive.
The research team' s target price is pegged to 6.6 times the brokerage' s estimates for Pan-United' s FY2023 enterprise value multiple.
Shares of Pan-United were trading at S$0.40 at 9.29 am on Wednesday, up S$0.015 or 3.9 per cent.
CGS-CIMB expects Pan-United to maintain its market share of around 40 per cent via its integrated value chain and strong product capabilities, with its research and development capabilities and sustainability efforts.
The company should also see a strong demand for RMC from 2022 to 2024, as construction works pick up amid mounting backlogs due to pandemic delays and easing foreign labour shortage.
Some notable projects that can spur demand include Changi Airport Terminal 5 and expansion plans for the integrated resorts, as well as construction of the Cross Island MRT Line, berth and jetty facilities at Tuas Terminal and Jurong Island, and the Tuas water reclamation plant.
As Pan-United is also one of the leading providers of sustainable concrete products in Singapore, it should benefit from Singapore' s shift to becoming a low-carbon economy.
The research team expects the company will be able to sustain a 5.4 per cent dividend yield given its strong cash-generating capabilities and net cash position.
It expects concrete and cement revenue to grow 21 per cent on year as construction activities resume across the company' s key markets, while earnings per share will likely grow 31 per cent in FY2022.
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SmallSmall
Supreme |
30-Mar-2022 17:39
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Closed at day high .... $0.425
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SmallSmall
Supreme |
30-Mar-2022 13:28
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Brokers' take: CGS-CIMB initiates Pan-United with ' add' on construction upcycleWED, MAR 30, 2022 - 10:11 AM
READY-MIX concrete (RMC) supplier Pan-United Corp is likely well positioned to ride on the strong recovery in the construction industry with its large market share in Singapore, said CGS-CIMB.
PHOTO: PAN-UNITED CORP
READY-MIX concrete (RMC) supplier Pan-United Corp : P52 +5.19% is likely well positioned to ride on the strong recovery in the construction industry with its large market share in Singapore, said CGS-CIMB. In a report on Tuesday (Mar 29), CGS-CIMB' s research team initiated its coverage on Pan-United with an " add" call and target price of S$0.56, noting that the counter' s current valuations - at 3.9 times the brokerage' s estimates for its FY2023 enterprise value multiple - look attractive. The research team' s target price is pegged to 6.6 times the brokerage' s estimates for Pan-United' s FY2023 enterprise value multiple. |
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Joelton
Supreme |
22-Mar-2022 09:11
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Lim & Tan starts coverage on Pan-United with ' buy' , S$0.54 target
CONCRETE and cement provider Pan-United Corporation : P52 +12.86% is poised to enjoy year-on-year earnings growth in FY2022 due to upcoming infrastructure projects and rising ready-mix concrete (RMC) prices, according to Lim & Tan Securities.
The brokerage has initiated coverage on the stock with a " buy" call and price target of S$0.54. This is based on an EV/Ebitda (enterprise value/earnings before interest, taxes, depreciation and amortisation) ratio of 6.9 times, and represents a discount of 10 per cent to the stock' s peers (see amendment note).
" We like Pan-United primarily based on the currently strong macro outlook and strong company fundamentals," said Lim & Tan in a report on Monday (Mar 21).
Highlighting the company' s strong balance sheet and sustainable cash flows, the brokerage underscored significant improvement in its FY2021 net gearing to 1 per cent from 18 per cent in FY2020.
This is coupled with the company' s favourable FY2021 financials as net profit after tax returned to pre-Covid levels, despite lower government grants and increased tax expenses compared with the previous fiscal year.
Going forward, Lim & Tan foresees Pan-United benefiting from higher RMC prices and order book backlog to report a stronger net profit in FY2022.
The research house projects a higher dividend of 2 Singapore cents per share, which translates to a yield of 5.7 per cent based on the stock' s last closing price of S$0.35. This is compared with the current payout of 1.6 cents per share, representing a 4.6 per cent yield and 55.7 per cent payout ratio.
Lim & Tan also noted that the company has bought back around 41.7 per cent of their total share buyback allowance at increasing prices since December 2021. This signals that current prices are attractive to Pan-United' s management, in the research house' s view.
Citing increased Building and Construction Authority (BCA) projections for construction demand in 2022, the research house said it was optimistic that upcoming government-led, multi-year infrastructure projects are set to propel " better earnings" for Pan-United in FY2022.
" On the back of pent-up demand in the market, (BCA' s) 2023-2025 forecasts were also project to reach between S$25-32 billion annually. This is up from the previous projection of S$23-28 billion, owing to accelerating easing of the restrictions brought about by good domestic pandemic management," it added.
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SmallSmall
Supreme |
21-Mar-2022 13:11
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Brokers' take: Lim & Tan starts coverage on Pan-United with ' buy' , S$0.54 target |
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Joelton
Supreme |
15-Mar-2022 09:26
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Phillip raises Pan-United TP to S$0.46 on construction sector recovery
CONCRETE and cement provider Pan-United Corporation PanUnited: P52 -1.43% should see earnings pick up in FY2022 amid a recovery in the construction sector, said Phillip Securities Research.
In a report on Monday (Mar 14), senior research analyst Terence Chua raised his target price on the company to S$0.46 from S$0.44, and maintained a " buy" call on the counter.
He had raised earnings estimates of Pan-United by 11 per cent for FY2022, as he expects a higher demand for ready-mix concrete amid the construction recovery.
Shares of Pan-United were trading at S$0.345 at 3.31 pm on Monday, down S$0.005 or 1.4 per cent.
Chua expects Pan-United will be a key beneficiary of the construction sector recovery, given it has around 40 per cent of market share in the industry.
This comes as the Building and Construction Authority (BCA) upgraded its forecasts for construction demand for 2022 it also projected that demand for building materials will increase in tandem with the increased construction demand.
For FY2021, the company also paid full-year dividends of 1.6 Singapore cents, above its dividend policy, which Chua said " signals the group' s confidence in its near and mid-term outlook" .
Pan-United posted a net profit of S$18.7 million for the full year ended Dec 30, 2021, up from the S$1 million a year earlier. Revenue was up 45 per cent to S$586.9 million, largely driven by the group' s concrete and cement business.
The results surpassed Chua' s expectations, with net gearing falling below his forecasts, while dividend per share exceeded his estimates.
However, the analyst said manpower shortages, supply-chain disruptions and volatile freight costs will likely continue to hamper recovery in the company' s growth, which may then affect its gross profit margins.
He expects prices of raw materials - which rose at a faster pace than average selling prices - would unlikely moderate in the near-term, given strong demand for construction materials in the region.
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Joelton
Supreme |
23-Feb-2022 10:32
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Pan-United posts S$18.7m net profit for FY21
PRODUCER of ready-mix concrete Pan-United Corporation PanUnited: P52 +2.9% on Tuesday (Feb 22) posted a net profit of S$18.7 million for the full year ended Dec 30, 2021, up from the S$1 million the previous year.
Earnings were driven by the higher share of results of its associate of S$5.3 million.
Revenue was up 45 per cent to S$586.9 million from S$405 million. The bulk of revenue came from the group' s concrete and cement (C& C) business, which grew 48 per cent year on year to S$573.5 million, with the recovery of construction activities in Singapore.
But the group is bracing for a tougher operating environment in Singapore amid the ongoing manpower crunch, higher raw material costs as well as volatile freight costs and energy prices.
It had already in FY2021 been dealt with higher operating costs such as that of raw materials. Staff cost and other expenses have also increased due to manpower challenges from a tighter labour market and the increase in business activities, said Pan-United.
Earnings per share for FY2021 came in at 2.67 Singapore cents, versus 0.15 cent the year before. Net asset value per share stood at 29.3 cents as at Dec 31, 2021, up from 27.7 cents as at end-2020.
A final dividend of 1.1 cent per share has been proposed and will, subject to shareholders' approval, be paid on May 13.
Pan-United said that the demand for construction in the private sector is expected to be comparable to last year' s. It will be further lifted by an increase in commercial and institutional construction demand as hotels and attractions undergo refurbishment and older commercial premises are earmarked for redevelopment.
Private residential construction demand is expected to moderate amid more cautious market sentiments.
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MakeChanges
Elite |
06-Jan-2022 13:06
Yells: "No price is too low for a bear or too high for a bull" |
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FICO PAN-UNITED SIGNS 2022-2024 COOPERATION AGREEMENT WITH NOVALAND FiCO Pan-United Concrete Joint Stock Company (' FiCO PanU' ), a subsidiary of Singapore-listed Pan-United Corporation Ltd, has strengthened its longstanding working relationship with Novaland Group (' Novaland' ) with the signing of a 2022-2024 cooperation agreement. This will see FiCO PanU providing sustainable concrete solutions to Novaland, a leading prestigious brand in the real estate investment and development industry in Vietnam. Under the terms of the agreement, FiCO PanU will construct two onsite batching plants at the site of Aqua City, a large-scale smart eco-urban integrated development in Dong Nai province undertaken by Novaland, by 2022. Collectively, the two plants will supply about 700,000 m3 of ready-mix concrete to the Aqua City project over a two-and-a-half-year period. FiCO PanU has commissioned the first plant in December 2021. Located in Bien Hoa, Dong Nai, the Aqua City project comprises residential units and high-end amenities such as schools, hospitals, a sports complex, a shopping and entertainment complex, among others. The convenient location of the batching plants onsite will facilitate the efficient and timely supply of concrete. This will also minimise fuel, energy and water use across the project operations and reduce embodied carbon emissions associated with the delivery of raw materials. Additionally, it allows the construction site to benefit from a continuous supply of concrete and ensures the efficient progress of the project, to meet project completion deadlines. FiCO PanU will develop high-quality concrete and high-performance low-carbon mortar using its PanU CarbonCureTM Carbon Capture and Utilisation (CCU) technologies over the period, first, for the Aqua City integrated development, and subsequently, for other Novaland developments. Steven Loh, General Director of FiCO PanU, said, ' The cooperation agreement attests to the strong and longstanding relationship we have built with Novaland. We look forward to playing a meaningful role in the development of the iconic Aqua City and to fulfilling our commitments to Novaland developments in Ho Chi Minh City and Dong Nai. This partnership also highlights our shared commitment towards sustainable building development needs for the Vietnamese market and our contributions to the achievement of Vietnam&rsquo s stated goal of net-zero carbon emissions in 2050.' FiCO PanU and Novaland have an established working relationship spanning more than ten years. FiCO PanU has supplied ready-mix concrete required for foundation uses to building constructions for diverse Novaland projects across Ho Chi Minh City in Districts 1, 2, 4 and 7, as well as in Phu Nhuan, Tan Binh, Go Vap. |
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MakeChanges
Elite |
05-Jan-2022 08:54
Yells: "No price is too low for a bear or too high for a bull" |
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PAN-UNITED AND SURBANA JURONG TEAM UP TO DECARBONISE HEAVY VEHICLE TRUCKING FLEET -Exploring the conversion of Pan-United' s entire trucking fleet of more than 1,000 trucks to electric and hydrogen powered vehicles -Partnership aligns with Pan-United' s sustainability targets one of which is to become a carbon-neutral RMC company by 2050. |
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Joelton
Supreme |
04-Aug-2021 09:19
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Pan-United H1 net profit jumps to S$7.3m as construction activities resume
PAN-UNITED, Singapore' s biggest producer of ready-mix concrete, on Tuesday posted a first-half net profit of S$7.3 million - from just S$138,000 in the same period a year ago - as construction activities pick up in Singapore.
Revenue for the six months ended June 30, 2021 (HI 2021) came in at S$276.6 million, a 45 per cent year-on-year increase.
The group declared an interim cash dividend of 0.5 Singapore cent per ordinary share, to be paid on Sep 9, 2021.
Earnings per share came in at 0.99 cent, higher than 0.04 cent a year ago.
With the resumption of construction activities in Singapore, Pan-United' s concrete and cement (C& C) business saw a 50 per cent jump in revenue to S$272 million, as compared to H1 2020 where construction activities were suspended during the circuit-breaker period.
Trading and shipping revenue, however, came in lower at S$4.6 million in H1 2021 on falling trading volumes, said the group in a bourse filing.
The raw materials, sub-contract costs and other direct costs had increased in tandem with higher revenue overall.
With the increase in business activities, staff cost including variable compensation expenses and other expenses, such as maintenance and rental, had also normalised to pre-Covid levels, said the group.
It noted that construction activity in 2021 continues to be " healthy" and driven mainly by the public sector. The Building and Construction Authority has projected for Singapore' s total construction demand to range between S$23-28 billion this year.
That said, the surge in Delta variant cases and a tightening of border control measures have restricted South-Asian workers from entering Singapore, which exacerbates the manpower shortage issue, said Pan-United.
Supply of raw materials may also be further disrupted if lockdowns in neighbouring countries such as Malaysia and Vietnam are extended.
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AnthonyWoodPeck
Member |
13-Jul-2021 09:48
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  Hi guys, PanUnited ($0.315/$0.320) - This counter more for investing. - slow and stable trending upwards - recently some minor buying activity too with some buying at $0.320 earlier. - Construction sector looks like reviving too. If so, cement is the core component. - Have noticed their fleet of cement trucks everywhere too. Expecting their upcoming results to be decent too. Giving credit to the owner as all these are are being mentioned in the tele channel as shown in the picture that I' m currently inside right now. |
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Joelton
Supreme |
03-May-2021 09:30
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Pan United: Cementing a path for new opportunities
Pan-United has invested significant resources in developing its product offerings which are now used to create a new source of revenue.
" CONCRETE is not just a grey slab," May Ng says more than once. The chief executive of Pan-United Corporation (Pan-United) is keen to highlight the complexities involved in producing the building material.
It has to perform consistently and in many different ways, she says, highlighting the different functionalities - from being fireproof to radiation shielding. A lot of work is necessary to perfect this " grey slab" .
Pan-United is Singapore' s largest supplier of ready-mixed concrete (RMC) and cement. It has formulated over 300 types of concrete to meet different building requirements. And they aren' t all grey some are red, some have multi-coloured specks, and some even have a luminous glow to them.
Concrete variations are among the many innovations that Pan-United has invested in over the years, and the company is now looking to take them one step further.
Pan-United' s central operations are housed in a nondescript factory building which includes two floors of laboratories. Here, research and development are done for its different concrete products. There is also a command centre, opened in 2014, spanning an entire floor and powered by the company' s Artificial Intelligence for RMC (AiR) technology.
AiR is a digital platform that oversees operations across Pan-United' s supply chain. It allows customers to place their orders online, provides real-time location data for mixer trucks delivering materials to construction sites, and handles e-billing matters, among other things.
At its command centre, the company can conduct remote surveillance of site operations both locally and overseas. Employees at the centre receive customer calls, monitor on-site safety, and advise drivers of mixer trucks on the best delivery routes. Manpower has been reduced by some 40 per cent as a result.
The logistics of the operations is very important, particularly the delivery process, says Ms Ng. Concrete has a shelf life of just two hours.
In 2019, Pan-United launched goTruck!, which Ms Ng describes as " Uber for raw materials and cargoes in Singapore" . The service matches cargo owners who want to move materials with transport companies.
At present, goTruck! serves about 40 per cent of Singapore' s total tipper truck demand for transporting raw materials in the construction sector.
Digitalisation efforts
Last year, the company equipped its concrete mixer trucks with an in-transit concrete management system called artificial intelligence mixing, or AiM. It calibrates each truck' s concrete consistency during the journey from the batching plant to the project site, and remotely adjusts the concrete mix if changes in consistency are detected.
Since 2014, Pan-United has invested some S$20 million in its digitalisation efforts for the command centre, AiR, goTruck! and process innovations such as AiM. Many capabilities have been developed in-house and are the company' s intellectual property.
To monetise these investments, the company in 2019 began changing its business model to offer products and services to other RMC companies in the region.
" Through that, we can actually grow our topline and bottom line. Besides being in our core business, we are actually generating new revenue from different ways," says Ms Ng.
" The business model is based on a service model," she says, adding that this allows for a " subscription-based model" that " creates a very nice level of stable earnings for us, and returns. And it allows us to continue to invest more into this business, so it actually improves the quality of our earnings" .
It may, however, be some time before Pan-United can reap the full benefits of its new business model.
Ms Ng says that while interest is good among other RMC players, the Covid-19 has slowed things down.
" We can' t travel, and also the customers (are) obviously not working in the office all the time, so it' s very hard to coordinate, especially when you have to deal with different departments in a project like this."
Nonetheless, Ms Ng believes there is still a keen interest in and need for such technologies in the region.
Addressing pain points
" The savings are there, it reduces the complexity, you save manpower, you improve your quality in your service... It addresses a lot of pain points of RMC companies in this business. We know that there will be tremendous benefit," she says.
In January last year, Pan-United announced that its technology subsidiary AiR Digital Solutions had entered into a memorandum of understanding with South Korean RMC company Eugene Corporation to explore opportunities for Eugene Corp to adopt AiR.
Pan-United is studying how to localise and adapt the system to fit the needs of the South Korean market, while Eugene Corp will test out the system thereafter.
Another hurdle to overcome would be convincing RMC companies to come on board.
Says Ms Ng: " It takes a lot to adopt it, because you need a changed management. The operations of a RMC business is quite complex because of the sheer volume. But if you' re able to undertake a changed management and adopt (the technologies), you can simplify a lot of (things), because the system takes over a lot of what you have to do.
" To get there, you require like-minded companies to be able to realise that."
The strength of Pan-United' s concrete and cement business - which also spans across Vietnam and Malaysia - is reflected in its results.
In FY2019, revenue generated from its concrete and cement business increased 13.1 per cent year-on-year (y-o-y) to S$617.33 million, from S$545.71 million. Net profit for the segment grew to S$26 million from S$8.53 million in FY2018.
Last year, even as the built environment sector suffered the brunt of the pandemic, the group' s concrete and cement business still turned in a net profit of S$6.96 million, on the back of S$388.11 million in total revenue.
Ms Ng believes that Pan-United can leverage its tried-and-tested approach and its strong track record to boost growth in its new business model, be it through the adoption of its systems or product licensing for its concrete products.
Focus on core business
Notable projects under its belt include the Helix Bridge, Gardens by the Bay, and The Interlace, a residential development with a unique Jenga-like architecture.
At the same time, there is some uncertainty for Pan-United' s other business segment of trading and shipping.
In FY2019, total revenue for the segment declined to S$155.14 million, from S$318.47 million in the previous year. Net profit similarly fell to S$1.96 million, from S$3.18 million in FY2018. In FY2020, net profit stood at S$477,000, while revenue was S$18.7 million.
In 2016, Pan-United sold its tug-and-barge business but decided to continue with the trading business " to continue to support our existing customers by supplying raw materials such as coal and gypsum to them" .
A change in procurement policy had affected the group' s business in this segment in FY2020, when its customers decided to source for more resources locally.
" I think customers do change their procurement policy, depending on whether they import the raw material or source domestically... that changes from time to time, so it' s quite dynamic," Ms Ng says.
At present, the group is trying to continue to support its customers in the trading and shipping business. But there are no specific plans to grow this segment.
The focus is on Pan-United' s core RMC and cement business.
Says Ms Ng: " For us, the concrete is the core business it' s the one that spins all the magic. Because we continue to invest in it and because this is where we specialise in, our aspiration is to be world class."
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newbie19
Supreme |
11-Feb-2021 21:36
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Happy Lunar New Year to everyone here.. May Niu year brings good health not forgetting HUAT all the way to the banks..😁 | ||
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des_khor
Supreme |
13-Jan-2021 19:26
Yells: "Tell me who is God or Market Fortune Teller in this forum ??" |
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Privatisation ?? | ||
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iinvestor
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13-Jan-2021 19:15
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Yess...same observation. slowly inching up...steady. Sell port then sell cement? 
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des_khor
Supreme |
13-Jan-2021 17:15
Yells: "Tell me who is God or Market Fortune Teller in this forum ??" |
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Someone accumulate in action ... | ||
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