Pan United Corporation

[weijian]

The downturn in RMC prices in Spore has been deep and long, similar to that of global oil prices. In this period, PanUnited's local market share has increased from ~30% to 40% (achieved during the 2016-2017 trough of RMC prices). RMC has been running at slightly above 100 bucks since 2H21. Looking at the historical annual prices of RMC, it is the highest in the last 7 years. Is there a better sign of things to come?

BCA expects 2022 construction demand between S$27b and S$32b, supported by public sector projects

Currently, ready-mixed concrete demand is expected to increase to between 12.5 million and 14 million cubic metres, from 11.6 million cubic metres in 2021. Demand for precast concrete is also projected to rise to between 1.6 million and 1.8 million cubic metres, up from 1.1 million cubic metres in 2021, while steel rebar demand is expected to climb to between 1 million and 1.2 million tonnes, up from 0.9 million tonnes last year.

https://www.businesstimes.com.sg/governm...-by-public

historical RMC annual avg prices: https://www.statista.com/statistics/9945...singapore/
BCA info: https://www1.bca.gov.sg/e-services/key-c...nformation

2 years ago, things were looking up for general construction and building materials but it subsequently proved to be a false start. 2022 RMC demand was projected to increase from 11.6mil to 12.5-14mil cubic metres but 2022 eventually turned out comparable to 2021.

In 2023, RMC demand was 12.25bil and 2024 forecast is expected to be 12-13mil cubic metres. Will this commodity provider finally take off again after the false start?

- A modest +30% NP YoY improvement. If excluding the coal bonzana of FY22 (10% associate), its RMC ops would have ~+40% NP YoY improvement.

- As a % of FCF, dividend payout ratio is only ~30% of FCF since FY19 (last 5 years). Working capital (receivables/payables/inventory) has largely been unchanged. Cash has largely been unchanged. The significant change to its balance sheet, has been a reduction in gearing from ~53% (107mil) to current 9% (21mil).

- The current gearing looks to be comfortable and with BCA projecting robust demand in the years ahead, would we be expecting the Ngs to continue to increase dividend in coming years? (even though it has already hiked FY23 dividend by 30%)

PanUnited FY23:
https://links.sgx.com/FileOpen/PUC_FY202...eID=786302

[weijian]

It's great that the CAPEX is spent by your regulator/landlord to help you to save costs. But will any cost savings immediately be competed away?

RMC (ready made concrete) is largely a commoditized product and is really cheap on weight basis. Since the Spore market is small, the RMC market here works on an efficient scale manner. YTL Cement's entry in 2014 coincided with the Spore construction industry starting its downturn 1 year later in 2015. Have the existing players learnt to "tiptoe at similar height" when watching the game in the stadium?

Jurong Port opens S$200 million shared-services hub for ready-mixed concrete

PORT operator Jurong Port (JP) on Wednesday (Nov 27) opened a S$200 million shared-services hub for ready-mixed concrete, which will enable construction companies to streamline logistics planning and cut costs.

The Ready-Mixed Concrete (RMC) Ecosystem facility, part of a planned Integrated Construction Park (ICP), offers services such as centralised recycling, truck washing and logistics planning. The system will improve storage capacity by 75 per cent, saving up to 8 hectares of land in the process, and cut more than a million truck trips.

Terence Seow, JP’s chief executive officer, said the port operator worked closely with various government agencies and industry partners “to collectively innovate, revamp and relocate a well-entrenched RMC supply chain to be adjacent to the waterfront”.

Spanning 11.9 hectares, the RMC facility has 11 aggregated plots. Six are used for common storage, while the remaining five are integrated with RMC plants. They are fully occupied by nine local companies, said JP.

https://www.businesstimes.com.sg/propert...d-concrete

[weijian]

AG Partners first caught my eye with their blockbuster returns from Oiltek and the delisting of Dyna-Mac. In their annual letter, they were gracious to name the equity analyst who did all the heavy lifting on Dyna-Mac. Personally, I think these guys definitely deserve a bite of MAS's 5billion pie.

Spore construction industry last boomed more than 10years ago. It kickstarted again in 2019 before covid-19 interrupted for a few years. With all the backlog piled up since April2022 re-opening of borders, the heightened safety period (2H22-1H23) is now considered a relative non-event. There is probably going to be a few good years ahead with Centurion Corp leading the pack first, in terms of returns.

Coincidentally, the 3 companies mentioned by AGT Partners are also almost the ones that I had shortlisted (to be exposed to this construction boom). But of out the three, I had only invested/averaged upwards on one. And it is the one which is just selling a commodity that has a really low price-to-weight ratio - 1 cubic meter of concrete weights 2.4tons and cost ~150bucks, the price of dinner for two in a upper-scale restaurant. So in terms of business economics, it is the worst on paper. But in terms of creating and most importantly unlocking and sharing value, Towkay Ng and his kids are the most willing of the three. I have peace leaving my capital with them for a long long time.

Construction space in a ‘sweet spot’, listcos should use ‘chance of a lifetime’

Gregory See of AGT Partners believes companies in the small- to-mid cap space hold the greatest potential for value. He has previously profited from notable stocks like supermarket opera- tor Sheng Siong Group and Oiltek International , which was a top performing stock last year.

And if you can find a good company that has good gross margins, a healthy balance sheet and of course, a strong valuation at a very cheap price, then I think it is an okay investment to go for the medium term.” One such stock, which See highlights, is OKP Holdings .

He likes Hock Lian Seng as well. “Their results are not as strong, but you look at the amount of cash and investment securities, they have equivalent to the market cap, and the business itself is still profitable.”

Pan-United is another stock See favours, due to its strong dividends and rising share price, which he notes has increased by around 50% since his initial investment. “From six to seven times multiple, now it's about 10 times because earnings went up, but not so much. So it is really about valuation re-rating.”

“For us, when we go into something, we must be quite sure that the company’s management will at least let us see, from numbers and actions, that they are quite keen to commute value and share more to shareholders, minority shareholders. So when I see that, then I will say that a particular stock has potential for revaluation,” says See.

https://agtpartners.com.sg/wp-content/up...fetime.pdf

[dzwm87]

IMO, when so many portco names are being disclosed publicly, they are ready to sell

[weijian]

IMO, when so many portco names are being disclosed publicly, they are ready to sell

Hi dzwm87,

I guess for those of us who survived (and hopefully thrived) over the years, we only did so with a healthy dose of skepticism that served us well all that time.

IIRC, you work in the fund mgt space and I don't. So I probably have to give more weightage on your comment. In the YZJFH thread, I have witnessed how ~100mil of net institutional inflows (2025 YTD) totally flipped the mood of OPMIs compared to just 1 year ago. These 3 portfolio names had their fair share of re-rating in 2024 and AGT might had been that "institutional inflow"? Maybe we will read Mr See talking about Chairman Ren soon?  Anyways, I am more interested in understanding the core principles that AGT practises and hopefully learn a thing or two to lessen my foolishness. Not too interested in when they buy/sell their long positions.

Now back to PanUnited so that I don't go out of topic.

If we look back into the last construction boom for some pattern recognition, we are probably some time away from peak earnings. In general, the final stages of peak earnings will probably coincide with a period of special dividends. So I agree with Mr See's medium term outlook as there could be more re-ratings down the road as we can never truly comprehend animal spirits.

[¯|_(ツ)_/¯]

I'm not an stock analyst and I won't be able to provide details analysis similar to our value buddies.

However, regarding these 3 stocks, I just wanted to share what I had experienced/done.

---

PanU: not vested. owned many years ago and sold after 1 year of holding as my entry price was really bad.

OKP & HLS: still vested.

OKP was vested at 30+.  Recently, when the stocks charged up suddenly, decided to sell some.  I think OKP is a great stock and so only let go 40%.  Will wait and see before selling the rest as the price is still trending up.

HLS was also vested at 30+.  Early this year, suddenly HLS price went up 40cents and suddenly, when OKP went from 30+ to 40/50 cents, HLS price went down to 30+.  Basically, what I observed is OKP and HLS prices stucked at 30+ for a long time. That happened to be when I started buying both OKP and HLS.  Then, HLS price go up but OKP remains unchanged.  After that, OKP price goes up and HLS price turned down.

What I did was to sell some OKP and buy some more HLS.

Result: Both OKP and HLS price go up. 

As for PanU, no longer vested and won't be buying soon.



Gratitude!

[weijian]

It is currently an in-trend thing to quote "AI" in one's financials/press releases. At PanUnited's AGM, we were told of the NZL customer and so it is a pleasant surprise to see that there are actually "over 20 like minded companies" across the region as customers.

AirDigital initiative started in 2014 and was commercialized 3 years ago. The development costs (~1 to 1.5mil per year) are not expensed on the P/L but capitalized on the balance sheet with a 5-10years amortization schedule.

These "independent" companies are very small players and so I wonder if larger companies (ie. PanUnited's competitors) will also adopt this supply change mgt solution. Only with scale will PanUnited be able to eventually sell this software to a SaaS player.

PAN-UNITED ADVANCES AS TECHNOLOGY LEADER WITH AiR DIGITAL’S END-TO-END OPERATIONS MANAGEMENT SYSTEM

To date, its AI-powered end-to-end operations management system has successfully built digital intelligence systems for over 20 like-minded companies spanning Southeast Asia, North Asia and Australasia. The customer portfolio includes New Zealand-based independent RMC producer Bridgeman Concrete, Malaysian quarry company East Rock and Singapore-based concrete product manufacturer Eastern Continent Construction.

https://links.sgx.com/FileOpen/Press_Rel...eID=856882

[weijian]

For some time, the thing bothering me was the wide definition of "low carbon" concrete. Concrete is made up of ~75% aggregate (sand/gravel), ~15% water and ~10% cement. For a start, using recycled material (eg. concrete from demolished buildings) is not low carbon because it does not not reduce the embodied carbon numbers. In other words, the amount of carbon emitted in the obtaining the recycled material and sand/gravel are probably not too different.

Concrete's big unproportionally contribution to global carbon emissions is largely due to cement. Cement accounts for ~85% of total emissions in the concrete's life cycle. So low carbon concrete is really about reducing cement usage. Currently, there are 2 main ways to reduce cement usage:

(1) The most popular been using substitution materials like GGBS/fly ash and matter of fact, they are actually cheaper than cement. GGBS is first choice (compared to fly ash) due to its shorting curing time/less variability, but it is limited by availability. GGBS, a by-product of steel-making is able to replace cement at a 1:1 weight ratio. But for every 10 tons of annual cement usage, only ~1ton of GGBS is ever available.

(2) Carbon Capture and Utilization (CCU): This technology works by injecting CO2 during the RMC mixing process. The CO2 then mineralizes into part of the concrete, resulting in ~5% less cement to produce the same volumetric output. CCU has the added bonus of "capturing and using CO2 from the air" but the main contribution of CCU to reducing embodied carbon in the concrete is still reducing cement usage. This reduction can work on top of (1).

In 2018, Pan United became the 1st company outside of North America to license CarbonCure's technology for CCU. As of early 2026, PanUnited and its regional subsidiaries are still the only ones in Spore/Msia/Vietnam that supply mineralized RMC. Once, I had thought it was an expensive experiment but 7 years on, it looks like Mgt had the foresight to move boldly ahead with sustainability. BCA's Green Masterplan unveiled in 2021 kicked start the adoption of lower operational/embodded carbon requirements, and the Ngs have been right on cue with this move as regulation (and prices) increasingly nudge owners/developers towards "low carbon" solutions. In 2024, PanUnited has been astute to brand their mineralized RMC as PanU CMC+ to differentiate from competitors.

Now in early 2026, CLD has partnered with Climate Group to spec and develop the first market-wide benchmark to measure embodied carbon of RMC. I took a look at the report - There are a huge variation in measured carbon numbers and Spore is generally has higher values than the other benchmarks (UK/Aus) done by Climate Group. Since PanUnited looks to be "way ahead" than its competitors in terms of low carbon solutions (and especially at scale), I suppose all these should continue to work in their favor in the current construction boom.

Capitaland Development partnered with Climate Group with develop first market-wide benchmark for measuring the embodied carbon of concrete in March 2026. Climate Group's ConcreteZero

SINGAPORE, March 12, 2026 – Singapore has introduced its first market-wide benchmark for measuring the embodied carbon of concrete, a move aimed at accelerating decarbonisation across the built environment and strengthening transparency in construction supply chains.

The benchmark represents the most detailed analysis of the carbon intensity of concrete supplied in Singapore to date. It is based on verified environmental data from concrete suppliers and covers an estimated 68 percent of the ready-mix concrete market.

With the benchmark now established, industry stakeholders expect the data to guide procurement practices, inform certification frameworks and accelerate the transition towards sustainable construction across Singapore and the wider region.

https://carbonwire.org/carbon-initiative...-concrete/

PanUnited mentioned here: https://heyzine.com/flip-book/Concrete-d...on#page/68

[weijian]

OKP's Sustainability Report (SR) 2025 has documented their usage of carbon mineralised concrete (CMC) for their cycling path projects. And OKP has been able to quantify their CO2 emission savings based on the Environmental Product Declaration (EPD) from the CMC supplier.

In Hong Leong Asia's SR 2025, Island Concrete had installed their first CCU (Carbon Capture and Utilization) in late 2024 at the new RMC Ecosystem and completed a few trial mixes with customers over the course of 2025. The CCU technology is from the same partner as Pan United, ie. CarbonCure. However the last time I checked CarbonCure's website, only Pan United and its subsidiaries are listed as carbon mineralised concrete (CMC) providers of their technology in this region (Spore, Msia and Vietnam). So OKP's CMC supplier whom is not named in their SR, is probably Pan United. Pan United was also one of the first in the region to issue voluntary EPDs to their customers since 2024. This EPD effort enabled OKP to be able to quantify their CO2 emissions in their SR2025. In contrast, Island Concrete's EPD efforts are still a work-in-progress.

From OKP's SR2025, they have fully integrated the use of CMC and the usage of CMC has grown +60% YoY in 2025.

Using carbon mineralised concrete in construction

The Group adopts carbon mineralised concrete (CMC) to reduce embodied carbon across our projects. We have fully integrated the use of CMC into our construction processes following the success implementation in some projects. These projects included the construction of cycling paths at various locations under contract AM120, which is part of Singapore’s new Cycling Path Network spanning seven towns island wide, and the Commuter Infrastructure Enhancement project. This initiative continues in our latest contract AM205, which involves the development of over 86 km of cycling paths.

Through the adoption of CMC, we have achieved an estimated 25.0 per cent to 35.0 per cent reduction in total carbon emissions, significantly lowering the environmental footprint of the affected projects. This initiative aligns with broader efforts to reduce CO2 emissions from the construction sector, where concrete production accounts for approximately 7.0 per cent to 8.0 per cent of global CO2 emissions. The carbon reduction figures are benchmarked against the use of conventional concrete of the same grade, specifically CEM I Grade 35/20/15 SL (50-90 mm).

OKP SR25 (pg23 documenting the usage of mineralized concrete): https://links.sgx.com/FileOpen/OKP%20SR2...eID=881436