Thursday, March 1, 2012

Pan-United Corporation rated 'buy' by DBS

DBS Vickers Securities in a Feb 28 research report says: "Pan-United reported a strong earnings recovery in FY2011 underpinned by volume growth and margin expansion. Net profit surged 50% y-o-y to $30.4 million in line with our revised estimates.

"Revenue grew 31% y-o-y to RMB512.7 million, driven by robust ready-mixed-concrete (RMC) demand and port business. Gross margin expanded 2.1ppts to 16.1%, the highest since 2009 (peak was 18.9% in 2008). Company declared a higher than expected final dividend per share (DPS) of 2.0 cents (vs 1.5 cents previously), bringing FY2011 DPS to 3.5 cents.

"We expect similar dividend payout in 2012 assuming sustainable operating profits, translating to an attractive annual dividend yield of c.7% for FY2012. Sum-of-the-part-based target price is adjusted to 68 cents, as we roll over our valuation to FY2012. MAINTAIN BUY."

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