Pan-United - Market leader with multi-year dividend growth

Largest concrete provider with technology edge

Pan-United Corporation (PanU) is Singapore’s largest provider of ready-mixed concrete (RMC) and a fast-emerging digital solutions player. 

With more than 70 years of operating history, the company has transformed from a traditional building-materials supplier into a technology-enabled, low-carbon concrete specialist with an expanding regional footprint. 

Pan-United is uniquely positioned to benefit from Singapore’s multi-year construction upcycle, driven by major public infrastructure projects, strong public housing demand, and rising sustainability requirements within the built environment. 

Its strong balance sheet, industry leadership, and accelerating digital strategy provide an attractive platform for medium-term growth.

The company supplies concrete to virtually all major public and private developments in Singapore, including MRT lines, the North–South Corridor, Changi Airport, Tuas Port, and large residential and commercial projects. 

Beyond Singapore, PanU operates concrete and aggregates businesses in Malaysia and Vietnam and exports specialty concrete products to regional markets.

In recent years, PanU has also pushed into technology. It now develops its own sustainable concrete products like such as CMC+ and CarbonCure-enabled mixes, as well as its AiR Digital platform — a platform that helps manage batching, logistics and real-time production. 

This supply-chain optimisation system is used to manage concrete production, delivery logistics, and batching operations. The combination of advanced materials and digital platforms differentiates PanU from regional peers and enhances recurring revenue visibility.

Resilient 1H25 results with higher dividend

Pan-United reported a solid set of results for 1H25, helped by increased activity across public housing, transport projects and new institutional developments. 

Revenue rose 4.3% year-on-year to S$401.1 million, driven by higher concrete volumes and better demand for its specialty products.

Operating profit increased 17.4% YoY to S$41.1 million thanks to improved plant usage, more efficient truck routing, and a better product mix. 

While costs such as labour, energy and materials remained high, PanU’s pricing discipline and productivity gains helped keep margins stable.

Profit after tax and minority interests (PATMI) grew 11.0% YoY to S$20.6 million. 

The improvement came from both the core concrete business and growing contributions from the AiR Digital logistics platform, which is now gaining traction through external licensing.

PanU ended the half year with S$69.8 million in net cash, giving it strong flexibility to fund expansion without taking on high debt. 

The company also raised its interim dividend by 43% to 1.0 cent per share (vs. 0.7 cent in 1H24), continuing its steady track record of dividend increases.

This strong financial position supports PanU’s ongoing investments in low-carbon technology, digital systems, and new production plants. Consistent free cash flow also helps the company maintain dividend stability through economic cycles.

Visibility from major infrastructure wins

Earnings visibility has improved with PanU securing S$430 million of ready-mix concrete contracts for Changi Airport Terminal 5, providing an average S$86 million of annual revenue through 2030—about 11% of FY24 revenue. 

Beyond T5, PanU remains deeply involved in public housing launches, healthcare facilities, mixed-use developments and MRT projects. 

Its strong track record and customer relationships reinforce its position as the preferred partner for both public and private sector developers.

Stronger earnings visibility with major project wins such as Changi Airport Terminal 5

Pan-United’s future earnings visibility looks firm, helped by major contract wins. A key example is its S$430 million ready-mix concrete supply contract for Changi Airport Terminal 5, which runs for five years until 2030. 

This alone brings in an average of about S$86 million per year — roughly 11% of FY2024 revenue.

Beyond T5, PanU continues supplying to a wide mix of public and private projects, including new public housing estates, healthcare buildings, mixed-use developments, and MRT expansions. 

Its scale, technical capabilities and long-standing customer relationships make it a preferred supplier for major developers and contractors.

Capacity expansion to capture rising demand

To support the rising demand ahead, Pan-United is investing heavily in capacity. The group plans around S$60 million of capex in 2025, mainly for a new batching plant at the Jurong Port Integrated Construction Park. 

Expected to begin operations by end-2025 or early-2026, the plant will help improve supply reliability, reduce costs, and strengthen PanU’s market position.

Together with ongoing digitalisation and product innovation, the company is well placed to capture the next phase of Singapore’s multi-year construction boom.

Supportive construction outlook

Singapore’s construction outlook remains strong. According to the Building and Construction Authority (BCA), total construction demand is expected to reach S$47–53 billion in 2025, up from S$44.2 billion last year. 

Demand for ready-mix concrete is forecast at 13.0–14.5 million m³, representing a modest 3–8% increase year-on-year.

Public-sector projects — which now account for about 60% of total construction — will remain the key driver. Major upcoming works, including Changi T5, MRT lines, new healthcare campuses and a ramp-up in public housing, provide a strong pipeline into 2H25 and beyond. 

With its leading market share and growing production capacity, PanU is well positioned to benefit.

Scaling AiR Digital — a growing contributor to margins

AiR Digital, Pan-United’s technology arm, is becoming an increasingly important part of its business. The platform helps construction players digitalise operations, optimise truck routes, reduce waste and boost productivity. 

It is already being used by companies in Singapore, Malaysia, Vietnam and New Zealand.

While digital revenue is still relatively small, it carries significantly higher margins and is growing quickly as more companies adopt digital tools. 

As AiR Digital scales further, it is expected to play a bigger role in lifting PanU’s margins over the medium term.

The long-term vision is for AiR Digital to develop into a broader ecosystem for the construction and logistics sector. 

This would include aggregates, precast, cement hauling and fleet management. The platform’s SaaS model also provides recurring revenue and helps reduce exposure to raw-material price swings.

Medium-term roadmap: technology, sustainability, regional growth and disciplined capital allocation

Pan-United’s strategic roadmap resembles the multi-pillar transformation pursued by leading industrials.

The first pillar centres on advancing low-carbon and specialty concrete technologies. PanU continues to expand its suite of green products, supported by R&D collaborations with global technology partners.

The second pillar is digitalisation. AiR Digital will scale to new geographies and industries, supported by cloud infrastructure, automation, and expanding software capabilities.

The third pillar focuses on regional expansion. PanU aims to replicate its Singapore success model in high-growth ASEAN markets, particularly Malaysia and Vietnam, where urbanisation and infrastructure investment continue to accelerate.

The fourth pillar emphasises disciplined capital allocation and ESG leadership. PanU maintains a strong net-cash balance sheet, invests strategically in technology and plant upgrades, and aligns sustainability metrics with long-term value creation.

Together, these pillars support rising margins, stronger cash flows, and long-term ROE improvement.

Initiate with Buy

We initiate coverage on Pan-United with a BUY rating. 

The company’s strong market position, solid balance sheet, and multi-year earnings visibility make it an attractive way to gain exposure to Singapore’s construction cycle.

The growing adoption of low-carbon concrete and the expansion of AiR Digital add further growth engines beyond the traditional materials business. 

With clear catalysts, improving free-cash-flow potential and rising dividends, we believe PanU is well positioned for the next phase of its growth.

Target price of S$1.26

Our discounted cash flow (DCF) valuation yields a fair value of S$1.26 per share for Pan-United, implying 16.7% upside from the current market price of S$1.05. 

The valuation is based on a 10.3% WACC, incorporating a cost of equity of 10.7% (beta of 1.1, risk-free rate of 3.5% and market return of 10.0%) and a cost of debt of 4.0%, assuming a conservative 5% debt ratio and a 20% tax rate. 

At S$1.26, this would imply 19.1x 2026 P/E and 2.8% forward dividend yield. 

Key risks include construction-sector cyclicality, exposure to raw-material and energy cost inflation, competition from regional RMC suppliers, delays in major public projects, and slower-than-expected adoption of PanU’s digital solutions.

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