Pan-United Corp, which is a concrete manufacturer and is Singapore’s biggest producer of ready-mixed concrete, has been buying back shares steadily since it reported its FY2021 earnings late last month. The most recent buying was made on March 16, when 500,000 shares were acquired at 34.9 cents each.
This brings Pan-United’s cumulative buyback to around 4.1 million shares under the current mandate. Prior buybacks were made on Feb 25, with the acquisition of 165,000 shares at 34.9 cents each and on March 9 and 10 for 120,000 shares and 350,000 shares at 35 cents each respectively. The company bought again on March 14, acquiring 240,000 shares at 34.7 cents each.
On Feb 22, Pan-United reported revenue of $586.9 million for FY2021 ended Dec 31, 2021, up 45% from $405 million in FY2020. This was in line with a pick-up in construction activities. During the year, the company saw higher material costs but managed to cut down financial expenses because of better cash flows. As such, Pan-United saw earnings grow 17 times to FY2021’s $18.7 million from FY2020’s $1.04 million.
Pan-United plans to pay a final dividend of 1.1 cents, which, with the interim dividend of 0.5 cent already paid out, will bring total dividends paid in FY2021 to 1.6 cents — double the 0.8 cent paid for the whole of FY2020. As at Dec 31, 2021, Pan-United’s net asset value was 29.3 cents, slightly higher than 27.7 cents as at Dec 31, 2020.
In its earnings commentary, Pan-United says this year’s demand is likely to be “comparable” to 2021’s, thanks to a pick up in commercial projects. Public sector projects are expected to remain stable too. “Nevertheless, the operating environment of the Singapore construction sector is expected to remain challenging with the ongoing manpower constraints, along with higher raw material costs as well as volatile freight costs and energy prices,” the company adds.
V-shaped recovery
Luxury watch retailer The Hour Glass, which is enjoying steady earnings growth, has continued with its series of share buybacks. On March 15, the company had acquired 114,500 shares for $2.04 each. This brings the cumulative total bought under the current mandate to 13.8 million, equivalent to 1.98% of the company’s issued share base. Earlier in the month, the company had bought back shares on an almost daily basis.
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On March 15, DBS Group Research’s Paul Yong initiated coverage on The Hour Glass with a “buy” call and $2.62 target price. Thanks to the V-shaped recovery seen by the luxury goods market, Yong expects the company to report record earnings for FY2022 ending March 31, 2022.
On Nov 12, the company reported strong growth for its 1HFY2022 ended Sept 2021 results. Earnings more than doubled to $62.6 million from $29.7 million while revenue rose 63% y-o-y to $472.4 million.
“We believe this is supported by the bullish stock market in 2021, which drove consumer sentiment, and the shift in domestic spending from travel towards luxury goods. We anticipate this trend to continue in 2HFY2022 on the back of seasonal demand and as consumption of luxury goods stays firm,” writes Yong.
The Hour Glass operates 53 boutiques across various Asian markets and Yong sees it opening six more boutiques across the region “over the longer term”. With its bigger presence, earnings are projected by Yong to grow 12% by FY2025.
However, Yong warns that FY2023 will see a possible “moderation” because of the current market volatility but “frontloading of spending ahead of GST hikes could lend some support”. And of course, the longer-term uptrend is expected to remain intact, thanks to the growing number of wealthy individuals in Asia.
