Pan United

Pan United: Sias notes the continued spectacular performance in 3Q12, with revenue and net profit rising 35% and 33% yoy to $185m and $11.6m, respectively. Says the results were backed by higher contributions from all three segments and expects the momentum to sustain into 4Q. i) For the basic building materials (BBM) division, it enjoyed both higher sales volume and ASP this quarter, on the back of continued demand for concrete in key projects, amid a compulsory 5% non-traditional sand sourcing regulation. ii) The port division revenue rose 14% on the back of 15% increase in general cargo volume. The rise in logs, paper and pulp pdts more than offset the decline in steel volume. iii) the shipping division is nearing breakeven level following the reduction in fleet size and higher utilization rate with more resource trading activities. With the non-traditional sourcing quota in place and moves to explore coal mining activities in Indonesia, the usage of its vessels is likely to improve further. Going forward, Sias notes the BBM division will benefit from the construction of the Thomson Line while the port will have new contracts and possible positive devts after the power transition in China. Adds the shipping division is also expected to turnaround in FY13. Keeps the stock at Buy with TP $0.74.