Pan United

Pan United: Phillip visited Changshu Xinghua Port (CXP), Pan United’s jewel of an asset that generates >40% EBITDA margins and has capacity breakeven utilization rate of 30%. Besides CXP’s natural advantages in terms of its location, depth and size, mgt is positioning CXP to be a “comfortable port” to enhance customer stickiness by being a one-stop service of stevedoring, and providing a full-range of logistics services and having access to all the requisite govt bureaus. Growth at CXP includes expansion of its warehousing business and diversifying into a 5th cargo unit. Phillip maintains its Accumulate rating with TP $1.27. At the current $0.975, Pan United trades at an attractive 11x FY13e P/E and 4.5% forecast yield.