A visit to the Innovation & Command Centre
? We visited PanU’s Innovation & Command Centre on 5 Apr 2022 and were
impressed by its strong R&D drive, tech adoption and sustainability efforts.
? Aside from its diverse portfolio of over 300 specialised green products, we
think PanU CarbonCure can potentially be offered as a carbon offset solution.
? PanU’s intelligent logistics platform AiR enables greater operational efficiency
through enhanced automation of fleet and supply chain. Reiterate Add.
Blending sustainability and tech into the construction sector
Backed by a strong R&D team, PanU has developed over 300 highly specialised lowcarbon footprint concrete solutions for built environment needs, of which over 150
products were nationally certified as green products. Noteworthy products include PanU
Shield (offers radiation protection), PanU Watercrete (for underwater casting), and PanU
SCC (self-compacting concrete). We were introduced to a wide range of recycled
materials (ground granulated blast furnace slag, washed copper slag, fly ash etc.) that
PanU integrated into its production processes to lower carbon footprint; as well as
scientific apparatus (e.g. petrographic tests) used to ensure product quality and
consistency. More innovative products are in the pipeline to cater to future needs, and we
believe that PanU is well-positioned to maintain its market leadership in Singapore.
PanU CarbonCure concrete: A potential carbon offset solution
We were especially excited about its flagship sustainability product, PanU CarbonCure
concrete. This involves carbon capture and utilisation (CCU) technology that injects
mineralised carbon dioxide into wet concrete during mixing to reduce embodied carbon
emissions (up to 20kg of CO2 for each cubic metre of concrete), while enhancing
compressive strength of the product. PanU CarbonCure is currently the first and only
CO2 mineralised concrete to be inducted into the new product category of ready-mix
concrete (CCU) under the Singapore Green Building Product (SGBP) certification
scheme. In the longer term, we think PanU CarbonCure can also potentially be offered as
a carbon offset solution, in line with Singapore’s push towards net-zero.
Optimising operations through Big Data and AI
We also visited the Command Centre, which handles centralised operations for its 30
batching plants spread out across Singapore. The Command Centre is supported by the
group’s in-house intelligent logistics optimisation platform AiR, which enables greater
operational efficiency through enhanced automation of fleet and supply chain
management. Through big data analytics, assignment decision is made to push order
production to the most cost-efficient plant, while trucks are guided to and fro from various
batching plants and job sites dynamically 24/7. PanU is exploring monetisation of this
SaaS platform to regional players to drive recurring income. We reiterate our Add call
with a TP of S$0.56, based on 6.6x FY23F EV/EBITDA which is a 10% discount to peers
in view of PanU’s smaller market cap. Downside risks: margin pressure due to inability to
pass on higher input costs and a slowdown in construction demand.