Brokers' take

Pan-United Corp | Overweight

Target price: S$0.70

Oct 5 close: S$0.61

NRA Capital, Oct 5

PAN-UNITED announced on Oct 4 the divestment of its 100 per cent owned tug and barge business to its controlling shareholders for S$29.92 million in cash. The two sale companies incurred net losses of S$4.1 million for H1 2016 and have an aggregate desktop valuation of S$23.8 million, versus a book value of S$29.92 million as at Sept 30.

Hence, the divestment will save Pan-United on future impairment costs at the end of the year, and raise Pan-United's operating profitability going forward. . . The key risk at this juncture is if the profitability of the basic building resources or cement and co…