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Wednesday, February 25, 2015

A right decision to sell Pan United


I bought Pan united on the 1 Oct 12 and sold it on 16 May 14. Initially, i see this company as a dominant supplier of basic building materials in Singapore, coupled with huge government initiatives to upgrade infrastructure and build public housing.

However, the company acquired Changshu Changjiang International Port (CCIP) for RMB436.5m in Feb 14. The news was bad in my perspective because port facilities will incur more expenses to maintain.

I like its supply of basic building materials business in Singapore, but do not like that fact that it is acquiring a port and not focusing on its profitable business. With so much assets to handle, this company may not be able to concentrate on what's most profitable to itself as well as to shareholders.

The image below is taken from SGX website show a review of its FY2014 performance indicating that CCIP was part of an increase in interest costs and depreciation expenses.





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