ASTL: Towering to diversify business
Diversifying into tower manufacturing business, ASTL plans on setting up a joint venture with the Chinese company "Qingdao Huijintong Power Equipment Company Ltd (HJT)". The proposed venture (Amreli-Huijintong pvt Ltd) would include the production and sale of transmission towers, where ASTL is expected to take 65% equity stake, entailing total investment amount of ~PkR1.67bn. Our preliminary research indicates that the proposed project would take at least 1-1.5years to come online. With cost plus pricing model, tower manufacturing industry offers superior margins compared to the re-bars manufacturers (see table IV). In the backdrop of new generation capacity coming online coupled with inadequate existing T&D network, we expect the gov't to shift focus towards T&D segment, generating additional demand for towers. Analyzing the same, our sensitivity analysis using varying capacity and margin levels reveals incremental operating income from the new venture in the range of PkR186-296mn (see table II). On the flipside, concentrated customer base (i.e. NTDC, KEL, FTCL & STDCPL in Pakistan case) and delayed materialization of mega projects present business and liquidity risk.
Amreli Steels Limited is a Pakistan-based steel manufacturing company. The Company is engaged in the manufacture and sale of steel bars and billets. The Company offers a range of steel bars for all construction needs.
AKD Securities Ltd. is one of the leading securities firm in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. AKD Securities accounts for more than 6% of the average daily value of the Karachi Stock Exchange. AKD Securities was the first brokerage house to launch an online trading platform in Pakistan in November 2002 and now has the largest market share with over 6000 customers. This has helped diversify and expand the retail investor base in the country and ushered in a whole new universe of investors to the stock market.
AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
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