ASTL: Dhabeji project starts paying back
Previewing FY18 result, we expect ASTL to report NPAT of PkR1,576mn (EPS: PkR5.31) compared to NPAT of PkR1,074mn (EPS: PkR3.62) in full year FY17, up 47%YoY. The anticipated earnings growth is a function of i) 25%YoY topline growth that comes both from higher volumes (+14%YoY) and price hike (+17%YoY) and ii) margin accretion (+104bpsYoY) on the back of elevated primary margin (pricing spread between rebar-scrap prices). On a quarterly basis, we expect the company to post net earnings of PkR579mn (EPS: PkR1.95) in 4QFY18 vs. PkR255mn (EPS: PkR0.86) in 4QFY17, up 2.27xYoY. Additional units from the new Dhabeji line, higher retention price and lower effective tax rate (ETR: 18% in 4QFY18 vs. 44% in 4QFY17) are key contributors to the elevated bottom-line. Accompanying results, the company is also expected to announce a cash dividend of PkR2.25/sh. Gaining 3.8%FYTD, ASTL trades at an attractive FY19F P/E of 6.6x. We currently have a Buy stance on ASTL, where our liking for the scrip stems from its strong earnings credentials (4yr forward earnings CAGR of 18%).
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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