Autos: July numbers a blessed dawn for the Auto OEMs
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July'17 total automotive industry sales grew to 20,369 units (+25.9%MoM/+17.9%YoY) making sure 7MCY17 total industry offtake gallops to 140,703 units (+13%YoY). Major constituents of total industry sales moved +19.8%/+12.1%/+8.2%/+15.2%YoY for Passenger Cars/LCV & Pick-ups/Trucks/Tractors while buses lagged (-12.6%YoY). Cumulative 7MCY17 total industry sales grew 13%YoY with LCV & Pickups/Trucks/Passenger car segments contributed +15.4/24.3+/+12.3%YoY. Over the period 1000CC/1300cc plus segment grew +45.6/+8.0%YoY and the 800cc and below inched up by +3.0%YoY lacking a new model jump witnessed in the other segments. On the production front, OEMs cemented their capacity factors over 7MCY17 with PSMC/INDU/HCAR producing at 67/112/83% of annual double shift capacity (vs. 64/119/55% during 7MCY16). Citing catalysts for strong demand growth and mechanisms for controlling costs (particularly from FX swings) we continue to advocate building positions in INDU. We have an FCFE based TP of PkR2,068/sh, where the stock trades at FY18/19F P/E of 9.85/9.48x, accompanied by FY18/19F D/Y 6/6%.
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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