Report
EUR 8.70 For Business Accounts Only

Autos_Feb’18 numbers keep the music playing

Selling 23,433 units for the month, total industry sales for Feb'18 stood -4.4%MoM in the shortest month of the year, where the +14.8%YoY number stands as a proof of robust demand prevailing for domestic OEMs. The share of passenger cars stood above 19K consecutively for the second month with sales clocking in 19,027 for the month (-4.5%MoM/+11.1%YoY). While Tractors showed an unexpected, off-season hike, posting 6,454 units (+10.1%MoM/14.3%YoY), LCVs sales remained resilient with 3,627 units (-0.3%MoM/+41.3%YoY). Looking at the segment-wise sales, we notice that the 1000CC and below segment maintains strong demand with sales rising +24.9%/+27.5%YoY for 1000cc/800 & below segment. On a cumulative basis, the 8MFY18 industry sales amounted to 176,632 units vs. 159,378 units for SPLY (+10.8%YoY). Chief source of incremental growth on cumulative sales was seen in the LCVs space where sales climbed 41.9%YoY for 8MFY18 to 27,970 units. Riding the wave of wider LCV sales growth in a rather thinly crowded segment (which could get crowded further as new entrant's eye this segment), PSMC emerged as the strongest contender. Backed by the same, cumulative Ravi & Bolan variants amassed sales of ~29k units during 8MFY18 resting above 27,377 units sold during 8MFY16, the peak of the Rozgar sales period. In this sturdy backdrop for strong demand led earnings and improved dividend yield due to statutory restrictions for PSMC, our TP of PkR691.51/sh offers an upside of 39.65% from current price levels.

Underlyings
Honda Atlas Cars (Pakistan) Ltd.

Honda Atlas Cars (Pakistan) Limited. Honda Atlas Cars (Pakistan) Limited is engaged in assembling and progressive manufacturing and sale of Honda vehicles and spare parts. The Company's segments include Manufacturing and Trading. The Company's Manufacturing segment relates to the sale of locally manufactured cars and parts. The Trading segment relates to the trading of completely built units (CBUs) and parts. The Company's factory is located at Multan Road, Manga Mandi, Lahore. The Company offers car models, such as Honda Accord, Honda CR-V, Honda CR-Z, Honda HR-V, Honda Civic (over four models), Honda City Aspire (over four models) and Honda City (over four models) in various colors with a range of technology features. The Company's cars are available in colors, including crystal black pearl, bold beige, taffeta white, urban titanium, modern steel metallic, habenaro red, alabaster silver metallic, camelian red pearl and white orchid pearl. The Company is a subsidiary of Honda Motor Co., Ltd., Japan.

Industrial Motor Co.

Indus Motor is engaged in the assembly, progressive manufacture, import and marketing of Toyota motor vehicles. Co. is also the sole distributor of Toyota and Daihatsu vehicles in Pakistan.

Pak Suzuki Motor Co. Ltd.

Pak Suzuki Motor is engaged in assembling, progressive manufacturing and marketing of Suzuki cars, pickups, vans, and 4X4 vehicles. Co.'s product models include Baleno, Margalla, Mehran, Kyber, Ravi Pickup, Bolan Van and Potohar Jeep.

Provider
AKD Securities Limited
AKD Securities Limited

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.

Other Reports on these Companies
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