EPCL_UBL & BAHL_9MCY21E Result Previews, (AKD Daily, Oct 15, 2021)
AKD Daily
EPCL_UBL & BAHL_9MCY21E Result Previews,
EPCL to post 3QCY21 EPS of PkR3.38: Engro Polymer & Chemicals Ltd (EPCL) is slated to announce its 9MCY21 result (15th Oct’21), where we expect the company to post 3QCY21 NPAT of PkR3.1bn (EPS: PkR3.38), as compared to PkR1.88bn (EPS: PkR2.07) in the same period last year. This will take 9MCY21 NPAT to PkR10.34bn (EPS: PkR11.37) vs. PkR2.1bn (EPS: PkR2.31) in 9MCY20. The expected earnings for the quarter primarily emanates from higher offtakes (+14%QoQ) due to robust construction demand. In our estimates, we have assumed PVC sales of 50K MT for 3QCY21, while VCM debottlenecking enabled EPCL to further unlock its PVC production capacity (PVC capacity increased to 295K tons per annum in 1QCY21). PVC ethylene margins for 3QCY21 average at US$850/MT, down 14%QoQ. However, incorporating freight cost in our estimates, PVC ethylene margins for 3QCY21 average at US$900/MT. Therefore, our gross margins remains flat QoQ in 3QCY21.
UBL earnings likely to clock in at PkR18.1/sh in 9MCY21: United Bank Limited (UBL) is scheduled to announce its 9MCY21 results today where the bank is expected to post an earnings of PkR22.3bn (EPS: PkR18.1) compared to PkR15.4bn (EPS: PkR12.8) in the same period last year. On a quarterly basis, 3QCY21 earnings stood at PkR5.9/sh (down 3.2%QoQ but +55.1%YoY) where normalization in capital gains (3QCY21E: 710mn vs. 2QCY21A: PkR1.8bn) stood as the primary reason for sequential downtick. Moreover, the bank could record higher provisioning expense in the current quarter owing to NPL buildup in US$ terms in the overseas’ loan book in the previous quarter. Together with result, the bank is expected to announce a dividend of PkR3.5/sh – taking cue from historical trends in dividend payouts – translating into 9MCY21 cumulative dividend of PkR11.5/sh.
BAHL expected to post earnings of PkR3.7/sh in 3QCY21: Bank ALHabib Limited (BAHL) is expected to report an earnings of PkR13.2bn (EPS: PkR11.9) in 9MCY21 – flat compared to same period last year. 3QCY21 earnings stood at PkR3.7/sh, down 7.3%QoQ/31.2%YoY where sequential decline is attributable to seasonal increase in administrative costs (+10.0%QoQ/24.7%YoY). Also, we have built in higher provisioning expense (3QCY21E: PkR553mn vs. 2QCY21A: 274mn) owing to bank’s relatively higher exposure to wholesale/retail operators that have realized tighter regulations (cash margin, end product prices etc.) over their operations. Net Interest Income is likely to remain flat on a sequential basis (+1.9%QoQ) where positive overtures from balance sheet volumetric growth is offset by slight decrease in margins with management aiming to meet minimum financing thresholds. Resultantly, we have assumed effective tax rate for the quarter at 39.0%.
AKD Research
Bank AL Habib Limited is a banking company. The Bank operates through Retail banking, Commercial banking, Retail brokerage and geographical segments. Its Retail banking consists of retail lending, deposits and banking services to private individuals and small businesses. The retail banking activities include provision of banking and other financial services, such as current and savings accounts, and credit cards to individual customers, and small and medium enterprises (SMEs). Its Commercial banking represents provision of banking services, including treasury and international trade-related activities to corporate customers, multinational companies, and government and semi government departments and institutions. Its Retail brokerage activities include the business of equity, money market and foreign exchange brokerage, equity research, and corporate financial advisory and consultancy services. It operates in four geographic regions: Pakistan, the Middle East, Asia Pacific and Africa.
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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