EFERT & FATIMA_4QCY17 Earnings Preview
EFERT: 4QCY17 Earnings Preview
EFERT is scheduled to announce its 4QCY17 financial results on Thursday (Feb 08'18) where we expect EFERT's earnings to clock in at PkR3.49bn (EPS: PkR2.62) against PkR3.34bn (EPS: PkR2.52) - up 4%YoY. This increase in earnings is expected on the back of: 1) 3.4pptsYoY improvement in GMs to 32.5% (includes subsidy) on account of higher urea prices (reduction in discounts offering as urea inventory normalizes amid higher int’l prices). On a cumulative basis, we expect CY17F earnings to stand at PkR10.19bn (EPS: PkR7.63) compared to PkR9.03bn (EPS: PkR6.76) in CY16 (up 13%YoY) on the back of impressive growth in Urea/DAP offtake (up 9%/2%YoY to 1.80mn/532k tons and recent recovery in local product prices. Alongwith the result, we also expect a final cash dividend of PkR2.00/sh taking CY17 total payout to PkR7.50/sh (payout ratio: 98%). Having gained 26%FYTD, the stock currently trades at a forward P/E of 8.2x where our Dec'18 TP of PkR69.9/sh offers an upside of 13% from current price level. ACCUMULATE!
FATIMA: 4QCY17 Earnings Preview
FATIMA is expected to announce earnings for 4QCY17 later this month, where we expect the company to post unconsolidated NPAT of PkR3.34bn (EPS: PkR1.59) vs. NPAT of PkR3.41bn (EPS: PkR1.62) in 4QCY16, down 2%YoY/up 40%QoQ. Expected key highlights of 4QCY17 result includes: 1) 4%YoY increase in topline to PkR11.24bn reflecting 17%/8%/-29%YoY movement in NP/CAN/Urea off-take to ~147k/134k/118k tons and 2) 46bpsYoY decline in GM to 55% in 4QCY17 on account of higher discounts offered during the period. On a cumulative basis, we expect CY17F earnings to stand at PkR10.01bn (EPS: PkR4.77) compared to PkR9.78bn (EPS: PkR4.66) in CY16, up 2%YoY. Alongwith the result, we also expect a final cash dividend of PkR2.50/sh (payout ratio: 53%). Having lost 5%FYTD, the stock currently trades at a CY17F PE of 6.3x where our Dec'18 TP of PkR45.11/sh offers an upside of 40% from current price level. BUY!
Engro Fertilizers Limited is a Pakistan-based company, which is engaged in manufacturing, purchasing and marketing of fertilizers. The Company's brands include Engro Urea, Engro NP, Engro DAP, Zingro, Engro MOP, Engro SSP and Engro Zarkhez. Engro NP is the Company's fertilizer brand with Nitrogen and Phosphorous content in equal quantity. Engro DAP primarily contains Di-Ammonium Phosphate, and is imported by Engro EXIMP and marketed by the Company. Engro DAP is marketed in approximately 50 kilogram bags. Zingro is a micronutrient fertilizer, and is imported by Engro EXIMP and marketed by the Company. Engro Zarkhez has Nitrogen, Phosphorous and Potassium, and is primarily offered for sugar cane, fruit orchards, vegetables, potato and tobacco farming. Engro Envy is primarily offered to urban market for gardens, lawns, flower beds, fruit plants and ornamental plants. The Company is a subsidiary of Engro Corporation.
Fatima Fertilizer Company Limited is a Pakistan-based fertilizer manufacturing company. The Company is engaged in manufacturing and marketing of Nitrogen, Phosphate and Potash fertilizers. It produces a range of fertilizers, including Sarsabz Calcium Ammonium Nitrate (CAN), Sarsabz Nitro Phosphate (NP), Nitrogen Phosphorous Potassium (NPK) and Sarsabz Urea. Its CAN is a granulated nitrogenous fertilizer. Sarsabz Urea can be applied in various forms and it can be spread in bulk alone or can also be mixed with other fertilizers before application. Its NP can be applied on various types of soils. The Company has a production base for Nitric Acid. The Company has annual production capacity of Urea 500,000, CAN 420,000, NP 244,000, Nitric Acid 500,000 and Ammonia 500,000. It also offers services and support to farmers from education on farming practices and research oriented agricultural practices.
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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