EFOODS: Lacking growth triggers
​Having lost 41%CYTD, EFOODS dismal price performance is reflective of wary investor confidence. Fundamental weakness has gained prominence where apart from continuous volumetric regression; the recent recovery in international milk prices is an added pressure. In this regard, FAO dairy index is up 8.7%YoY since Jan'17 bringing CYTD average to 193.7 points (highest since 2015). This holds negative implication for the company's margin profile which is already under stress from the stiffening competition in the dairy space. Incorporating higher input costs, our EPS estimates for CY17F/CY18F now stand at PkR2.55/3.05 (revised down by 18%/17%), dragging our TP down to PkR138.7/sh (previously at PkR162.1/sh). Going forward, while expecting the new management to prioritize product enhancement, the period in transition is likely to witness slower earnings growth (5yr forward earnings CAGR of 9%) especially with pressure on volumes intact. That said, plans to diversify/extend current product lines are factors that can turn us bullish on the stock. .
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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