ENGRO_2QCY18 earnings to remain strong
ENGRO is scheduled to announce its 2QCY18 earnings tomorrow (Aug 16'18) where we expect the company's consolidated earnings to clock in at PkR3.88bn (EPS: PkR7.42), up 4.1xYoY. The growth comes amid: 1) impressive earnings performance by its subsidiaries (EPCL/EFERT/EPQL posted bottom-line growth of 6.7x/31%/5%YoY), and 2) low base effect of 2QCY17 results owing to abnormal effective tax rate of 64% (imposition of super tax on inflated CY16 earnings). Along with the result, we also expect an interim cash dividend of PkR10/sh. (+100%YoY) taking 1HCY18 total payout to PkR15/sh (+25%YoY). On a cumulative basis, we expect ENGRO 1HCY18 consolidated earnings to rest at PkR8.01bn (EPS: PkR15.43), translating into a earnings growth of 2.1xYoY. With questions still abound with regards to cash utilization prospects for ENGRO (current PkR65bn or PkR124/sh), recent run-up in ENGRO's prices (up 26%CYTD) has resulted in a downgrade of our stance to Neutral with our SOTP based Jun'19 TP standing at 348.8/sh.
EnGro Corp is an investment holding company. Co. is engaged in the manufacturing and selling of cement. Through its subsidiaries and associates, Co. is also engaged in the marketing and distribution of office automation products; manufacturing and sale of vermiculite; provision of liaison and coordination services to related companies; investment trading; retrofitting and restoration works to buildings and construction; and manufacture and sale of readymixed concrete.
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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