Report
EUR 8.70 For Business Accounts Only

ENGRO_More opportunity than meets the eye, (AKD Daily, Dec 11, 2017)

In the backdrop of recent weakness in stock price (-18%CYTD), we reiterate our liking for ENGRO with our rolled forward Dec'18 TP of PkR348.8/sh (upside: 34%). Our recommendation for the conglomerate is underpinned on all-round improvements in the form of: 1) recovery in fertilizer business (EFERT earnings up 18%YoY for 9MCY17), 2) impressive turnaround in polymer business (EPCL earnings up 61.1xYoY in 9MCY17), 3) higher utilization for its Elengy and Vopak business lines and 4) smooth progress at its flagship Thar coal mining & power project (currently 4 months ahead of schedule and expected to reach COD by Jun'19). In addition to value enhancements prospects through ongoing operations, there has been some clarity on utilization of its cash rich balance sheet (cash & cash equivalent of PkR62bn) in the shape of: 1) investment in 450MW RLNG based Power Plant at Port Qasim and (pending tariff approval from NEPRA) and 2) intentions to setup a second LNG terminal. Recent price correction due to relegation from MSCI Global EM index to the small cap EM index offers attractive entry points, considering fundamental growth remains intact (4yr forward earnings CAGR of 44%).

Underlying
EnGro Corp. Ltd.

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.

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.

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