EFOODS_GM recovery seems unsustainable
EFOODS 1QCY18 results were surprising especially on the GM level with the company recording GM at 21.2% - the highest since 3QCY16. This improvement is noteworthy coming at a time when international dairy prices are continuously rising however; lower local farm gate prices in the flush season seem to have come to help alongwith price increase in 2HCY17, in our view. That said, fundamental outlook otherwise remains bleak with revenues continuing to decline, going down by 19%YoY/3%QoQ to PkR7.14bn in 1QCY18. To this end, stiffening up of competition (both in the whole milk and tea whitener space) amid significant price differential between packaged and loose milk continued to exert pressure, limiting our optimism. The market has reflected the same with the stock price losing 9.4% since the result announcement. Until possible product initiations come through, we expect pressure on the revenue front to remain despite clear efforts w.r.t reimaging of Tarang being made. Earnings are expected to recover after bottoming out in CY17 however is still likely to remain subpar (CY18F EPS: PkR1.72). Until noticeable fundamental improvements particularly w.r.t product innovations and visible efforts on market recapturing come through, we continue to remain skeptical on the company's growth potential
FrieslandCampina Engro Pakistan Ltd Formerly known as Engro Foods Ltd. FrieslandCampina Engro Pakistan Limited, formerly Engro Foods Limited, is a Pakistan based company engaged in the manufacturing, processing and marketing of dairy products, fruit drinks and frozen desserts. The Company also owns and operates a dairy farm. The Company's segments include Dairy and beverages; Ice cream and frozen dessert, dairy farm and Others. The Company's brands include Olper's, Olper's Lite, Omore, Dairy Omung, Olper's Lassi and Tarang. The Company offers frozen desserts in cups, sticks, cones and family packs. The Company's exports portfolio consists of branded products, anhydrous milk fat (AMF) and unsalted butter. Its branded products include milk, beverages, tea whitener and others. The Company offers olper's full cream milk, olper's lite, olper's cream, olper's tarrka and olper's dobala. Olper's Lite is a low-fat, hi-calcium milk. The Company has operations in countries, such as Mozambique, Sri Lanka, Singapore, Guinea, Libya and the United Arab Emirates.
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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