EFOODS_And the struggle continues
EFOODS 3QCY17 results were surprising with the company posting profit of PkR200mn, recovering from a loss of PkR145mn in 2QCY17. This sequential improvement was reflective of: 1) 92bps uptick in GM on account of the price increment made in Jun'17 (PkR10/ltr increase for Olpers) alongwith seasonal high margin ice-cream sales and 2) discipline on the expense side (distribution costs were down 26%QoQ). That said, fundamental outlook otherwise remains bleak as the company continues to struggle on multiple key fronts (persistent revenue shrinkage and increasing cost side pressures). To this end, continuously rising international milk powder prices (+30%YoY in 10MCY17), stiffening up of competition (both in the whole milk and tea whitener space) amid increasing price differential between packaged and loose milk can continue exerting pressure. As a result, we expect the company to round off CY17F earnings at PkR573mn (EPS: PkR0.79) against PkR2.3bn (EPS: PkR3.12) in CY16. While operating environment remains challenging, product initiations under the new management remain the only bright spot, however nothing in this regard has been put forward yet. At current price level, the stock trades at unjustifiably high multiples (forward PE/PS at 68.2x/1.72x) vindicating our Reduce stance.
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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