GTYR_Analyst briefing takeaways, (AKD Daily, Nov 19,2021)
AKD Daily
GTYR: Analyst briefing takeaways
- The General Tyre and Rubber company (GTYR) held its analyst briefing session yesterday to discuss its 1QFY22 results. To recall, the company posted NPAT of PkR131mn (EPS: PkR1.07) as compared to PkR126mn (PkR1.03) in same period last year, up 4%YoY and loss of PkR64mn (LPS: PkR0.52) in previous quarter.
- The gross margin of GTYR has significantly improved in 1QFY22 (GMs: 13% in 1QFY22 vs 7% in 4QFY21) due to the laggard impact of cost pass-on to the OEMs.
- With global commodities well into the bull cycle, we expect the cost side pressures to remain intact at least in the upcoming quarter. The weighted average index, constructed by JP Morgan to track the cost of tires, has swelled ~11%QoQ. With majority of the raw material imported, the local manufacturing costs have followed the suit.
- After incorporating the price hikes, we can expect the topline to swell by 45-50%YoY in FY22 and earnings to increase 18%YoY to ~PkR670mn (EPS: PkR5.55). Even after declining 35%FYTD, we believe that the stock is fairly valued as it is currently trading at a P/E of 9.7x.
AKD Research
General Tyre & Rubber Co. of Pakistan is engaged in the manufacture and sale of rubber tires and tubes, including tires for vans, pick-ups, four wheel drive vehicles, tractors, race cars, light trucks, buses, heavy trucks, minibuses, and other vehicles. Co.'s products are exported to the United Kingdom and sold in Pakistan to new vehicle manufacturers and businesses engaged in vehicle tire related services.
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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