Pakistan OMC's_Retail throughput stumbles as OMCs retrench, (AKD Daily, Oct 08, 2019)
- Weakness in volumes understandably flowed through to throughput levels, with 3QFY19 at 558k tons down 9%QoQ where the decline in HSD throughput was more severe owing to influx of grey product and standing at 234k tons, down 17%YoY, while MS provided some cushion, declining only 3%YoY
- Company-wise, HASCOL/SHEL/APL/PSO delivered throughput levels of 383k/606k/607k/528k ltrs/outlet, moving -14%/-4%/-8%/-3%QoQ and -65%/+5%/-17%/+8%YoY taking total average industry throughput -7%QoQ/-6%YoY to 531K lts/outlet, a sign of depleted volumes in the retail space and OMCs banking on expansive retail presence to retrench market shares
- Sectoral demand figures indicate the hastening of an FO-lite downstream demand re-orientation (furthered by slowing retail outlet expansions), as transport-linked demand formed 99.7/89.3% of the total volumes of MS/HSD for Jun'19, coinciding with the competitive landscape cooling down, allowing larger OMCs to hold market share
- Grey product influx remain unescapable, where the widening deviation between HSD/MOGAS throughput levels (at 91k ltrs vs 54k ltrs in 3QCY18, widest we have observed yet), is likely to persist in an environment of high pump prices
- With margins sagging under higher pump prices and outlet additions depleting mean throughput, slowing retail outlet additions are expected to prevail over the medium term, with OMCs focusing on pulling customers (through discounts, forecourt retail upgrades), in our view. In this backdrop, slow and steady APL appears well entrenched to hold back competition, underpinning our BUY call on the stock (TP of PkR480/sh)
Hascol Petroleum Limited is a Pakistan-based company, which is engaged in procurement, storage and marketing of petroleum and related products. The Company is involved in the sale of petroleum products, such as fuel oil, high speed diesel, gasoline, Jet A-1, liquefied petroleum gas (LPG) and lubricants. The Company offers products, such as Tiger Super, Rocket Diesel and Furnace Oil. The Company offers Fuchs Lubricants products, which include corrosion preventives, quenching oils, industrial lubricants, open gear lubricants, greases, automotive oil and metal working fluids. The Company also markets LPG as an automotive fuel through its retail network. The Company is engaged in owning, leasing and renting oil storage facilities, as well as importing petroleum products. The Company has storage facilities at Machike, Shikarpur and Daulatpur. The Company sells its product to dealers, government agencies and autonomous bodies, independent power project and other corporate customers.
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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