HUBC: New faces to be revealed, (AKD Daily, Jul 07, 2017)
​In the latest development, HUBC may witness the exit of Dawood Hercules (DAWH) as its major sponsor offloading 14.91% holding (~172.53mn shares) in the company as per the bourse filing dated Jun 30'17. While the transaction is unlikely to materially impact operations, we highlight the fact that the transfer of ownership would also lead to a reconstituted Board, all the while HUBC finds itself in the midst of major operational developments (financial close on expansion expected by 1QFY18). Additionally, the heightened likelihood of PkR depreciation against the US$ would trickle down to the company's earnings, where we have already incorporated a 4% weakening of PkR for FY18. Furthermore, observing the current price level, we believe investors have heavily discounted the growth prospects of the company on increasing political noise matched by a status quo on the circular debt front. With fundamentals remaining intact, we stick to our DDM and SOTP based TP of PKR142.7/sh (incorporating CPHGCL), offering a 21.0% return, in addition to FY17/18F D/Y of 7.6/8.3%, BUY!
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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