HUBC_1HFY24 Analyst Briefing takeaways ,(AKD Off the Analyst's Desk Feb 20, 2024)
HUBC_1HFY24 Analyst Briefing takeaways
Hub Power Company Limited (HUBC) held its analyst briefing earlier today, where-in the management discussed the following:
- Company’s JV i.e. CPHGC disbursed its first dividend of US$70mn in Nov’23, with HUBC receiving US$32mn (HUBC shareholding: 46%).
- Management expects to pay down debt incurred for Thar Energy/Thal Nova projects through future dividends from CPHGC and aims to meet the respective milestones outlined in the financing documents on schedule as well.
- With regards to future growth strategy, company remains steadfast in expanding its generation from renewable sources (wind and solar). Currently, three projects remain prequalified: KE’s 200MW wind/solar hybrid and 270MW (120MW & 150MW) for Sindh Solar Energy (SSEP).
- Additionally, a MoU has been signed with KEL regarding the potential conversion of HUBCO base into a Thar Coal project after the PPA expires in Mar'27. Regulatory and technical discussions are ongoing, and may take 2-2.5 years after PPA's expiry for the conversion to be implemented.
- With regards the circular debt situation, management expects GoP to adhere to the levels of PkR2.5tn agreed with the IMF, hereby continuing to manage the stock. Nonetheless, there is a need for improved planning and enhanced measures to control theft. Merely managing the outstanding debt stock through price increases is insufficient.
- Regarding the tariff true-up for CPHGC, the process is currently under tribunal review, however management remains hopeful of the decision to be in favor of the company.
- Company’s policy for dividend is to distribute any available surplus cash to its shareholders at regular intervals.
- There remains a constraint in power transmission from the Southern region to the North, which results in the load factors of south-based power plants (LEPCL, CPHGC, PQCPP) remaining on the lower end.
- With regards to under-funded status of the Energy Revolving Fund Account created in 2022, management stated that this remains an issue at the government level. However, concerns persist among Chinese partners.
- Commencement of exploration activity from newly awarded S.W Miano still in planning stages, with approval pending from DGPC.
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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