Autos: Attractive 1QCY18 sales keep the pot boiling
Monthly PAMA data reads total industry sales at 23,406 units for Mar'18 (+10.2%YoY), extending stamina throughout 1QCY18, closing the quarter nearing 71.5K units (+12.6%YoY). While Passenger Car sales clocked in at 18,988 (-0.2%MoM), a major shift is noticed in the OEMs contribution with HCAR/INDU taking the lead +18.7%/+13.6%MoM and PSMC losing grounds (-13.9%MoM) on the back of slowdown in Wagon-R sales (fulfillment of orders, introduction of minor face lift follows) and LCV segment sales flattening. Fulfillment of corporate order for PSMC led to weakening of 1000CC and below segment sales (-11.3%/-14.3%MoM) with 1300CC and above premium segment sales contributing +16.1%MoM. Even so, resilience in sales of Trucks/Buses/Tractors with +29.6%/+58.9%/+18.3%, highlight operational progress from GHNI/MTL/AGTL where sales for the OEMs crossed 1,053/11,025/8,827 units for 1QCY18. Cumulative 9MFY18 sales reach 200K units (+22.5%YoY) supported by growth from Passenger cars/LCVs and pickup segment (161,371/31,362 units for the period, 16.8%/+64.7%YoY), where a healthy 1QCY19 also bodes well for Passenger car OEMs. With expansion activity nearing completion (2QCY18 expected on-boarding); increasing capacity to 75K units, national polls drawing closer leading to fleet sales (specially in 4X4 segment) and stratification of Corolla adding value (expectations detailed in previous notes), INDU remains our top pick with a DCF based TP of 2,192/sh (raised in Mar'18) positing 18.4% upside from current price levels.
Indus Motor is engaged in the assembly, progressive manufacture, import and marketing of Toyota motor vehicles. Co. is also the sole distributor of Toyota and Daihatsu vehicles in Pakistan.
Pak Suzuki Motor is engaged in assembling, progressive manufacturing and marketing of Suzuki cars, pickups, vans, and 4X4 vehicles. Co.'s product models include Baleno, Margalla, Mehran, Kyber, Ravi Pickup, Bolan Van and Potohar Jeep.
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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