KEL: New MYT decision is a “storm in a tea-cupâ€
The process for renewing the MYT (applicable from FY09-16, when Abraaj acquired operating control) has now been extended to 16 months where the first notified tariff was released on March'17 followed by a Motion for Review decision on October'17 followed by today's release of a reconsideration request. Accompanying tables illustrate the next to negligible impact of minor increase in the current decision where the applicable average sale rate of PkR12.8172/KwH vs. PkR12.7706/KwH allowing an increase of a mere PkR0.05/KwH adding PkR~817mn to gross revenues. The only other notable (yet modest) relief is in the form of allowed for O&M component in the annual adjustment taking the applicable base rate to PkR1.771/KwH from PkR1.7672/KwH in Oct'17 (and PkR1.7540/KwH in March'17), where the marginal rise adds a measly PkR68.1mn to O&M income. The company has failed to present FY17 accounts with a set of extensions being approved by the regulator as the core basis of calculating revenues and costs. Clarity on these fronts, accompanied by improved prospects for the release of FY17 results, and progress on Shanghai Electric takeover, are hefty catalysts for the stock recording a move of +9.5%. However, we retain our Under Review status on the stock and await FY17 accounts to update our estimates.
K-Electric Limited is a Pakistan-based company engaged in the generation transmission and distribution of electric energy to industrial and other consumers. The Company covers an area of over 6,500 square kilometers and supplies electricity to all the industrial, commercial, agricultural and residential areas that come under its network. The Company provides electricity to customers in Karachi, Dhabeji and Gharo in the province of Sindh and Hub and Uthal, Vindhar and Bela in Baluchistan. It produces electricity from its own generation units with an installed capacity of 2,341 megawatts. The Company's transmission system comprises a total of approximately 1,249 kilometers of 220 kilovolts, 132 kilovolts and 66 kilovolts lines with over 60 grid stations and approximately 130 power transformers. Its power distribution is managed though distribution of the area into approximately four regions, which are divided into a total of approximately 30 distribution centers.
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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