LOADS - FY23 Analyst Briefing Takeaways, (AKD Off the Analyst's Desk Nov 21, 2023)
LOADS held its analyst briefing earlier today to apprise investors about their FY23 financial results and future outlook. Following are the key highlights of the call:
- To recall, company reported a loss of PkR5.23/sh in FY23 vs. the negligible earnings of PkR0.005/sh in the previous year. This loss was primarily attributed to a decrease in sales volumes owing to an overall 55%YoY decline in the auto sector.
- Breaking down the segments, exhaust systems recorded PkR2.7bn, sheet metal components PkR1.4bn, and radiators PkR0.4bn in FY23, compared to PkR4.6bn, PkR2.2bn, and PkR1.0bn, respectively, in the previous year.
- In terms of customers, Suzuki is the largest contributor with 54%, followed by Indus (Toyota) with 22%, Honda with 12%, and the remaining sales to other players & after-market segment. Notably, after-market sales constitutes ~6-8% of total sales.
- Management pointed out that the after-market segment is significantly affected by the presence of smuggled auto parts and under-invoicing of Chinese parts by local dealers.
- Regarding the import of raw material, the company currently benefits from a 0% duty as per current law, with raw materials including Stainless Steel & Aluminum materials.
- However, management highlighted that import restrictions have been eased, but the imposition of a 100% cash margin condition poses a significant financial challenge, leading to increased financial charges.
- On the alloy wheel project "Hi-Tech Alloy Wheels Limited," management mentioned that the project is currently suspended, and the company is focusing on core operations.
- Looking ahead, management anticipates a recovery in the auto sector and foresees high demand for automobiles in the next three years.
- Moreover, the management is actively focusing on exports and is engaged in discussions with OEMs for potential marketing opportunities in the international market.
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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