Pakistan Cements_ Jan’20 Local dispatches increased by 6.5%YoY,(AKD Daily, Feb 10, 2020)
Pakistan Cements: Jan’20 Local dispatches increased by 6.5%YoY
- Local cement sales for Jan’20 increased by 6.5%YoY where both regions witnessed contrasting trends, local sales in North increased by 8.0%YoY while South posted a decline of 18.3%YoY. For 7MFY20, total dispatches increased by 7.3%YoY where major growth was witnessed in exports — up by 25.4%YoY — followed by 4.0%YoY rise in local dispatches.
- Growth in dispatches can mainly be attributed to government speeding up release of development expenditure in the last few months while low base effect is also in play. However, seasonality along with the transporter’s strike has played a part in sequential decline of 7.7%MoM.
- Despite a healthy growth in North’s local dispatches (up 11.9%YoY for 7MFY20), cement prices have come down by ~PkR70-90/ bag where we expect weakness to continue particularly after ~8.1mn tons of new capacities have come online, prompting pricing indiscipline.
- We expect pressure on cement sector keeping in view weakening sector dynamics emanating further weakness in 3QFY20 profitability (increasing downside risk to earnings estimates). LUCK (TP: PkR585.6/sh, 24.9% upside) remains our preferred play from the sector with the company relatively resilient to change in retail cement prices.
AKD Research
Lucky Cement is a cement manufacturing and distribution company which is based in Pakistan. Co. is engaged in the manufacture and sale of Ordinary Portland, Sulphate Resistant, and Slag Cement. Co.'s brand names included Lucky Cement, Lucky Star, Lucky Gold, Chairman, and Lucky Sulphate Resistant Cement. Co. maintains production facilities in Pezu (Production capacity: 13,000 tons per day) as well as in Karachi (Production capacity: 8,000 tons per day). In addition, Co. is engaged in developing export markets for bulk loose cement from Pakistan to the Gulf Countries, African Markets, and Far East Region including Nepal & Sri Lanka.
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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