Pakistan Cement_Seasonality taking a toll on local cement dispatches, (AKD Daily, Jan 05, 2022)
AKD Daily
Pakistan Cement: Seasonality taking a toll on local cement dispatches
- Local cement dispatches fell prey to seasonality and stood at 4.1mn tons for Dec’21, declining by 3.0/1.6% YoY/MoM. Region wise, the decline was more pronounced in North with the region witnessing a decline in dispatches of 3.5/2.7% YoY/MoM
- Overall we expect the local demand to remain strong for FY22 as economic activity continues to pick up where private sector is expected to provide the major support to demand.
- Given the current coal prices and delayed pass-on of increased costs by cement players previously, we continue to maintain our stance of pressure on margins in near term (2QFY22 and 3QFY22).
- Volatility in coal prices is expected to keep cement sector volatile as well however the aforesaid volatility can provide good entry points into the sector where we maintain our overweight stance, highlighting LUCK (TP: PkR1022/sh, 46% upside), MLCF (TP: PkR58/sh, 57% upside) and FCCL (TP: PkR27/sh, 42% upside) as our top picks from sector.
AKD Research
Maple Leaf Cement Factory is engaged in the production and sale of white cement, grey cement and clinker. Co. is a subsidiary of Kohinoor Textile Mills Limited.
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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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