Pakistan Autos_The new talk of the town Swift (AKD Daily, Dec 07, 2021)
AKD Daily
Pakistan Autos: The new talk of the town Swift
- As a proxy, we breakdown the quarterly capex for the big three OEMs in order to highlight the upcoming developments in Pakistan’s auto industry. PSMC has incurred a capex of PkR4.5bn in 9MCY21 (5.7xYoY), signaling the new Swift in pipeline which is expected to be launched in 2HCY22.
- The capex of INDU in 1QFY22 has declined slightly to PkR437mn in contrast to average quarterly capex of PkR614mn in FY21 which signals that the new capacity is expected to come online soon. The capex for HCAR in the latest quarter has increased from PkR234mn in 1QMY22 to PkR523mn in 2QMY22 which signals the initial development of new Civic, however, we are yet to gain clarity from the management.
- We expect the 4th generation of Swift to be launched locally in 2HCY22 which is expected to be a handsome upgrade for the Pakistani market as the company had been selling the 2nd generation of swift for over a decade. The car is expected to be propelled in 1.2L engine and expected to be priced in the range of PkR2.6-2.8mn.
- In the latest development, the govt. has increased the RD on imported CBUs from 15% to 50% in order to contain the massive increase in import bill. This bodes well for the local OEMs, enabling them to capture the lost market share.
- Our preferred play is INDU (TP: PkR1,750/sh) owing to first mover advantage in hybrid segment and cushion of ~PkR100/sh in form of other income. At the same time, we like PSMC (TP: PkR280/sh) owing to the new Swift in pipeline and fading completion from imported CBUs.
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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.
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