PSMC_Demand upcycle couldn’t come sooner, (AKD Daily, Nov 23, 2020)
- Recent sales numbers reflect the resilient nature of domestic vehicle sales where, while the same cannot be said for PSMC’s numbers (10MCY20 cumulative sales volume dip of 53%YoY vs. 48% for PC sales), we find some saving grace in Oct’20 sales stabilizing their downslide (-13%YoY vs. CYTD avg. of -48%YoY with Alto sales up ~5%YoY).
- Additionally, macro stability coupled with low interest rates are driving the start of another upcycle in vehicle sales, where we believe PSMC is likely to be a beneficiary, but may face significant hurdles from new entrants amid price sensitive consumers holding off on making major purchase decisions
- In this backdrop we revise our sales estimates across the forecast horizon (unit sales CAGR over CY20-25 of 10.1% vs. 5.5% previously) while significantly shortening the path back to profitability (CY20/21 earnings raised by 30/65%) raising our DCF based TP to PkR180/sh.
- We have built in the weak earnings outlook, reflected in tepid unit sales assumptions (~76K unit sales for CY21) with the slowdown in LCV sales expected to persist (Bolan/Ravi demand expected to rise 40%YoY but stay below 9K units respectively), where major policy incentives are hard to forecast (bulk orders could lend upside risks).
AKD Research
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.
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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.