PSMC: Who will pick-up the Pickup segment growth
Based on our previous assertions, we believe PSMC is set to announce a major CKD model upgrade/extension, where the launch of Mega Carry Xtra in the CBU pickup segment could be a push in the right direction over the medium term. Mapping out the trend of Pickup sales, we look at the growth potential of this burgeoning automotive segment. While datasets regarding this segment are incomplete (FAW does not report sales to PAMA), we opine over solid fundamentals backed by GoP policy actions and highlight the segment as a key beneficiary of CPEC investment spill-overs. Furthermore, taking a comprehensive look at PSMC's offerings in the segment, while comparing them to local offerings in the CKD category, where we highlight the prevalence of cost-based competition as the bedrock of competitive dynamics in the segment. In the meantime we expect status quo to prevail at the OEM for the medium term, where heightened CAPEX, increased investment in localizing high value components and focus on improved features augurs well for cushioning the OEM against erosion of market share dynamics. At a TP of PkR800.7/sh we believe the 57% upside on offer indicates significant under-pricing by market participants.
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.
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