Pakistan OMCs_ Impressive start to new year, (AKD Daily, Feb 02, 2021)
AKD Daily
Pakistan OMCs: Impressive start to new year
- OMC volumes witnessed an increase of 12%YoY for Jan'21 led by FO as the fuel witnessed growth of 34/21% YoY/MoM while retail fuels posted a growth of 9%YoY where MS/HSD posted YoY growth of 4/14% however declined on MoM basis by 5/13%.
- Overall, local OMC sales continued on a strong footing, up 12%YoY for 7MFY21 (up 8% excluding FO) where seasonal uptick in FO demand for power generation over the period drove growth of 38%YoY while MS/HSD followed with growth of 7/13% YoY.
- Market shares remain fluid with PSO/APL/HASCOL/SHEL accounting for market shares of 46/9/4/8% during Jan'21 where a comparison with Jan'20 reveals decreasing share of HASCOL/APL by 5/1ppts while market share of PSO increased by 7.
- PSO (TP: PkR293.1/sh, 22.1% upside) is our top pick where medium term developments include clearance of circular debt and shift in cash profile of cash flows due to increased share of retail fuels while focus on improving storage infrastructure will result in company sustaining the recently gained market share, moving forward. At the other end of the spectrum, APL (TP:PkR434.3/sh, 23.8.5% upside) has inherent ’anti-bodies’ against sector head-winds with a strong balance sheet, high cash flow generation (PkR4.1bn avg. OCF for FY21-24) and progress on storage capability to improve market share.
AKD Research
Pakistan State Oil is a petroleum group based in Pakistan. Co.'s principal activities are the procurement, storage and marketing of petroleum and related products. Co. also blends and markets various kinds of lubricating oils.
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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