Pakistan Cement: Offtake drowned out by uncanny monsoon, (AKD Daily, Sep 07, 2020)
AKD Daily Pakistan Cement: Offtake drowned out by uncanny monsoon · After an outstanding last two months on the back of demand backlog being cleared and initiation of housing schemes, government projects, monsoon rains have taken their seasonal toll on local dispatches, standing at 2.79mn tons for Aug’20, moving by +4.7/-29.3% YoY/MoM. · Exports, on the other hand, remained healthy with a YoY/MoM growth of 6/16% with a major contribution from South-based players (exports from South formed 71% of the total exports). Overall, for 8MCY20, cement dispatches have declined by 10.4%YoY where local dispatches declined by 11.6%YoY while exports declined by 3.2%YoY. · Demand softness is being reflected in prices as well where some brands have reduced their prices by PkR5-7/bag during last two weeks in order to protect their market share in Northern region , however prices in South remain firm as player continue to utilize exports to keep utilization high. · Valuations of AKD Cement universe look stretched on fundamentals however we believe, in a market driven by liquidity, stocks trading cheaply on comparative basis can still post performance where from conglomerates, LUCK is our preferred play with EV/EBITDA of 5.9x while we prefer MLCF (EV/EBITDA of 7.1x) from pure cement plays (PIOC, CHCC, FCCL, trading at combined EV/EBITDA of 9.3x). AKD Research
Co. is engaged in the manufacture and sale of cement and clinker.
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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