PPL_Sui re pricing provides the upside avenue, (AKD Daily, Aug 04, 2017)
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We re-initiate coverage on Pakistan Petroleum Limited (PPL) stressing upon 1) its steadfast approach towards exploration and development activities and 2) the confirmation of the conversion of Sui Mining Lease to Development and Production Lease and subsequent retroactive application of Petroleum Policy 2012 as the key triggers. While international oil price scenario remains depressed (our long term forecast of US$55/bbl), the company looks to diversify its asset base with 2D and 3D seismic activities in all of its exploration assets, with a focus towards Gambat South as 14th exploratory well Zafir X-1 was recently spudded. Not only this, the company was able to replenish its reserves by 126% with additions from Adhi and Kandhkot blocks, where its proven reserves now stand at more than 2.6BCF. With our earnings forecast for FY17/18F at PkR14.16/19.46/sh, the company trades at a FY18 P/E of 9.1x. We revise our NAV based target price to PkR205/sh, providing 19.1% upside along with FY18 D/Y of 4.5%, ACCUMULATE!
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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