Flash Note: D.G. Khan Cement Company Limited - First Major Miss in the Sector
- G. Khan Cement (DGKC) announced its 1QFY19 financial result where it posted standalone Profit after Tax of PKR418mn (EPS: PKR0.95, down 85%YoY and 89%QoQ) - significantly below our estimates. The decline in earnings came on the back of low Gross Margin at 13% (down 22ppts YoY and 9ppts QoQ).
- The topline grew by 9%YoY and 12%QoQ to PKR8.18bn (below our estimates). We believe the deviation came due to lower than expected export retention price. This has also been confirmed by our discussion with the Management who hinted that the company exported Clinker from its South plant at a price of around USD36/ton (compared to our estimate of USD40/ton for Cement from South, which we thought we had already taken to be on the lower side).
- Recall that in Jun-18 DGKC commenced operations of its Greenfield cement plant in Hub, Baluchistan (capacity: 2.8mn tpa). To utilize the recent capacity expansion, the company has been focusing on low-priced export markets to breakeven (exports up 77%QoQ during the outgoing quarter).
Co. is engaged in the production and sale of Ordinary Portland and Sulphate Resistant Cements.
Elixir Securities Pakistan is a Corporate Member of the Pakistan Stock Exchange & Pakistan Mercantile Exchange and is one of the leading securities brokerage & investment banking firms in Pakistan, established since 1994. Our principal business activities include all aspects of Pakistan’s Capital Markets covering Securities Brokerage (Equities, Fixed Income and Commodities), Corporate Finance & Capital Markets Advisory (M&A, ECM, DCM) and Investment Research (Economics & Securities). We are one of the most active & aggressive Broker-Dealers in Pakistan executing trades for most of the Top 20 Global Brokers with unmatched corporate access credentials and have successfully advised and closed on some landmark ECM transactions in the history of Pakistan including the largest deal in frontier Asia (USD 1.02 billion). Our Clients include foreign and domestic financial institutions (Banks, Asset Managers, Insurance Companies, Pension Funds) corporates, HNWI’s and retail investors. This is supported by a very strong and independent research capability, which is quoted regularly in both local and international media.
Elixir Securities Pakistan is the proud recipient of many awards & recognitions including AsiaMoney’s Brokers Poll 2017, FinanceAsia’s Pakistan Best Investment Bank and Best Broker 2017, The Asset’s Best Brokerage House in Pakistan 2016, Asiamoney’s “Best Domestic Equity House 2015 in Pakistan”, The Asset Triple A Country Awards 2015 - Pakistan “Deal of the Year” and “Deal of the Year-Highly Commended”, CFA Society of Pakistan Awards for Year 2015 “Best Research Analyst (1st Rank), CFA Society of Pakistan Awards for Year 2014 “Best Research Analyst (1st Rank)”, “Best Trader” 2nd Runner-up (3rd Rank), The Asset Triple A Country Awards 2014’s “Best Deal in Pakistan” and Capital Finance International’s nomination for “Best Equity Research in Pakistan 2010”.
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.