Hub Power Company Limited - Closer to Becoming the "Hub" of Pakistan's Power Landscape
- HUBC is targeting to achieve COD of its 1,320MW imported coal project by Aug-19, which we expect to have an EPS contribution of PKR11.4 by FY21 and alone accounts for PKR50 in our Jun-19 PT
- The company also commands a stake of 60% in 330MW coal project (TEL) for which it is targeting COD by Mar-21 (from Dec-20 earlier); we expect the project to contribute PKR2.9 in EPS by FY22.
- HUBC owns 8% stake in SECMC, which the management is targeting to bring online by Jun-19; we have conservatively incorporated a six month lag in our estimates and project FY21 EPS impact of PKR0.95.
- For current operations of the company, we expect further curtailment in generation bonus from Hub Plant; however higher Dividend Income from Laraib Energy (PKR2.2bn) should cushion the cash flows and unconsolidated profitability in FY19.
- With a 3 year CAGR of 41% over FY18-21 and a total upside of 57% to our Jun-18 PT of PKR135, we feel that the market is yet to price in the growth projects that HUBC is closing in on.
Hub Power Company is a holding company. Through its subsidiaries, Co. is engaged as a power producer in Pakistan that focuses on developing, owning, operating and maintaining power stations. Co. supplies electricity to Water and Power Development Authority and National Transmission and Despatch Company under long term Power Purchase Agreements for its Hub and Narowal plants respectively.
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”.
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