Pak Suzuki Motor Company Limited - Entry of Bravo - Should it Threaten Mehran's Hegemony?
- According to media reports, United Motors is expected to launch locally assembled 800cc Bravo and 1000cc pickup on September 8, 2018. Depending on the price tag (our expectation: PKR650-750k), we project Bravo to achieve annual sales of 2,500-5,000 units in 2019 – order booking is likely to start in 4Q2018.
- Due to better price-value proposition, we expect Bravo to take away 3-6% of the market from the closest competitor and highest selling car in Pakistan i.e. Suzuki Mehran.
- Our back of the envelope calculations suggest annualized EPS impact of PKR0.3, PKR0.5 and PKR0.6 on PSMC if Mehran’s offtakes decline by 1500, 2100 and 3000 units.
- While we maintain an Underweight stance on the sector, the headwinds for PSMC may be diluted if the newly elected government caps car allowance benefit for its officers at 1000cc (which will be a huge boon for Suzuki Cultus).
Pak Suzuki Motor is engaged in assembling, progressive manufacturing and marketing of Suzuki cars, pickups, vans, and 4X4 vehicles. Co.'s product models include Baleno, Margalla, Mehran, Kyber, Ravi Pickup, Bolan Van and Potohar Jeep.
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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