Siddiqsons Tin Plate Limited - Can Foray into CRC Disrupt Sector Dynamics?
- STPL is the latest player to announce entry into CRC segment with a capacity of 200ktpa to vertically integrate it with its existing downstream segment of tinplate and cans manufacturing. The plant is expected to commission during 4QFY20.
- STPL’s CRC capacity has increased the risk of oversupply as existing capacity expansions of 930ktpa are slated to come online during 2018 taking industry capacity to 1.7mntpa this year and 1.9mntpa by the end of FY20. Moreover the risk of slowdown in domestic demand growth, with expected dip in GDP growth, may aggravate the dynamics (post FY20) as there is now less room for domestic industry to eat market share of imports (latter accounted for a mere ~30% share in FY17).
- As per Management Guidance, STPL’s FY21 earnings are projected to jump 261%YoY to PKR578mn (Fully diluted EPS: PKR2.52), translating into FY21F Right Adjusted PE of 7.6x (from FY19F PE of 26.7x) – considerably higher when compared to Peer Valuations.
Siddiqsons Tin Plate Limited is engaged in the manufacturing and sale of tin plates, cans and other steel products, and trading of refined chromite. The Company's canning products include canning line, oil and lubricants, paints, edible oils and associated products, packed food cans and miscellaneous cans. Its tinplate products include tinplate coils and tinplate sheets. It produces tin plate fine sheets, which include bright, stone and matt. Its tinplate products' applications include food cans, edible oil and ghee cans, beverages cans, paints and chemical product cans, crown caps for beverages, decorative cans, lubricant tins, aerosol cans, grease and polish containers, fuel and air filters, and telephone cable for steel taping purposes. Its tin plant is located at Winder Industrial Estate in the province of Balochistan. The project has a capacity to produce 120,000 tons per annum of tin plate. The canning plant is located at Malir, Karachi in the province of Sindh.
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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