Intermarket Securities Limited - Honda Atlas Cars (Pakistan) Ltd. (HCAR) Intermarket Pulse: HCAR: Estimates revised on new product offering, Buy maintained

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Intermarket Securities Limited

Muhammad Saad Ali

EUR 4.42 For Business Accounts Only

Intermarket Pulse: HCAR: Estimates revised on new product offering, Buy maintained

We revise up MY18/19 EPS estimates (by 2%) for HCAR while trimming our medium to long term growth assumption. Our new TP is down 3% due to more moderate LT assumptions, we maintain our Buy stance.

We incorporate moderate increase in sales from Honda’s new 2017 facelift in City variant (Aspire), while major impetus to MY19 earnings should arise from potential launch of new model (taking cue from recent launch in India). We also lift our sales assumption for high-margin BR-V (1QMY18: 2,159 units) to 8000 units.

1QMY18 NPAT came up to PRs2.09bn (EPS: PRs14.61), up 99%YoY where jump in earnings came from strong unit sales (up 54%YoY/ 96%QoQ) driven by the Civic model and impressive start to BRV sales. HCAR also announced interim cash dividend of PRs4.18/share.

10/08/2017 4 EN

Underlying

Honda Atlas Cars (Pakistan) Ltd.

Honda Atlas Cars (Pakistan) Limited. Honda Atlas Cars (Pakistan) Limited is engaged in assembling and progressive manufacturing and sale of Honda vehicles and spare parts. The Company's segments include Manufacturing and Trading. The Company's Manufacturing segment relates to the sale of locally manufactured cars and parts. The Trading segment relates to the trading of completely built units (CBUs) and parts. The Company's factory is located at Multan Road, Manga Mandi, Lahore. The Company offers car models, such as Honda Accord, Honda CR-V, Honda CR-Z, Honda HR-V, Honda Civic (over four models), Honda City Aspire (over four models) and Honda City (over four models) in various colors with a range of technology features. The Company's cars are available in colors, including crystal black pearl, bold beige, taffeta white, urban titanium, modern steel metallic, habenaro red, alabaster silver metallic, camelian red pearl and white orchid pearl. The Company is a subsidiary of Honda Motor Co., Ltd., Japan.

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PK0064901017 Pakistan Stock Exchange Pakistan

Provider

Intermarket Securities Limited

Intermarket Securities Limited (IMS) is a full service corporate brokerage firm based in Karachi, Pakistan. We service both domestic and international clients. IMS was ranked #2 Best Local Brokerage and #3 Best for Overall Country Research for 2016 by AsiaMoney.

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Analysts

Muhammad Saad Ali

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Intermarket Pulse: HCAR: Estimates revised on new product offering, Buy maintained

Honda Atlas: 1QMY24 Result Review: Strong other income leads to a profit

Honda Atlas: MY23 Review - Better gross margins overshadowed by Fx losses

Pakistan Autos - Attractive valuations take care of the risks

Intermarket Pulse: Pakistan Food producers: 1QCY18- Another weak quarter for consumers

Pakistan IPPs: Favor NPL over NCPL in a tougher macro environment

Intermarket Pulse: Pakistan Banks: Valuation anomaly warrants switch to large banks

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