Intermarket Pulse: MLCF: Brownfield expansion to be a key checkpoint
​We revise up our target price for MLCF to PkR123/sh on incorporating MLCF Power Company’s potential tax savings and increasing confidence on margin sustainability. Our revised EPS estimates for FY17/18/19F are PkR10.94/13.71/14.41.
MLCF has also announced 2.1mn tons expansion which has not been incorporated in our model. Our initial workings suggest an incremental valuation of at least PkR41/sh to our target price, which remains key a upside risk.
We believe 15%FYTD rally of MLCF has mostly captured all the upcoming positives, except for the Brownfield expansion, which may take another 2.25years to materialize, in our view. That said, MLCF is currently trading at FY17/18F P/E of 11.1x/8.8x; 13%/19% discount to IMS Cement Universe (ex FCCL).
Maple Leaf Cement Factory is engaged in the production and sale of white cement, grey cement and clinker. Co. is a subsidiary of Kohinoor Textile Mills 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.
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.