Intermarket Securities Limited - Maple Leaf Cement Factory Ltd. (MLCF) Intermarket Pulse: MLCF: Power savings premium prices are key; reiterate Buy

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Intermarket Securities Limited

Syed Waqas Imam

EUR 4.36 For Business Accounts Only

Intermarket Pulse: MLCF: Power savings & premium prices are key; reiterate Buy

We revise our Jun’18 TP for MLCF to PRs83.0/sh and maintain our Buy stance on the scrip. MLCF’s relative immunization from sector headwinds due to power cost-savings and its premium retention pricing in Northern region (PRs337/bag) form the basis of our liking for the scrip.
Concerns on MLCF’s expansion were laid to rest after SC rescinded the ban on cement expansions. On the other hand, LHC also accepted EPA’s approval pertaining to MLCF’s expansion. Sector headwinds notwithstanding, the 2.3mn tpa expansion is a major growth trigger for the company, which is expected to come online by end FY19.
MLCF is currently trading at FY18/19F EV/EBITDA of 5.6x/5.3x, which is at 15%/9% discount to IMS Cement Universe average, while the stock trades at US$80 EV/ton based on new capacity and debt.

20/03/2018 4 EN

Underlying

Maple Leaf Cement Factory Ltd.

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.

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PK0066201010 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

Syed Waqas Imam

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Intermarket Pulse: MLCF: Power savings & premium prices are key; reiterate Buy

Maple Leaf Cement: 3QFY23 Review - Earnings decline on higher expenses and lower margins

Pakistan Cements: 3QFY23 Result Previews

Maple Leaf Cement: 2QFY23 Review - Impressive margins and lower finance cost lead to earnings beat

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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