Pakistan Autos: Weaker JPY allows margin sustainability in Dec'16 results
​We preview IMS Auto universe to post an NPAT of PkR5.6bn for quarter ending Dec'16 on a cumulative basis, up 10% YoY driven mainly by HCAR’s new Civic model which is partially offset by normalization of Apna-Rozgar scheme.
Our EPS estimates for the quarter are as follows: INDU (PkR38.02, up 1% YoY), PSMC (PkR11.41 down 41% YoY) and HCAR (PkR 12.3 up 188% YoY). Auto OEMs will largely be able to sustain margins where 25% QoQ hike in steel prices will partially be offset by 7% QoQ weakening of JPY against USD, which is more beneficial for players with lower localization and higher exposure to JPY.
Incumbents are again under limelight as a result of various corporate developments (PSMC: likely expansion and launch of Celerio, HCAR: new Civic model and likely launch of new City model and BR-V) and INDU (launch of new Fortuner and Hilux model) where they gear up to fight the upcoming competition beyond 2018.
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.
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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