Revising Target Price to PKR 48.00, Maintaining Positive Stance
Fauji Fertilizer Bin Qasim Limited (FFBL) reported a loss of PKR 544m (LPS: PKR 0.58) for2QCY18, against loss of PKR 249m (LPS PKR 0.27) for the same period last year (SPLY), showing an increase of 1.18x YoY. The increase in loss was despite a growth of 14.42% YoY in FFBL’s top-line. The loss was primarily attributable to i) higher power costs during the period, ii) increase in cost of phosphoric acid, and iii) decrease in other income. We have incorporated the company’s latest results and have updated our assumptions for the upcoming period. Accordingly, we have revised our target price for the stock to PKR 48.00 for June 2019 (previous Dec-18 TP: PKR 45.15), which implies an upside of 29.00% from the company’s last closing price; hence, we are maintaining our positive stance on the script.
Fauji Fertilizer Bin Qasim Limited is a Pakistan-based holding company. The Company manufactures, purchases and markets fertilizers. It is involved in meat, dairy and coal based energy generation sectors. It has identified its potential business segments and has undertaken investments in the areas of food, financial, power sector and wind energy projects. Its products include Granular Urea, such as Sona Urea, and Di Ammonium Phosphate (DAP), such as Sona DAP. Sona Urea is a synthetic organic compound containing nitrogen in amide form available in the form of white solid prills. It is applied to soil and also suitable in solution form as spray application. Sona DAP contains nutrient element, phosphorous besides nitrogen available in flowing granular form Granules are stronger, harder and of uniform size. It is suitable for various crops and soils recommended for initial application. It produces over 791,260 metric tons (MT) of DAP and approximately 433,610 MT of Urea.
Ismail Iqbal Securities (Private) Limited (IISPL) is a TREC holder of the Pakistan Stock Exchange, as well as an SECP registered Underwriter and Book Runner. IISPL provides comprehensive financial services including Equity Sales, Research on Equities and the Macro-Economy, Investment Advisory, Portfolio Management, Corporate Finance, and extensive services for Private Equity investors. IISPL services a diversified client base, from Institutional to Retail Investors including High Net worth Individuals.
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