Honda Atlas Cars (HCAR): 4QMY20 LPS at Rs0.20 vs. 4QMY19 EPS of Rs8.19 (below expectations)
- Honda Atlas Cars (HCAR) reported its 4QMY20 results, with LPS clocking in at Rs0.20 compared to EPS of Rs8.19 in 4QMY19. During MY20, earnings clocked in at Rs4.77/share, down 82% YoY.
- Company has also announced a cash dividend of Rs1/share.
- The result came in below expectations.
- The significant decline to earnings in MY20 is mainly attributable to declining sales volume as volumetric sales went down by 54% YoY, while substantial increase in finance cost was also witnessed compared to previous year.
- Effective tax rate for MY20 clocked in at 56% which was 31% in MY19, which we believe is on account of applicability of turnover tax.
- For the year MY20, company recorded finance cost of Rs727mn as compared to Rs11mn in MY19. This substantial increase in finance cost was due to increased borrowing to fulfill higher working capital requirement on high interest rates.
- In 4QMY20, volumetric sales recorded increase of 54% QoQ on the back of New Year effect, however gross margins declined by 0.90ppts QoQ.
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.
Topline Securities is one of the fastest-growing brokerage houses in Pakistan. It has strong Equity Brokerage, Economic/ Equity Research, Commodity Trading and Corporate Finance & Advisory functions.
Topline Securities has been endowed with numerous awards by renowned international financial organizations. The highlights of which consists of the award for ‘Best Local Brokerage House of Pakistan’ by Asiamoney Brokers Poll (the largest Asia-focused equity services provider poll) in 2016 and ‘Best Equity Brokerage House’ by CFA Society Pakistan in 2015.
Previously, Topline Securities held the title for ‘Best Brokerage House’ for 4 consecutive years (2011-2014) by Asiamoney Brokers Poll. Other awards include the ‘Best Salesperson’ award by Asiamoney for 6 consecutive years (2011-2016), the ‘Arabia Fast Growth 500’ award and ‘Pakistan Fast Growth 100’ award in 2012 and 2013 by AllWorld Network.
JCR-VIS, a credit rating agency providing independent rating services in Pakistan has assigned initial rating of “A-2” for short term and “A” for long term to Topline Securities. Topline Securities is registered as Underwriter, Book Runner and Research Entity with Securities & Exchange Commission of Pakistan (SECP).
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