Topline Securities Limited - Hub Power Co. Ltd. (HUBC) Hub Power Company (HUBC): 4QFY20 EPS at Rs5.2, up 155% YoY (lower than industry expectations)

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Topline Securities Limited

Sunny Kummar

EUR 30.00 For Business Accounts Only

Hub Power Company (HUBC): 4QFY20 EPS at Rs5.2, up 155% YoY (lower than industry expectations)

Hub Power Company (HUBC) announced its 4QFY20 financial result today, where the company booked consolidated earnings of Rs6,791mn (EPS: Rs5.2) compared to a profit of Rs2,663mn (EPS: Rs2.1) in 4QFY19.
It takes full year FY20 earnings to Rs25,044mn (EPS: Rs19.3), up by 123% YoY.
The earnings came lower-than-industry expectations due to higher-than-expected tax expense in 4QFY20.
The company did not announce any dividend due to liquidity crunch amid circular debt as well as equity requirement for upcoming projects.
Turnover declined by 13% YoY to Rs11,848mn in 4QFY20 amid zero generation from Hub plant and lower generation from Narowal plant as the government focused on producing power from cheaper and efficient sources.
Share of profit from associate increased to Rs4,740mn compared to loss of Rs113mn amid contribution from coal plants mainly China Hub Power company (CPHGC).
Company has booked a tax expense of Rs3,274mn (effective tax rate 31%) in 4QFY20 compared to Rs231mn (effective tax rate 7%) in same period last year.

19/08/2020 2 EN

Underlying

Hub Power Co. Ltd.

Hub Power Company is a holding company. Through its subsidiaries, Co. is engaged as a power producer in Pakistan that focuses on developing, owning, operating and maintaining power stations. Co. supplies electricity to Water and Power Development Authority and National Transmission and Despatch Company under long term Power Purchase Agreements for its Hub and Narowal plants respectively.

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PK0065001015 Pakistan Stock Exchange Pakistan

Provider

Topline Securities Limited

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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Analysts

Sunny Kummar

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