Pakistan Automobiles: Car sales (including KIA) up ~43% YoY in Oct-2020
- Car sales, as reported by PAMA, increased by 29% YoY in Oct-2020 to 14,054 units. The same, including Lucky Motor Corporation (KIA, non-member of PAMA), is up by 43% YoY.
- Indus Motor (INDU) and Honda Car (HCAR) registered sales increase of 120% YoY and 61% YoY, respectively. However, Pak Suzuki Motor Company (PSMC) sales declined by 13% YoY due to drop in Alto’s sales by 29% YoY (last year Alto saw high numbers due to its recent launch) and drop in Cultus sales by 31% YoY.
- Car sales also increased by 1% MoM in Oct-2020. The increase was driven by INDU’s increase of 26% MoM as Yaris sales grew by 26% MoM. HCAR sales saw a decline of 18% MoM as City and Civic sales declined by 18% MoM most likely due to availability of new launched Yaris.
- New entrants into Pak Auto space Hyundai Nishat sold 289 units (-9% MoM) in Oct-2020, while Lucky sold around ~1,500 units, as per our channel checks.
- Atlas Honda (ATLH) recorded motorbike sales of 116,000 units in Oct-2020, up 16% YoY. In 4MFY21, sales have increased by 21% YoY.
- Tractor sales in Oct-2020 are up 57% YoY, while also increasing by 5% MoM. Millat Tractors (MTL) recorded increase of 51% YoY (+7% MoM) while Al Ghazi Tractors (AGTL) sales increased by 73% YoY (+2% MoM), respectively.
We expect demand for cars to grow stronger owing to lower interest rates for auto financing along with pickup in economic activity. We are Over-Weight on Pak Automobiles with Buy ratings on INDU, HCAR and MTL.
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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