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Pakistan Automobiles: Car sales (including KIA) up ~63% YoY in Nov-2020

  • Car sales, as reported by PAMA, increased by 48% YoY in Nov-2020 to 14,454 units. The same, including Lucky Motor Corporation (KIA, non-member of PAMA), is up by 63% YoY.
  • Indus Motor (INDU), Honda Car (HCAR) and Pak Suzuki Motor Company (PSMC) registered sales increases of 87% YoY, 72% YoY and 16% YoY respectively. This is the first YoY increase in FY21 for PSMC as some of the production issues have been resolved.
  • Car sales also increased by 3% MoM in Nov-2020. The increase was driven by PSMC’s increase of 12% MoM as Cultus sales grew by 86% MoM followed by Ravi sales improving by 255% MoM. HCAR’s sales were same as last month. INDU’s volumes declined by 10% MoM.
  • New entrants into Pak Auto space Hyundai Nishat sold 472 units (+63% MoM) in Nov-2020, while Lucky Motor sold around ~1,500 units, as per our channel checks.
  • Atlas Honda (ATLH) recorded motorbike sales of 108,005 units in Nov-2020, up 14% YoY. In 5MFY21, sales have increased by 19% YoY.
  • Tractor sales in Nov-2020 are up 77% YoY, while decreasing by 28% MoM. Millat Tractors (MTL) recorded increase of 67% YoY (-22% MoM) while Al Ghazi Tractors (AGTL) sales increased by 116% YoY (-39% MoM), respectively.

We expect demand for cars to grow stronger owing to low interest rates environment and pickup in economic activity. We are Over-Weight on Pak Automobiles with Buy ratings on INDU, HCAR and MTL.

Topline Securities Limited
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).

Shankar Talreja

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