Pakistan Automobiles: Car sales up 16% YoY in Aug-2020
- Car sales, as reported by PAMA, increased by 16% YoY in Aug-2020 to 11,678 units. Indus Motor (INDU) and Honda Car (HCAR) registered sales increase of 52% YoY and 72% YoY, respectively. However, Pak Suzuki Motor Company (PSMC) sales declined by 9% YoY.
- Kia Lucky Motors (non-member of PAMA) continued to perform well and is also planning to shift its production to double shift from Jan-2021 to meet high customer demand. As per our channel checks KIA sold around ~1500 units for Aug-20.
- Another new entrant Hyundai Nishat launched Tucson in SUV category during the outgoing month and successfully sold 22 units along with 88 units of Porter H-100 (a commercial pickup).
- Moreover, car sales increased by 1% MoM in Aug-2020, in which major increase was reported by PSMC with 20% MoM rise, however INDU and HCAR reported declines of 18% MoM and 8% MoM, respectively.
- Atlas Honda (ATLH) recorded motorbike sales of 85,000 units in Aug-2020, up 6% YoY. However, sales declined by 10% MoM.
- Tractor sales in Aug-2020 are up 12% YoY, while down by 21% MoM. Millat Tractors (MTL) recorded increase of 80% YoY while Al Ghazi Tractors (AGTL) sales declined by 51% YoY, respectively.
- We expect demand for cars to grow stronger as lower interest rates for auto financing along with pickup in economic activity amidst declining cases of COVID-19 has revived demand for new cars.
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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