Topline Securities Limited - Sui Northern Gas Pipelines (SNGP) Topline Flash Note: Sui Northern Gas (SNGP): Analyst Briefing Takeaways

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Topline Securities Limited

Shankar Talreja

EUR 35.00 For Business Accounts Only

Topline Flash Note: Sui Northern Gas (SNGP): Analyst Briefing Takeaways

Overall sales mix of the company is 55% RLNG and 45% Natural Gas.
Transmission network related UFG in FY19 jumped to 7.7bcf from 2.8bcf. Management expects no increase in Transmission network related UFG from these levels. Strategy to curtail these losses is ongoing.
Future pipeline projects in Pakistan are 300KM Turkmenistan-Afghanistan-Pakistan-India (TAPI), 270KM Iran-Pakistan (IP) and 1,100KM North South Gas Pipelines.
In North South Gas Pipeline, there is no defined role of SNGP as of now.
The company currently has Rs70bn worth of projects under hand.
Cash flow position of the company has improved slightly after the recent decline in oil and RLNG prices. However, management did not quantify the percentage increase in recovery from customers.
Monthly buildup of amount from the customers who have gone into litigation is Rs10bn.
Currently SNGP has borrowings of Rs80bn, out of which Rs20bn are for Natural Gas and rest can be attributed to RLNG.
The company got Rs32bn in Energy Sukuk II. Out of this, company made payments to OGDC, PPL and PSO.
Last date for consumers to pay the first installment of GIDC is Sep 17, 2020. The company has already issued bills to the consumers.

On question pertaining to possible reduction in WACC as IPPs returns are also being revised down, the management said, currently there are no plans to change Return Earned on Fixed Assets.

07/09/2020 2 EN

Underlying

Sui Northern Gas Pipelines

Sui Northern Gas Pipelines is engaged in the purchase, transmission, distribution and supply of natural gas. Co. also expanded its activities to undertake the planning, designing and construction of pipelines, both for itself and other organizations.

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PK0008901016 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

Shankar Talreja

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Topline Flash Note: Sui Northern Gas (SNGP): Analyst Briefing Takeaways

Pakistan Strategy: OGRAâ€™s decision on two Suis; -ve for industries, +ve for E&Ps

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Pakistan Strategy: Foreign selling at PSX; Will this trend continue in 2021?

Pakistan Strategy: Pakistan Outlook 2021 based on Topline Poll

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

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