reports
Panther_Robust consumer durables exposure on offer, (AKD Daily, Jan 27...
AKD Daily Panther: Robust consumer durables exposure on offer With its book building commencing from today, Panther Tyres is the latest addition to the consumer durable space, where the company shows a strong track-record of benefitting from import substitution in key segments (Tractors, two & three wheelers) coupled with a stable margin profile. While discussing key facets of the domestic tyre manufacturing industry, we highlight the increasing role of import duties, improved documentation...
PAEL_Power equipment led rebound imminent - BUY!, (AKD Daily, Jan 19, ...
AKD Daily PAEL: Power equipment led rebound imminent - BUY! Terse macro conditions have handicapped PAEL’s consumer durables geared investment case long before COVID-19 led shutdowns materially disrupted operations, resulting in sharply divergent sales performance over the period (9MCY20 Appliance/Power sales moved +33.8/-14.7%YoY) While sticking to our base case appliances revenue growth of 15%YoY (raised from 10% in Sept’20) underpinned by a “return to normal” outlook for consumer confide...
INDU_Lean, mean, vehicle volume machine, (AKD Daily, Dec 17, 2020)
AKD Daily INDU: Lean, mean, vehicle volume machine Detailed accounts for 1QFY21 continue to depict a normalized operational backdrop, furthered by improved sales (reverting to 1QFY19 levels), where the OEM posted NPAT of PkR1.85bn (EPS:PkR23.48/sh) up by 9.1xQoQ/74%YoY, where recent sales performance has set the OEM on track to beat our previous sales forecasts for FY21 Based on the same and with the confirmation of an upgraded Corolla (face-lift) launch in Jan’21, we adjust our earnings ou...
Pakistan Autos_Sales getting back in the groove , (AKD Daily, Dec 14, ...
AKD Daily Pakistan Autos: Sales getting back in the groove Nov’20 total industry sales grew to 12,498 units (+10%MoM/+22%YoY) comprising of Passenger Cars sales of 9,576 units (+7%MoM/+12%YoY), LCV/Pickup offtake of 2,619 units (+26%MoM/+100%YoY) and new Tractor purchases of 3,234 (-28%MoM/+77%YoY), marking growth vis-à-vis low base, during the usual end of calendar down season. Monthly sales spiked for PC/LCV segments (+7/+26%MoM & +12/+100%YoY), with PC segment-wise split stood at 3,906/...
ASTL_Demand recovery, but with caveats, (AKD Daily, Dec 11, 2020)
AKD Daily ASTL: Demand recovery, but with caveats We raise our near term earnings estimates for ASTL, incorporating a swifter than expected recovery in demand and consequent better pricing dynamics leading to swifter margin recovery as well. At its core, we revise our earnings estimate for FY21/FY22F to PkR2.74/3.70 per sh (vs. PkR1.57/3.2 per sh previously). Consequently, our rolled over Dec’21 TP comes to PkR58 per sh (vs. 56 per sh previously). Although the company now enjoys consider...
Pakistan Oil & Gas_Cracks holding steady on hope of sustained rebound ...
AKD Daily Pakistan Oil & Gas: Cracks holding steady on hope of sustained rebound POL product cracks for second-half Nov’20 (11 trading days 12-26th) remained sticky - particularly for HSD (largest refining segment, 46%/44% of 1QFY21/FY20 output), despite underlying crude benchmarks inching higher (Arab Light during the period average at US$44.3/bbl up 14.1% over previous 14 days) fueled by COVID-19 vaccine efficacy and expectations of fiscal stimulus. HSD crack to Arab Light averaged US$+2...
Pakistan Strategy_Nov’20 performance rewards those who wait , (AKD Dai...
AKD Daily Pakistan Strategy: Nov’20 performance rewards those who wait Despite a clustering of close-fisted participation (KSE-100/All Vol. down 39/30%MoM) in medium to small cap stocks (KSE-100 share of ready volume hit 57% vs. 11MCY20 avg. of 66%), the benchmark KSE-100 index climbed 3.0%MoM, reversing two months of softness and inching CYTD performance back in the green (0.82%). Underlying sector performance shows sporadic returns for mainboard sectors (Banks/E&Ps/Cement/Fertz moved +4...
Pakistan Auto_Cash-flows post strong recovery, (AKD Daily, Nov 27, 202...
Presenting an updated cash flow position upon release of detailed financial accounts for auto OEMs we find aggressive normalization in industry CAPEX with the TTM total outlay of PkR5.64bn (down 21%QoQ/60%YoY) with PSMC/INDU/HCAR contributing 23/34/44%, where HCAR’s CAPEX outlay is an expected indication of model launch expectations. The industry’s TTM topline/gross profit recovered from near bottom levels seen just last quarter but remaining lower by 33/48%QoQ where the growth in outgoing ...
MPS_IMF program resumption the key takeaway, (AKD Daily, Nov 24, 2020)
Monetary Policy Committee (MPC) of the SBP, in its meeting yesterday, expectedly decided to keep the policy rate unchanged at 7.0%. The status quo reflected the largely unchanged inflation outlook and risks to the nascent economic recovery from the recent surge in C19 caseload both domestically and globally. In a subsequent analyst briefing, SBP Governor alluded towards a resumption of the program in the next few weeks, with the authorities closing the gap on the contentious issues. According...
PSMC_Demand upcycle couldn’t come sooner, (AKD Daily, Nov 23, 2020)
Recent sales numbers reflect the resilient nature of domestic vehicle sales where, while the same cannot be said for PSMC’s numbers (10MCY20 cumulative sales volume dip of 53%YoY vs. 48% for PC sales), we find some saving grace in Oct’20 sales stabilizing their downslide (-13%YoY vs. CYTD avg. of -48%YoY with Alto sales up ~5%YoY). Additionally, macro stability coupled with low interest rates are driving the start of another upcycle in vehicle sales, where we believe PSMC is likely to be a be...
Pakistan Economy_Volatile food & energy prices cool off for soft Nov’2...
Preliminary price trends for the month of Nov’20 signal relative ease in inflationary pressures, with headline inflation expected to decline to 7.88%YoY in Nov’20 vs. 8.91%YoY last month and 12.67%YoY in Nov’19. Sequentially, the index is likely to marginally move up by 0.39%MoM vs. 1.70%MoM in Oct’20 and 1.35%MoM in Nov’19. The expected decline in inflation is mostly on account of i) price normalization in certain food items (i.e. wheat, pulses, & rice), ii) lower energy prices (i.e. both g...
Pakistan Auto_Yaris inoculates industry against demand downslide, (AKD...
AKD Daily Pakistan Auto: Yaris inoculates industry against demand downslide PAMA reported Oct’20 total automotive industry sales fell -4%MoM despite landing firm over last year (+1%YoY, after 23 consecutive months of negative or no YoY growth), amounting to 11,384 units, where constituents moved -5%/-2%/0%/+36%/+5%MoM for Passenger Cars/LCVs/Trucks/Buses/Tractors, while LCV/Tractors/Trucks recorded rise of +53%/+33%/+57%YoY Cumulative 10MCY20 sales decline of 45.9%YoY was an offshoot of Pa...
Pakistan Oil & Gas_Cracks remain supportive – CAPEX plans present heft...
AKD Daily Pakistan Oil & Gas: Cracks remain supportive – CAPEX plans present hefty burden POL product cracks retained strength in the second half of Oct’20, despite underlying crude benchmarks inching higher (14th-27th Oct’20 Arab Light average at US$40.1/bbl up ~1% over previous 14 days) indicative of stabilizing global economic conditions, taking HSD/MS crack to Arab Light to average US$+2.25/+3.9/bbl, well above 4MFY21 averages (US$+1.7/+1.8/bbl) and noticeably lower for HSD YoY (US$+11.5...
Pakistan Strategy_US elections – More things change, more they stay th...
AKD Daily Pakistan Strategy: US elections – More things change, more they stay the same In arguably one of the most analyzed events occurring at regular intervals (every four years) globally, we find clarity emerging in the impasse for the US Presidential election vote count, where it seems highly likely (multiple paths to electoral majority) that we will find a 46th occupant of the White House in Former Vice President Joe Biden. In this rare event of a US president losing reelection, we op...
- Hamza Kamal
Pakistan Strategy_Market momentum bent not broken, (AKD Daily, Nov 02,...
AKD Daily Pakistan Strategy: Market momentum bent not broken Holding out against COVID-19 resurgence, FATF plenary outcome and political noise amidst a consolidating macro backdrop, the KSE-100 index succumbed, falling 1.7%MoM, with average volumes depleting 25%MoM, and a seasonal pivot to blue-chip plays ahead of earnings season Isolating sectoral performance MoM we highlight the role of side-stocks and idiosyncratic sectoral catalysts in driving market performance, where further compari...
INDU_1QFY21 EPS of PkR23.48 - In-line with expectations ,(AKD, Off the...
INDU: 1QFY21 EPS of PkR23.48 – In-line with expectations · INDU reported 1QFY21 NPAT of PkR2.6bn (EPS:PkR23.48) moving +40%YoY/+2.8xQoQ broadly in-line with our expectation of PkR2.0bn (EPS:PkR25.7). Slight deviation was in a lower topline than our expectation, which we believe is due to greater base variant sales of the June’20 launched Yaris, while GMs were 120bps lower than estimated (6.7% vs. expectation of 7.4%). · Despite weaker margins, cost controls w...
NML_1QFY21 Result review - Above expectations,(AKD, Off the Analyst's ...
NML - 1QFY21 Result review - Above expectations In its 1QFY21 result, NML reported net profit of PkR946mn (EPS: PKR2.69), marginally up 2.5%YoY and 34% ahead of our estimate. The earnings beat came on the back of higher than expected other income (we await clarity from the management on this). While core earnings were broadly in line with our expectations, slightly higher than expected topline and lower than expected S&A offset the impact of weaker gross margin. Key hig...
Pakistan Strategy: Blacklisting in the rearview mirror, (AKD Daily, Oc...
AKD Daily Pakistan Strategy: Blacklisting in the rearview mirror In its latest three-day plenary review, the Financial Action Task Force (FATF) has expectedly retained Pakistan in ‘grey list’ – officially known as ‘Jurisdictions under Increased Monitoring’, while acknowledging the notable progress made by the country since Feb’20, in a noticeably tamed statement. Pakistan is now largely compliant on 21 out of 27 items of the action plan (vs. 14 in Feb’20 and mere 5 in Oct’19), with complian...
Pakistan Strategy_FATF – Knockin’ on heaven’s doors, (AKD Daily, Oct 2...
AKD Daily Pakistan Strategy: FATF – Knockin’ on heaven’s doors The 39 (37+2) member organization is holding the closing session of its tri-annual plenary meeting today (conducted virtually due to COVID-19 pandemic), where Pakistan’s status as one of 18 “jurisdictions with strategic deficiency” or “grey list” is to be assessed, prompting heightened perceptions of event risk we have grown accustomed to since the latest round of reviews were initiated in June’18. With the GoP prioritizing meas...
PPL & HUBC_1QFY21 Result Previews, (AKD Daily, Oct 22, 2020)
AKD Daily PPL & HUBC: 1QFY21 Result Previews Depleted profitability as production normalizes: PPL is slated to report 1QFY21 results on 23rd Oct. (Friday) where we expect the firm to report NPAT of PkR12.2bn (EPS: PkR4.47/sh) receding 15%YoY but up 12%QoQ, backed by erratic realized oil/gas price shifts (stemming from COVID-19 induced supply-demand shocks as benchmarks reverted back to 40-50/bbl band during 1QFY21) and moderate indexation movements (~2% firmer PkR/US$ during 1QFY21). Major und...
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