reports
- Shahmir Malik
Honda Atlas: 1QMY24 Result Review: Strong other income leads to a prof...
HCAR reported NPAT of PKR 145mn (EPS: PKR 1.02) for 1QFY24, showing a decline of 78% YoY. The result is better than our estimated LPS of PKR1.26 and a significant improvement over LPS PKR: 5.77 in the previous quarter. Substantially higher other income of PKR903mn (on deployment of ST investments), helped offset operating level losses of PKR560mn. This, together with absence of hefty exchange losses – witnessed last quarter – led to the major deviation in today’s result. 1QMY24 key highlights...
- Shahmir Malik
Honda Atlas: MY23 Review - Better gross margins overshadowed by Fx los...
HCAR has reported NLAT of PKR824mn (LPS: PKR5.77) in 4QMY23 as compared with NPAT of PKR197mn in SPLY. The loss came in higher than our expected LPS of PKR4.94, where the major deviation stemmed from higher-than-expected other expenses. This takes MY23 net profits to PKR260mn (EPS: PKR1.82), down 90% YoY. The company did not announce any dividend as per our expectation. 4QMY23 Result highlights include: * HCAR has reported revenues of PKR 22.3bn, showing a 27% YoY decline, as sales volumes d...
- Shahmir Malik
Pakistan Autos - Attractive valuations take care of the risks
* We maintain our Buy ratings on INDU (TP: PKR1,200/sh) and PSMC (PKR160/sh), but downgrade our stance to Neutral on HCAR (PKR120/sh). We look beyond interim Fx losses for PSMC and focus on its operational improvement. We also like INDU for its resilience and plans to introduce HEVs. HCAR is impeded by its relatively limited product offerings. * We think the worst of the macroeconomic shock is behind us, with auto OEMs already experiencing "default-like conditions." Demand and supply ma...
- Shahmir Malik
Pakistan Autos – Sector losses to extend on low volumes and PKR deprec...
IMS Autos Universe is anticipated to post NLAT of PKR8.6bn for the quarter ended March 2023, where the major contribution will come from PSMC which is expected to report an exchange loss of PKR10.1bn on its foreign payables. HCAR may also report losses for the quarter. Prolonged measures to curb non-essential imports have forced some local players to shut down their assembly lines. As a result, industry sales and production have further contracted by 46% and 47% QoQ basis. The timeline for ea...
- IMS Research Team
Pakistan Autos Sales: Volumes improved sequentially amid ease off in p...
Latest automobile sales numbers showed a positive MoM growth of 36%. Sales were down by 2% on a YoY basis. Production numbers maintained their positive momentum growing by 37% MoM to 18,391 units. This is an encouraging sign, especially considering the tough macro-environment the automakers are currently facing, with elevated interest rates, PKR volatility and import curtailment measures on CKD imports. While the numbers are encouraging persistent deterioration in Pakistan’s economic indicato...
- IMS Research Team
Honda Atlas: 2Q23 Result: Lower revenues and elevated other expenses l...
HCAR has reported NLAT of PKR385mn (LPS: PKR2.70) for 2QMY23. This is a weak result from HCAR, where the deviation from our projected EPS of PKR2.08 is primarily due to lower-than-expected revenues and higher-than-expected other expenses. 2QMY23 key highlights: * Net revenue clocked in at c.PKR20bn, lower than IMS expectation of c.PKR22bn. The topline was down by 36% QoQ and 25% YoY, owing to c.40% QoQ lower volumes to c.5,600 units. * Gross margin stands at 3.4%, much lower than our ex...
HCAR_2QMY23 Result Review, (AKD Off the Analyst's Desk Nov 16, 2022)
Honda Atlas Cars Limited (HCAR) announced it 2QMY23 result today where it posted LAT of PkR385mn (LPS: PkR2.7) compared to profit of PkR658mn (EPS: PkR4.6) in the first quarter. This brings cumulative earnings for 1HMY23 to PkR273mn (EPS: PkR1.9). The performance in the quarter is well below industry expectations due to a taxation charge of PkR544mn, culminating to an ETR of 342% for the quarter. Revenue for the quarter has decreased by 35%QoQ to reach PkR19.5bn, while also down by 25%YoY....
HCAR_2QMY23 Preview, (AKD Daily, Nov 16, 2022)
HCAR: 2QMY23 Preview We expect Honda Atlas Cars Limited (HCAR) to post NPAT of PkR68mn (EPS: PkR0.5) in 2QMY23, taking cumulative earnings in 1HMY23 to PkR726mn (EPS: PkR13.1). Revenue for the quarter is expected to decline by 23%YoY/34%QoQ, clocking in at PkR20.0bn. We expect margins for HCAR to contract to 4.1% compared to 6.3% in the last quarter.
- IMS Research Team
Oct’22 - Partial resumption of production has led to improved sales nu...
Latest automobile sales figures show some relief post the resumption in production; sales are down by 36% YoY, the MoM numbers were up 22% to 13,369 units. This is a similar number to the post pandemic lockdown in Sep’20. Despite the prevailing auto-parts import curtailment measures on CKD units, plant production resumption in Oct’22 has led to the improved production of 13,021 units (down 36% YoY but up 39% MoM). That said, elevated interest rates, PKR volatility and hampered production will...
- Abdul Ghani Mianoor
Pakistan Autos: Difficult year ahead; prospects likely to improve beyo...
We reduce our earnings forecast and Target Prices by an average of 7% and 9%, respectively, on account of persistent supply chain constraints and an uncertain near-term macroeconomic environment. Elevated car prices in a high interest rate environment have led to weak sales during FY23td, PKR volatility may continue to dampen industry margins in 1HFY23, before respite comes moving into FY24f. We trim our 2023-26f margins for the OEMs by an average 1ppt, and sales volume estimates by 5ppt on a...
- Abdul Ghani Mianoor
Honda Atlas: 1QMY23 Review - Strong beat from higher margin
HCAR has reported a NPAT of PKR658mn (EPS: PKR4.61) for 1QMY23, up c.3x QoQ. This is strong result from HCAR, where the deviation from our projected EPS of PKR0.20 is primarily due to higher-than-expected gross margin and lower taxation. 1QMY23 KEY HIGHLIGHTS: * Net revenue reached PKR30bn (in line with estimates), up c.40% YoY owing to c.25% higher volumes to c.9,400 and multiple price hikes from Nov’21. * Gross margin stands at 6.3%, higher than expectations, likely due to i) new Civi...
Pakistan Autos_Economic headwinds ahead, (AKD Daily, May 31, 2022)
Pakistan Autos: Economic headwinds ahead GoP recently banned import of Autos for an initial period of 2 months, although this might get extended further. We believe this to have a positive impact on the sales of OEMs, due to the fact that the market for imported vehicles is going to dissipate. PSMC will be the biggest benefactor of this given the relatively stronger competition from imported vehicles in the less than 1000cc segment. The local OEMs are exposed to exchange rate volatility, ma...
- Abdul Ghani Mianoor
Honda Atlas: MY22 review – earnings miss on higher opex
HCAR has reported a NPAT of PKR197mn (EPS: PKR1.38) for 4QMY22, down a sharp 78% yoy and 56% qoq. This takes MY22 EPS to PKR17.58, up 40% yoy. This is quite a weak result from HCAR, where the deviation from our projected EPS of PKR2.82 is due to higher-than-expected Opex. HCAR also announced a final DPS of PKR7.0 vs. our expected DPS of PKR6.50. 4QMY22 RESULT HIGHLIGHTS INCLUDE: * Revenues of PKR31bn (in line with estimates), up 35% yoy due to a 30% yoy increase in volumes to c 10,500 units ...
- Abdul Ghani Mianoor
Pakistan Autos: Prospects are weak; be selective
* In spite of the robust sales growth in 8MFY22, we downgrade target prices for our Autos Universe further by an average c.5%, on account of cost escalations due to surge in commodity prices, higher freight due to supply chain disruptions and weakening macroeconomic outlook. * Resurgence of supply disruptions following the Russia-Ukraine conflict has led to the use of costlier air shipments. Also, lagged price hikes will strain margins in the coming quarters, in our view. We cut our 202...
- Abdul Ghani Mianoor
Honda Atlas: 3QMY22 review – Earnings miss on significantly weak gross...
HCAR has reported a NPAT of PKR446mn (EPS: PKR3.12) for 3QMY22, down a sharp c.40% yoy and c.50% qoq. This takes 9MMY22 EPS to PKR16.20, up from an EPS of PKR6.29 last year. This is a significantly weak result from HCAR (lower than market consensus), where the deviation from our expected EPS of PKR7.58 is due to lower-than-expected gross margins. 3QMY22 RESULT HIGHLIGHTS: * Revenues of c.PKR30bn, which are up c.65% yoy due to a similar increase in volumes to c.10,375 units (up c.10% qoq); th...
- Abdul Ghani Mianoor
Honda Atlas: Signs of an early launch of the new Civic
HCAR’s stock price has rallied over 10% in the past week, where we think burgeoning expectations of an earlier-than-expected launch of the new Civic is at play. There have been reports of test drives of the car in Punjab. We understand that the market may now be anticipating the launch to happen during the April-July 2022 period (1QMY23); we have assumed the launch to be after September 2022 in our estimates. Globally, the new Civic model (11th generation) was launched during April 2021 and i...
- Abdul Ghani Mianoor
Honda Atlas: 2QMY22 Review: Weak margins despite new City launch; belo...
HCAR has reported a NPAT of PKR939mn (EPS: PKR6.58) for 2QMY22, flattish qoq, while up a sharp 43% yoy (distorted due to lockdowns last year). This took 1HMY22 EPS to PKR13.08, up from an EPS of PKR1.02 last year (loss incurred in 1QMY22 due to complete lockdown in April 2020). This is a relatively weak result from HCAR, compared with the strong earnings beat of INDU and PSMC, and lower than our expected EPS of PKR8.98, The variance is largely due to (i) lower-than-expected gross margins, (ii...
- Team AKD Research
Pakistan Auto_A paradigm shift in auto industry, (AKD Daily, Sep 30, 2...
AKD Daily Pakistan Auto: A paradigm shift in auto industry, As a proxy for latest developments, we breakdown the quarterly capex for the big three OEMs in order to highlight the paradigm shift in auto industry. So far, PSMC has incurred a capex of PkR3.4bn in 1HCY21 (+5.6xYoY), signaling new Swift in pipeline. INDU has spent PkR571mn in the latest quarter (FY21 capex: PkR2.5bn) whereas further PkR-5.1bn (US$300mn) is underway for capacity expansion in addition to US$100mn for the productio...
- Abdul Ghani Mianoor
Pakistan Autos: Downgrade estimates amid several uncertainties
* Despite the sustained upbeat sales growth from FY21, we downgrade our IMS Autos Universe target prices by an average c.30%, on account of slower deliveries due to supply chain disruptions, and margins remaining under pressure amid prevailing macroeconomic uncertainty. * Slower deliveries will also manifest in higher penal payments to customers. Thus, we have cut our 2022-23f volumes and margins for the OEMs by an average c.15% and 2ppt, respectively – which leads to c.30% lower earnin...
- Abdul Ghani Mianoor
Pakistan Autos: July sales update – Highest monthly sales since Oct' 2...
In July 2021, Auto industry sales rose a staggering c.80% mom to 24,918 units, on account of robust demand for vehicles of PSMC (up c.3.0x mom) and INDU (up 50% mom), likely due to pent-up demand in anticipation of price reductions for vehicles up to 1,000cc (as per Budget FY22, effective in July). On a yoy basis, industry sales surged 2.0x. Among INDU models, Yaris and Corolla volumes (up an average 35% mom) lifted overall sales to c.6,700 units. Hilux volumes rose to c.1,280 units (low base...
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