reports
- Team AKD Research
PSO 1QFY24 & PSMC 3QCY23 Result Previews, (AKD Daily Oct 19, 2023)
PSO – PAT to clock in at PkR18.3bn (EPS: PkR39.0) in 1QFY24: Pakistan State Oil (PSO) is expected to announce its 1QFY24 financial result on 20th October, where we expect the company to post PAT of PkR18.3bn (EPS: PkR39.0), higher by 14.0xYoY compared to LAT of PkR4.63bn (LPS: PkR9.85) in the quarter before. The said QoQ increase is majorly on the back of higher gross margins specifically on regulated products (MS/HSD) alongside significant inventory gains amid rising ex-refinery prices during t...
- Shahmir Malik
Pakistan Autos: Rising gross margins to improve sector profitability
* We expect the Japanese Auto OEMs to post NPAT of PKR579mn for the quarter ended June 2023, where the major contribution should come from INDU, while the other two OEMS are expected to post a loss. * Higher car prices are expected to translate into better gross margins for the entire industry. Although prices had been raised earlier during the year, the full realization of gross margins is expected to occur this quarter. * Despite improving margins, low volumes and persistently hi...
- Shahmir Malik
Pakistan Autos - June 2023 - Modest recovery
Auto industry sales volumes displayed a moderate recovery, with a 10% MoM increase to reach 6,034 units. However, there has been a significant decline in sales by 79% YoY basis. The industry faced numerous challenges throughout the year, starting from raw material shortages due to import restrictions, PKR depreciation resulting in cost overruns, and demand destruction caused by rising interest rates and multi-decade high inflation. Consequently, vehicle sales in FY23 witnessed a substantial d...
- Shahmir Malik
Pakistan Autos - May 2023 - Improved PSMC sales lift industry volumes
Sales volumes in the auto industry have experienced a moderate recovery, with a MoM increase of 19% to 5,290 units. However, sales have decreased by a significant 77% YoY. The overall increase in production and sales volumes by PSMC has contributed to the sector's improvement on a MoM basis. Excluding PSMC, industry volumes have declined by 22% compared to the previous month. INDU: In the month of May'23, INDU volumes contracted by 12% MoM and 71% YoY, amounting to 1,718 units. All INDU’s var...
- 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...
- IMS Research Team
Pakistan Suzuki: 1QCY23 Review - Amplified FX losses slash equity furt...
Pak Suzuki Motor Co. (PSMC) has posted a massive net loss of PKR12.9bn (LPS: PKR156.94) in 1QCY23, down from a loss of PKR3.8bn (LPS:46.55) in 4QCY22. The loss came in higher than our expected LPS of PKR122.47, where the major deviation stemmed from lower than expected gross margins and high finance costs. KEY RESULT HIGHLIGHTS FOR 1QCY23: * Revenue clocked in at PKR 21.8bn, down 54% YoY and 64% QoQ. This is higher than our expected topline of PKR20.9bn. The decline can primarily be attribut...
- Abdul Ghani Mianoor
Pakistan Suzuki: 3QCY22 Review - Hefty finance costs drag PSMC into lo...
Pak Suzuki Motor Co. (PSMC) has posted a Net Loss of c.PKR2.5bn (LPS: PKR30.25) in 3QCY22, from a NPAT of c.PKR1.0bn (EPS: PKR12.07) in 3QCY21 and c.PKR0.4bn (EPS: PKR5.38) 2QCY22. This takes 9MCY22 net loss to c.PKR2.5bn (LPS: PKR30.46). The 3Q result is significantly worse than our expected EPS of PKR3.18, owing to a sharp rise in finance costs. KEY RESULT HIGHLIGHTS: * Net revenue of PKR29.8bn (in line with expectations), down a sharp 41% YoY, majorly owing to a 24% YoY contraction in vol...
- 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
Sep’22 Result Preview - Administrative measures will push massive earn...
* For Sep’22 results, we expect IMS Auto Universe combined net profit to plunge a sharp 73% YoY to PKR2.0bn, largely owing to administrative measures imposed by the SBP to curb CKD kit imports. Lower gross margins will also contribute to this decline. * The Sep’22 quarter was marred by plant shutdowns, which resulted in a 53% decline in sales compared to last year (sales down 52% QoQ). Although commodity prices continued to slump, implying positives for input pricing, lower volumes are ...
- Abdul Ghani Mianoor
Pakistan Auto Sales: Admin measures continue to curtail demand in Augu...
Latest automobile sales print indicates another sharp slump in demand of 46% YoY (down a further 2% MoM) to c.11,650 units, continuing its trajectory from the previous month that is similar to pandemic lockdown in Jun’20, largely owed to production constraints. The ongoing auto-parts import curtailment measures taken by the SBP, coupled with recent floods impacting supply has led to the decline in production during Aug’22. Also, high interest rates, PKR volatility, potential further price hik...
- Abdul Ghani Mianoor
Pakistan Suzuki: 2QCY22 review – Results beat our expectations on bett...
Pak Suzuki Motor Co. (PSMC) has posted a NPAT of c.PKR0.4bn (EPS: PKR5.38), up c.5% YoY and from a LPS of PKR5.59 last quarter. This takes 1HCY22 net loss to PKR17mn (LPS: PKR0.21). The 2Q result significantly beats our projected LPS of PKR7.12, owed to higher-than-expected gross margin and significant other income. KEY RESULT HIGHLIGHTS: * Net revenue reached an all-time high of c.PKR65bn (broadly in line with expectations), owing to record volumetric sales of 40,860 units. The surge in sa...
Pakistan Autos_Projections incorporating recent macro-economic develop...
AKD Daily Pakistan Autos: Projections incorporating recent macro-economic developments We revisit our investment case for the OEMs under our coverage. Incorporating recent macroeconomic developments, with RF of 15.5% and USD/PkR parity of 198 for FY23 and 210 for FY24. Incorporating these assumptions, we have revised our target prices for PSMC, HCAR and INDU for Jun’23, now PkR165/sh, PkR172/sh and PkR1,392/sh respectively. Demand for the automobile industry is expected to reduce in FY23, ...
Pakistan Autos_Sales remain buoyant in May'22, (AKD Daily, Jun 14, 202...
AKD Daily Pakistan Autos: Sales remain buoyant in May’22 The total industry sales in May’22 clocked in at 28,283 vehicles (+39YoY/+2%MoM), consisting of 19,394 passenger cars (+50%YoY/+4%MoM), 3,497 LCVs (+27YoY/-11%MoM), and 426 trucks (+18%YoY/+2%MoM). Total industry sales for 11MFY22 clocked in at 307,873 units (+42%YoY), consisting of 210,629 passenger vehicles (+51%YoY), 40,263 LCVs (+44%YoY) and 5,106 trucks (+53%YoY). The volumes have continued to show a strong growth in the curren...
Pakistan Autos_Seasonal decline in Ramazan
The total industry sales in Apr’22 clocked in at 27,669 vehicles (+25%YoY/-17%MoM), consisting of 18,625 passenger cars (+29%YoY/-18%MoM), 3,745 LCVs (+34YoY/-14% MoM), and 397 trucks (+41%YoY/-21%MoM). The decline in volumes is attributed to the general slowdown in Ramadan hours and production halts due to Eid holidays. 10MFY22 total industry sales clocked in at 279,329 units (+42%YoY), consisting of 191,235 passenger vehicles (+51%YoY), 36,499 LCVs (+44%YoY) and 4,659 trucks (+56%YoY). The...
- Abdul Ghani Mianoor
Pakistan Suzuki: 1QCY22 review – longer lead times resulted in a loss
Pak Suzuki Motor Co. (PSMC) has posted a 1QCY22 Net loss of c.PKR0.5bn (LPS: PKR5.59), down from a NPAT of PKR0.8bn (EPS: PKR9.45) in SPLY and down from an EPS of PKR5.93 in 4QCY21. The result misses our projected EPS of PKR5.95, where the variance primarily stems from higher-than-expected finance costs and lower other income. This is the first quarterly loss since 3QCY20. KEY RESULT HIGHLIGHTS FOR 1QCY22: * Volumes increased by a sharp c.30% yoy (down c.5% qoq) to c.36,700 units in 1Q, whic...
- Abdul Ghani Mianoor
Pakistan Autos: March – Industry sales sustain robust growth momentum
In March 2022, Auto industry sales rose by a sharp c.30% yoy and c.25% mom to c.27,000 units, largely led by the Economy segment, which was followed by INDU (record monthly sales). Thus, 9MFY22 sales clocked in at c.205,000 units (up a strong c.50% yoy). Among INDU models, combined volumes of the Premium segment cars, Fortuner and Revo, increased by c.35% yoy, while combined Corolla & Yaris volumes remained flat yoy. We assume slowdown in Yaris sales to have likely dragged the combined sales...
- 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
Pakistan Suzuki: 4QCY21 review – Earnings miss due to sequential decli...
Pak Suzuki Motor Co. (PSMC) has posted a 4QCY21 NPAT of PKR0.5bn (EPS: PKR5.94), down a sharp c.60% yoy and c.55% qoq. This takes the net profits in CY21 to PKR2.7bn (EPS: PKR32.56). The result misses our projected EPS of PKR8.12, where the variance primarily stems from lower-than-expected gross margins. For the first time since CY18, PSMC announced a final dividend, of PKR6.50/sh. KEY RESULT HIGHLIGHTS FOR 4QCY21: * Volumes increased by a sharp c.70% yoy (down c.10% qoq) to c.34,250 units i...
- Team AKD Research
Pakistan Autos_The year-end seasonality kicks in (AKD Daily, Dec 14, 2...
AKD Daily Pakistan Autos: The year-end seasonality kicks in The total industry sales in Nov’21 clocked in at 23,863 units (+32%YoY) compared to 26,847 units in Oct’21 (-11%MoM) owing to the year-end seasonality factor. The sales consisted of 15,351 passenger cars, growing by 29%YoY but down 12%MoM. Other sales consist of 3,363 LCVs (-6%MoM/+28%YoY), 492 trucks (+12%MoM/+93%YoY) and 4,617 tractors (-14%MoM/+43%YoY). 5MFY22 total industry sales ballooned by 55%YoY to stand at 133,101 unit...
- Team AKD Research
Pakistan Autos_The new talk of the town Swift (AKD Daily, Dec 07, 2021...
AKD Daily Pakistan Autos: The new talk of the town Swift As a proxy, we breakdown the quarterly capex for the big three OEMs in order to highlight the upcoming developments in Pakistan’s auto industry. PSMC has incurred a capex of PkR4.5bn in 9MCY21 (5.7xYoY), signaling the new Swift in pipeline which is expected to be launched in 2HCY22. The capex of INDU in 1QFY22 has declined slightly to PkR437mn in contrast to average quarterly capex of PkR614mn in FY21 which signals that the new capaci...
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