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Analyst Opinions

BAHL - Bank AL-Habib Ltd.
Bank Al Habib Banking on non-core income
Muhammad Shahzad Khan    2/9/2022 3:51:28 PM
Bank Al-Habib Ltd (BAHL) announced its CY21 financial results. The middle tier bank reported bumper net earnings of PKR 18.7bn (EPS: PKR 16.83/sh) as against PKR.17.8bn (EPS:PKR16.03 /sh) reported in the same period last year. This is by far BAHL’s highest EPS in current history. The bank also approved highest yearly final cash dividend of PKR7/sh albeit payout ratio of 41.5% - a good jump from previous year. BAHL yields CY20/CY21 PE & PBV of 4.06x/4.56x & 0.9x/0.85x respectively. BAHL CY21 forecasted book value was PKR 91/sh.
MCB - MCB Bank Ltd.
MCB Bank Dividend stream continues
Muhammad Shahzad Khan    2/9/2022 12:02:24 PM
We expect MCB to report net earnings of PKR28.24bn (EPS: PKR23.83/sh) as against Rs.29bn (EPS: Rs.24.5/sh) reported in the same period last year. The bank is also expected to approve final cash dividend of PKR 6/sh (cumulative cash dividend of PKR 20/sh). MCB yields CY20/CY21 PE & PBV of 7.56x/6.80x & 1.35/0.95 respectively. MCB deciphers Justified PBV price of PKR 265/- which is at a 38% discount of current market price.
LUCK - Lucky Cement Ltd.
Improvement in Standalone Earnings
Iqra Nadeem    1/31/2022 1:03:29 PM
On consolidated basis LUCK earned PKR154.5bn in revenue, where as, standalone cement sales revenue recorded an increase of 20%yoy. Although, total dispatches declined by 6% to 4.70mn tons albeit decline in export volumes by 20%yoy on the back of increased coal and other input prices. Upcoming Coal based project,Cement expansion project & Commencement of Samsang brand mobile phone production will drove LUCK earnings ahead in coming quarters.
PSMC - Pak Suzuki Motor Company Ltd.
PSMC is a good play on 4Q sales growth!
Iqra Nadeem    1/26/2022 12:21:18 PM
A big shift is expected in PAK Suzuki’s CY21 earnings PKR 43.3/sh, & attractive valuation (2021/22e P/E: 5.21x/3.3x, respectively) looks like an interesting play. This also warrants company to pay cash dividend of PKR 3/sh. Recent increase in prices by 2.5-7% following the tax imposed in recent finance amendment bill is a positive omen for PSMC’s top-line. As per Pakistan Automotive Manufacturers Association (PAMA) update, PSMC remained volume leader in CY21 winning the lead in1000cc cars i.e. Alto & WagonR. Whereas bike business brought bright spots in total sales.
OGDC - Oil & Gas Development Company Ltd.
Earnings surge on international front
Iqra Nadeem    1/12/2022 3:01:30 PM
OGDC 2QFY22 net earning is predicted to be PKR 35bn (EPS: PKR8.36/sh & DPS PKR 3.11/sh) owning to increase in Oil prices internationally compelling with dollar appreciation.OGDC has increased its exploration expense where on going discoveries like Jardran West X-1 & X-04 at Mughalkot formation estimating trace of 2.39 and 7.08 mmcfd gas respectively & Wali-01 at Kawagarh in Hungu formation estimating trace of 13.65mmcfd gas & 1,010 bopd, will attracts investors interest.
PPL - Pakistan Petroleum Ltd.
PPL confident discoveries.
Iqra Nadeem    1/12/2022 2:55:59 PM
We estimate PPL 2QFY22E net earning at 15bn (EPS: PKR 5.79/sh & DPS PKR 2.89/sh) owning to dollar appreciation and expansion in mining business. PPL exploration expenses are projected to increase as PPL depleting gas reserves are at alarming stage. Hence, investors are eyeing on flagship discovery from ongoing discoveries at Musakhel Block (PPL holds 37%) & Kalat block~Pandrani X-1,(PPL holds 37%) .In term of EBITDA margins company has performed very well having 5 year CAGR of 35% Keeping same probability for FY22 which might turns into 62%, which is positive for PPL.
GHNL - Ghandara Nissan Ltd.
Countdown begins for CHERRY SUV
Faisal Shaji    11/16/2021 4:52:07 PM
GHNL reporting profits in FY22 so far with improved JAC sales. Company is trying to assemble Cherry SUVs. PAMA sales showing improved picture since few months.
EPCL - Engro Polymer & Chemicals Ltd.
Better margins
Faisal Shaji    11/16/2021 4:48:42 PM
EPCL is a consistent dividend payer. We see consistent PVC margins above $900/ton which is enhancing 4Q bottom line. EPCL deciphers CY21 PE of 3.8x and also an annual dividend yield of 20% - 21%. We expect EPCL to regain its Caustic soda sale in 2022.
HTL - Hi-Tech Lubricants Ltd
OMC stations in Punjab
Asad Rafiq    11/16/2021 4:43:44 PM
HTL is aggressively bringing OMC sites in Punjab and their petrol handling increasing every quarter. In a recent announcement - HTL got approval to enhance fuel outlets to 52 in Punjab province. We consider HTL in a growth phase as a new OMC.
PTL - Panther Tyres Ltd.
Tyres demand seems to accelerate.
Iqra Nadeem    6/21/2021 1:12:55 PM
Panther is a manufacturer of tyre & tubes & exporter of wheelbarrow to more than 12 countries. PTL enjoys a principle share in replacement market (RM) and having affiliation with OEMs. PTL entered into recent contract with AGTL for regular supply of tractor tyres. PTL can report FY21 EPS of Rs7.7/sh. PTL margins improved qoq basis.
MTL - Millat Tractors Ltd.
Tractor demand looks promising
Iqra Nadeem    6/3/2021 1:30:40 PM
Having an edge over highest market share i.e. more than 62% and being a leading tractor assembling company MTL remains top pick. The improved farmers income in the back of improved support price of major crops along with cheap agri loans has increased company’s sale in the ongoing fiscal. Exposure in passenger cars segment via 18% stake in Hyundai Motors (HMC), leverage free balance sheet, diversification in agri equipment, generators and batteries, and Rupee depreciation has further aided exports potential
FFBL - Fauji Fertilizer Bin Qasim Ltd.
Structural changes & DAP prices
Iqra Nadeem    5/26/2021 12:56:32 PM
The restructuring of FFBL operations & change of management resulted in cost saving and an increased dividend income stream from subsidiaries in CY20 & 1QCY21. As per recent analyst brief, prices of DAP will keep up its upward trend in up coming months. FFBL got its gas supply contract renewed from SSGC for next 5 years.
FCCL - Fauji Cement Company Ltd.
Investment opportunity
Faisal Shaji    5/24/2021 1:05:21 PM
In continuation to our earlier report, we stick to FCCL FY21 earnings estimation to ~Rs2.8sh (adj.) in the wake of increase in volume sales & slight increase in retention rates in northern zone in general and FCCL in particular as per our estimation. FCCL retention rates are slightly lower. However, we see less leveraged balance sheet is yielding lofted earnings.We also expect FCCL to pay cash dividend in lieu of earnings during FY21. FCCL yields FY21 & FY22 PE of 8.4x and 6.0x respectively.
KOHC - Kohat Cement Company Ltd.
Capacity absorption play
Faisal Shaji    5/18/2021 11:42:21 AM
We have tabulated FY21 earnings of KOHC. The company after carrying out expansion dispatched 6% - 7% of total cement produced till 9MFY21 in the country. KOHC supplied ~2.85mn tons out of total 43.33mn ton reported till 9MFY21. It’s a 63% growth from last year. We expect KOHC to report Rs17.4/sh in FY21 and a probable cash dividend of Rs2/sh. KOHC announced a greenfield project in Dist. Khushab. However, we see KOHC turnaround is being reflected from improved utilization and capacity increase.
GSKCH - GlaxoSmithKline Consumer Healthcare (Pak) Ltd.
Covid related usage
Faisal Shaji    4/29/2021 11:06:44 AM
GSKCH announced 1Q EPS of Rs5.25/sh. We see Panadol usage is massive during Covid treatment as being prescribed by Doctors to control fever. Also Azomax is one antibiotic which is prescribed during key period of Corona. This drug is manufactured at GSKCH licensed from Novartis. Also in other segment Semsodyne toothpaste sale is increasing.
CEPB - Century Paper & Board Mills Ltd.
Best company in paper and board packaging segment
Faisal Shaji    4/29/2021 10:46:25 AM
CEPB reported 9MFY21 EPS of Rs13.5/sh. CEPB is undervalued with FY21 PE of 5.5x. CEPB business season starts from September till March given supplies to customers. CEPB is price maker in packaging segment. Also the demand for packaging products enhanced during period of Covid19. Given lock down, restaurant businesses absorption to increase of home supplies.
STCL - Shabbir Tiles & Ceramics Ltd.
9MFY21 EPS Rs3.2
Faisal Shaji    4/29/2021 10:35:39 AM
Shabbir Tiles reported 9MFY21 EPS of Rs3.2/sh. STCL 9M sales reached Rs7.5bn. Stile brand doing good business recently given housing boom. After duties imposed on imported tiles, the local tiles in demand and STCL is doing roaring business with main Chinese competitor at Pindi Bhattian is a price maker. This indirect factor is favorable to STCL. STCL FY21 EPS could touch Rs4/sh. STCL offers FY21 PE of 6.5x.
MUGHAL - Mughal Iron & Steels Ind. Ltd.
Copper ingots story
Faisal Shaji    4/16/2021 2:33:38 PM
We see MUGHAL FY21 sales could reach Rs42bn with addition of copper ingots sales of around Rs8bn. The local prices of rebar increased many times and copper ingots prices at LME also increased. We see FY21 EPS of Rs 10 - Rs11 depending upon dilution and 4Q sales. Also we expect FY22 EPS could be in the range of Rs15 to Rs17/sh depending upon increase in copper ingots exports.
ASL - Aisha Steel Mills Ltd.
CRC sales increased during FY21
Faisal Shaji    4/14/2021 11:59:21 AM
ASL is riding on record CRC and HDGS sales to the industry especially auto and construction sector. Recently there is surge in auto sales in the country. Also there are many new players coming to Pakistan for manufacturing of SUVs and cars wherein we see bright prospects of supplies from flat steel producers. CRC & GP prices increased since Nov 2020 given rise in prices in China. We see ASL FY21 EPS could rise to Rs6/sh. We expect 3Q EPS to be Rs2.5/sh.
TRG - TRG Pakistan
Associate companies showing profits
Faisal Shaji    4/8/2021 2:22:26 PM
TRG Pakistan is providing call center services to international customers. TRG is managing 7000 employees, which is single largest strength in providing IT related services to international customers from Pakistan. As for valuations of TRG, TRGIL is an associate company. TRGIL made investment in e-telequote (categories related to e-health, medicare etc), IBEX (call center company already listed at Nasdaq) & Affiniti (Artificial Intelligence). TRG is an asset class for shareholders where they can mainly see top line growth. Since two fiscal years, the consolidated EBITDA is positive.
CHCC - Cherat Cement Company Ltd.
Maximum capacity utilization
Faisal Shaji    3/30/2021 2:56:40 PM
Retention rates in northern zone increases in line with retail prices. Northern zone players supplying cements to locally at better margins with enhanced capacity. CHCC entire capacity sales absorption will likely to propel its FY21 EPS. We already see increasing trend in cement dispatches due to construction of Dasu Dam and PMs housing program.
FABL - Faysal Bank Ltd.
Structural changes in bank
Faisal Shaji    3/30/2021 2:39:26 PM
FABL will soon be recognized as scheduled Islamic Bank. From directors report it is being ascertained that FABL operations will be converted into Sharia based given its majority holding of DMI Bahrain. FABL yield P/BV of 0.4x and provide long term attractive proposition.
PIOC - Pioneer Cement Ltd.
Local utilization increased
Faisal Shaji    3/30/2021 1:08:41 PM
PIOC cement dispatches increased in FY21 given infrastructure work at South Punjab districts of Mianwali etc. Govt. has carried out infrastructure projects in South Punjab wherein PIOC is located at Khushab. At present retention rates in northern zone increased & retail prices are hovering above Rs600/bag. Hence this is a turnaround in margins and earnings for PIOC