AKD Daily, Oct 29, 2013 PSMC: 9MCY13 Result Preview Pak Suzuki Motor (PSMC) is scheduled to announce its 9MCY13 result tomorrow. We expect the company to post NPAT of PkR1,568mn (EPS: PkR19.05) in 9MCY13 vs. NPAT of PkR1,176mn (EPS: PkR14.29) in 9MCY12 i.e. growth of 33%YoY. Overall sales volumes of the company came in at 59,292 units in 9MCY13 which were 25%YoY lower than the volumes recorded in 9MCY12. However, this should be countered by GMs of 6.4% in 9MCY13 vs. GMs of 4.6% in 9MCY12 going by 12% appreciation of the PkR vs. the JPY over the last year. In 3QCY13 alone, we expect PSMCs NPAT to clock in at PkR412mn (EPS: PkR5.00) vs. NPAT of PkR795mn (EPS: PkR9.65) in 2QCY13 (normalized EPS: PkR6.31 in 2QCY13 ex-sale of land). This translates into a decline of 48%QoQ (normalized earnings expected to down by 21%QoQ) on account of lower sales volumes. At current levels, our target price of PkR178/share implies a Buy stance, underpinned by an undemanding CY14F P/E of 5.6x.. NCL: 1QFY14 Result Preview NCL is scheduled to announce its 1QFY14 result tomorrow. In this regard, we expect the company to post earnings of PkR372mn (fully diluted EPS: PkR1.86) compared to earnings of PkR558mn (fully diluted EPS: PkR2.78) in 4QFY13, a decline of 33%QoQ. The sharp decline in profitability despite a 6.5%QoQ depreciation of the PkR vs the US$ is expected due to a 4%QoQ decline in export yarn price and an increase in power costs resulting in a decline of 3.1% in gross margins. Revenues are expected to increase by 1.1%QoQ to stand at PkR5,907mn compared to a top-line of PkR5,840mn during 4QFY13. There will be no support from dividend income during 1QFY14. Average cost of cotton inventory is also likely to have increased as there has been some procurement of higher priced fresh cotton stocks. We expect further erosion of margins in 2QFY14 as lower priced cotton inventory from last year runs out and full impact of increase in gas tariff for CPPs comes into play. However, valuation FY14F P/E 3.5x remains undemanding where our target price of PkR70.5/share (ex-bonus) offers 36% upside. FFC: 9MCY13 Result Preview Fauji Fertilizer Company (FFC) is scheduled to announce its 9MCY13 result on Oct 3013. We expect the company post NPAT of PkR14,090mn (EPS: PkR11.02) in 9MCY13, translating into a muted growth of 2%YoY, where a 19%YoY increase in distribution costs and 27%YoY increase in financial charges are expected to keep bottomline growth in check despite an 11%YoY increase in urea offtake. In 3QCY13, we expect FFC to post NPAT of PkR4,522mn (EPS: PkR3.55), a growth of 31%YoY led by a 27%YoY increase in urea offtake. At the same time, higher dividend income is expected to result in a sizable 141%YoY/87%QoQ increase in ‘other income’ in 3QCY13. We also expect the company to announce a cash payout of PkR3/share alongside the result, bringing cumulative 9MCY13 payout to PkR10.25/share. Going forward, a potential increase in gas tariffs figures as the key downside risk for FFC, where persistently low international urea price has reduced pricing power for local players. At current levels, FFC trades at a CY13F P/E of 6.5x and D/Y of 14%. Buy!
Posted on: Tue, 29 Oct 2013 07:54:38 +0000
Trending Topics
Recently Viewed Topics
© 2015