stocksmart pakistan weekly update - akd...

AKD Research [email protected]

+92-21-111-253-111

Weekly Review

Additional monetary stimulus from the central bank ahead of Eidul Fitr holidays set out a perfect opportunity for the investor to undertake some profit-taking, driving market lower -0.5%WoW (-171pts) to close the week at 33,837pts. Cyclical which gained in the expectation of rate cut became the obvious causality, as investors resorted to profit-taking, with Steel and Cements losing 3.8%WoW and 2%WoW, respectively. Recovering international oil pric-es extended support to E&Ps at home, with sector gaining 2.4%WoW. Market participation remained weak due to short trading hours, with average daily turnover declining to 205mn shares, down 6%WoW. Key news flows impacting the market during the week included: i) SBP slashing its policy rate by additional 1%, bringing the cumulative easing to 525bps over the past two months, ii) SC ordering the provincial gov’ts to open all shopping malls without any hindrance or obstruction while requiring strict adherence to standard operating proce-dures (SOPs), iii) National Account Committee (NAC) estimating real GDP growth for FY20 at negative 0.38%YoY, with all sub groups barring agriculture likely to witness declines, iv) the gov’t raising ~PkR200bn via Sukuk issue at a comparatively low rate of return of 6M KIBOR minus 10bps (vs. last issuance at 6M KIBOR plus 80bps) through competitive bidding at the PSX, and v) Moody’s Investors Service placing on review for downgrade both local and for-eign currency deposits highlighting the government’s weakening capacity to support banks in case of need, and vi) v) the gov’t raising PKR167.3 billion through T-bills, against the auc-tion target of PkR325 billion, with cut off yields declining (3M/6M/12M: 8.15/7.81/7.75%, down 24/19/0bps). Amongst the mainboard, top gainers during the week were i) ICI (+22.2%WoW), ii) IDYM (+13.8%WoW), iii) JDWS (13.2%WoW), iv) EFUG (+12.5%WoW), v) HCAR (11.3%WoW), while i) SHEL (-10.6%WoW), ii) CHCC (-8.9%WoW), iii) JLICL (-7.3%WoW), iv) MEBL (-6.8%WoW), and v) BoP (-6.5%WoW) were the major laggards.

StockSmart

AKD Equity Research / Pakistan

Pakistan Weekly Update

Important disclosures including investment banking relationships and analyst certification at end of this report. AKD Securit ies does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of the report. Investors should consider this report as only a single factor in making their investment decision.

Important disclosures

Copyright©2020 AKD Securities Limited. All rights reserved. The information provided on this document is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject AKD Securities or its affiliates to any registration requirement within such jurisdiction or country. Neither the information, nor any opinion contained in this document constitutes a solicitation or offer by AKD Securities or its affiliates to buy or sell any securities or provide any investment advice or service. AKD Securities does not warrant the accuracy of the information provided herein.

www.akdsecurities.net

AKD Securities

TREC Holder & Registered Broker

Pakistan Stock Exchange

REP-019

Find AKD research on Bloomberg

(AKDS<GO>), firstcall.com and Reuters Knowledge

With the FY21 budget expected in early Jun’20, budgetary expectations will likely dictate sentiment at the bourse. The gov’t faces a tough choice between managing its fiscal affairs prudently (i.e. delivering on IMF targets) and providing relief to the masses who are hit hard by the corona induced slowdown in the economy. Moreover, macro reads particularly on the external side (CAD widened to US$572mn in Apr’20 compared to a monthly average of US$334mn in FYTD, FX reserves fell US$141mn in the last week) could turn investors risk-off. Although the probability of going back to lockdowns is relatively low given the authorities unofficially pursuing herd immunity approach, left tail risk cannot be completely ignored which can arise from a sharp jump in Covid-19 cases as daily testing increases leading to a prolonged and stricter lockdown.

22 May 2020

Outlook

Source: PSX & AKD Research


Index & Volume Chart Universe Gainers & Losers Top-5 Volume Leaders

Symbol Volume (mn)

HASCOL : 69.65

TRG : 66.40

MLCF : 44.34

KEL : 39.68

UNITY : 30.25

33,805 34,159

33,933 33,837

33,600

33,700

33,800

33,900

34,000

34,100

34,200

-

50,000

100,000

150,000

200,000

250,000

18-May 19-May 20-May 21-May

(Index)(Shrs'000)

Ready Volume (LHS) KSE100 Index (RHS)

Indic e s KSE- 10 0 KSE- 3 0

This week 33,837 14,748

Last week 34,008 14,904

Change - 0.50% - 1.05%

Indic e s KMI- 3 0 Allsha re

This week 55,101 24,381

Last week 55,362 24,208

- 0.47% 0.71%

Mkt Ca p. PkRbn US$ bn

This week 6,472 40.22

Last week 6,429 39.96

Avg. Da ily Turnove r ('mn sha re s)

This week 205.52

Last week 219.10

Change - 6.2%

25,000

28,000

31,000

34,000

37,000

40,000

43,000

46,000

0

100

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9

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Oct-

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(Index)(share mn)

Volume in million (LHS) KSE-100 Index

-16.0%

-11.0%

-6.0%

-1.0%

4.0%

9.0%

14.0%

19.0%

24.0%

ICI

IDY

M

JD

WS

EF

UG

HC

AR

BO

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JLIC

L

CH

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AKD Securities Limited

22 May 2020

StockSmart


This Week’s Daily Reports

2

Pakistan Fertilizer: Risks neutralize subsidy euphoria (AKD Daily, May 21, 2020)

CY20 began on a weak note for the Fertilizer sector, which posted a cumulative 1QCY20 NPAT of PkR1.8bn (excl. FATIMA; result awaited), down 69% YoY, with EFERT and FFBL being lag-gards.

The GoP’s agriculture package entailing PkR37bn of subsidy for the Kharif season is expected to support overall urea offtake (1.0mn tons, down 24%YoY in 1QCY20) through CY20, providing a real hedge to an otherwise weak demand dynamic.

While sector dynamics remain immune from negative implications of COVID-19, a potential downside risk could emerge in the form of higher LNG availability (with lower international LNG pricing) causing surplus situation.

FATIMA is in the process of finalizing an agreement with ExxonMobil for import of LNG for onward forwarding to their plant sites, to benefit from the low international LNG prices (at around US$2-3/mmbtu).

With Fatima Fert and Pak Arab having a cumulative capacity of 538K tons rendered un-operational due to shortage of gas, where materialization of directly procured LNG could par-tially eliminate the need for subsidizing urea price. We foresee FFC to remain relatively well shielded even in the case of excess urea supply, underscoring our bullish stance.

Pakistan Autos: Balance sheets are ready for any rebound, (AKD Daily, May 20, 2020)

Coalescing around our expectations of tapered CAPEX (brought on by demand down-cyle) where three consecutive quarters (upto 1QCY20) of softened CAPEX bring the industry closer to maintenance levels (TTM outlay at PkR10.6bn) with PSMC/INDU/HCAR constituting 20/75/5% of period outlays (vs. CY14-18 avg of 41/43/16%), with INDU the only major OEM still incurring significant outflows

Concurrently, the industry’s TTM topline/gross profit levels have receded 32/52%YoY showcas-ing persistent strains on core profitability (four consecutive quarters of declining sales and gross profits), where players dealt with FX fluctuations drastically hiking retail prices coinciding with a period of demand weakness (monetary tightening, inflationary pressures, lower dispos-able incomes)

In terms of cash flows, net working capital outflows dragged operating cash flows for three consecutive quarters (June’19-Dec’1), improving in March’20. While slowing CAPEX helps in reducing outflows, all three major OEMs have now added leverage to their balance sheets (net borrowing inflow since Sept’19 at PkR32.6bn led by PSMC followed by HCAR).

We re-iterate our stance on strong catalysts in the macro domain (controlled inflation, low fuel costs, cratering cost of borrowing) supporting any recovery in consumer demand, however, present circumstances (COVID-19 containment, reopening and repercussions for aggregate durables consumption) are likely overshadow these positives.

Pakistan OMCs: Tough time to grow (AKD Daily, May 19, 2020)

Depressed volumes directly softened throughput levels, with 1QCY20 retail volumes at 3.SHEL/APL/PSO delivered throughput levels of 574/490k/523k/0mn tons, down 21%QoQ largely due to a 32%QoQ decrease in HSD, owing to players limiting product in storage to mitigate against fluctuating oil prices and COVID-19 containment restrictions put in place during the period

Company-wise, HASCOL/402k ltrs/outlet, moving -17.7%/-12.6%/-17.6%/-26.0%QoQ and -39.8%/-20.9%/-17.7%/-11.7%YoY taking total average industry throughput -22.5%QoQ/-19.4%YoY to 463K lts/outlet.

Sectoral demand figures indicate the hastening of an FO-lite downstream demand re-orientation (furthered by slowing retail outlet expansions), as transport-linked demand formed 99.6/90.2% of the total volumes of MS/HSD for Feb’20, while unlisted players continued to make inroads in share of listed players.

With volumes facing a downturn and outlet additions depleting mean throughput, slowing retail outlet additions are expected to prevail over the medium term, with OMCs focusing on pulling customers (through discounts, forecourt retail upgrades), in our view.

May 21, 2020

May 20, 2020

May 19, 2020


May 18, 2020

33,740

33,784

33,828

33,872

33,916

33,960

34,004

34,048

34,092

10

:15

10

:38

11

:02

11

:26

11

:49

12

:13

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:36

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:00

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:23

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:47

33,720

33,780

33,840

33,900

33,960

34,020

34,080

34,140

34,200

34,260

10

:15

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:38

11

:02

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:25

11

:49

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:36

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:00

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:23

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33,600

33,687

33,774

33,861

33,948

34,035

34,122

34,209

34,296

34,383

34,470

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:15

10

:40

11

:05

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:55

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:58

33,840

33,905

33,970

34,035

34,100

34,165

34,230

34,295

34,360

34,425

10:1

5

10:3

8

11:0

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11:2

6

11:4

9

12:1

3

12:3

7

13:0

0

13:2

4

13:4

7


22 May 2020

StockSmart


This Week’s Daily Reports

3

In this backdrop, PSO (TP: PkR203.5/sh, 26.2% upside) remains our top pick where company has already gained retail market share (40.9% in 10MFY20 against 37.6% in 10MFY19) while Sukuk II is expected to ease liquidity concerns of the company, allowing it the financial mus-cle to support its footprint.

Pakistan Economy: SBP moving along the curve, (AKD Daily, May 18, 2020)

The MPC of the SBP delivered yet another 100bps rate cut (5.5% cumulative cut since March’20), citing improved inflation outlook following May’20 steep reduction in the Gov’t administered fuel prices (~20%) and countering COVID-19 containment spillovers by en-hancing liquidity support to keep businesses afloat.

This bold move from the central bank underscores two important points, namely, the eco-nomic pain of COVID-19 and resulting health challenge may be more adverse than earlier expected. Secondly and arguably of greater heft, the IMF is more accommodative than usu-al, seconding much-needed stimulus to the economy.

While aggressive action hitherto has clearly narrowed room for further easing, we do not rule out additional monetary action yet, considering the high level of prevailing uncertainty (policy actions, re-opening, demand shocks, employment and recovery of cumulative con-sumption) due to COVID-19. Both length and intensity need to be closely monitored and may necessitate further monetary action.

That said, the exact course of monetary action will be determined by the i) parallel fiscal policy – gov’t slated to present FY21budget in early Jun’20, where soft fiscal targets may create room for further easing – and ii) how the external account fares going forward, where higher than expected deterioration could restrict the SBP from further easing.

With extended holidays looming, all eyes are set on Budget FY21, where comments from GoP functionaries, trade bodies and revenue authorities are likely to dictate sentiment at the bourse. In this regard, the GoP will have to triage the triple imperatives of taxation ex-pectations (of specific industries demanding relief), with IMF stipulations while mitigating harm from COVID-19 pandemic.


22 May 2020

StockSmart


4

Commodities

International Major Currencies

Source: Bloomberg

Source: Bloomberg

Major World Indices’ Performance

Source: Bloomberg

TRJ-CRB Index

Source: Bloomberg

PkR/US$ Trend

Source: Bloomberg

SPOT Units 21-May-20 15-May-20 WoW CYTD

TRJ-CRB Points 130.9107 124.7466 4.94% -29.54%

Nymex (WTI) US$/bbl. 34.26 29.43 16.41% -43.89%

ICE Brent US$/bbl. 35.29 31.51 12.00% -46.87%

N. Gas Henry Hub US$/Mmbtu 1.91 1.66 15.06% -8.61%

Cotton USd/Pound 67.35 66.3 1.58% -14.04%

Gold US$/Tr.Oz 1734.66 1743.67 -0.52% 14.33%

Sliver US$/Tr.Oz 17.1825 16.6109 3.44% -3.75%

Copper US$/MT 5417.5 5156 5.07% -11.90%

Platinum US$/Oz 840.62 789.47 6.48% -13.03%

Coal US$/MT 53.9 53.45 0.84% -32.37%

SPOT 21-May-20 15-May-20 Chg +/- WoW CYTD

Dollar Index 99.195 100.402 -1.207 -1.20% 2.91%

USD/PkR 160.775 160.350 0.425 0.27% 3.80%

USD/JPY 107.740 107.060 0.680 0.64% -0.80%

EUR/USD 1.099 1.082 0.017 1.56% -2.00%

GBP/USD 1.224 1.212 0.012 1.00% -7.69%

AUD/USD 0.657 0.641 0.016 2.49% -6.38%

NZD/USD 0.613 0.594 0.019 3.22% -9.11%

CHF/USD 0.966 0.972 -0.006 -0.61% -0.10%

CAD/USD 1.391 1.411 -0.020 -1.40% 7.10%

USD/KRW 1,231 1,231 -0.300 -0.02% 6.46%

CNY/USD 7.105 7.102 0.003 0.04% 2.03%

Country Bloomberg Code 21-May-20 15-May-20 WoW CYTD

Pakistan KSE100 Index 33,837 34,008 -0.50% -16.9%

Srilanka CSEALL Index 4,785 4,439 7.79% -21.9%

Thailand SET Index 1,321 1,281 3.12% -16.4%

Indonesia JCI Index 4,546 4,508 0.85% -27.8%

Malaysia FBMKLCI Index 1,452 1,403 3.47% -8.6%

Philippines PCOMP Index 5,604 5,542 1.13% -28.3%

Vietnam VNINDEX Index 863 827 4.32% -10.2%

Hong Kong HSI Index 24,280 23,797 2.03% -13.9%

Singapore FSSTI Index 2,555 2,524 1.26% -20.7%

Brazil IBX Index 34,269 32,671 4.89% -29.6%

India SENSEX Index 30,933 31,098 -0.53% -25.0%

China SHCOMP Index 2,868 2,868 -0.02% -6.0%

S&P SPX Index 2,972 2,864 3.77% -8.0%

DJIA INDU Index 24,576 23,685 3.76% -13.9%

NASDAQ Composite CCMP Index 9,376 9,015 4.01% 4.5%

UK UKX Index 6,022 5,800 3.82% -20.2%

Germany DAX Index 11,075 10,465 5.83% -16.4%

Qatar DSM Index 8,873 8,735 1.58% -14.9%

Abu Dhabi ADSMI Index 4,113 4,067 1.13% -19.0%

Dubai DFMGI Index 1,939 1,894 2.35% -29.9%

Kuwait KWSEIDX Index 6,633 6,633 0.00% 0.0%

Oman MSM30 Index 3,408 3,422 -0.40% -14.4%

Saudi Arabia SASEIDX Index 7,051 6,717 4.97% -16.0%

MSCI EM MXEF Index 932 901 3.37% -16.4%

MSCI FM MXFM Index 459 442 3.83% -21.6%

134.0

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22 May 2020

StockSmart


Chart Bank

FIPI Flows for the week

Advance to Decline Ratio

AKD Universe vs. KSE-100 Index

LIPI Flows for the week

Average PIB and E/Y differential

KSE-100 vs. MSCI-EM & MSCI-FM

-42%

-32%

-22%

-12%

-2%

8%

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KSE-All Share Index AKD Universe

(3,854)

(2,942)

(178)

(1,796)

(4,500)

(4,000)

(3,500)

(3,000)

(2,500)

(2,000)

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(1,000)

(500)

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18-May-20 19-May-20 20-May-20 21-May-20

(US$'000)11.37

(4.97)

(0.33)

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(5.02)

1.03 2

4.94

(6.0)

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KSE100

MSCI EM

MSCI FM

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Earning Yield PIB Yield

6

AKD Securities Limited StockSmart


Market PER Chart 2020

22 May 2020

AKD Universe Valuations

Source: AKD Research

Market P/BVS Chart 2020


Jan-

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(x)

21-May-20 2016 2017 2018 2019 2020F

EPS (PkR) 6.87 5.82 6.48 6.55 7.99

EPS chg (%) 2.67 (15.24) 11.33 1.10 21.90

EPS chg (%) ex-E&P 18.10 (24.93) 6.73 (0.50) 27.90

Book Value per Share (PkR) 39.20 41.91 44.60 49.63 53.89

Payout (%) 50.22 55.90 49.71 50.37 47.01

Valuations

Price to Earnings (x) 5.86 7.79 7.03 6.26 5.25

PER (Ex-Banks & E&Ps) (x) 5.47 8.09 7.41 8.19 8.29

Price to Book (x) 1.14 1.07 1.02 0.92 0.85

Price to CF (x) 8.44 10.51 8.02 10.05 8.25

Earnings Yield (%) 17.07 12.84 14.23 15.98 19.05

Dividend Yield (%) 8.66 7.94 7.33 7.46 8.20

EV / EBITDA (x) 5.82 5.98 6.37 5.93 5.08

Profitability

Return on Equity (%) 17.52 13.89 14.53 15.51 14.01

Return on Assets (%) 3.10 2.25 2.29 2.46 2.27

Chg in Sales (%) (14.62) 16.05 17.88 21.76 0.08

Gross Margin (%) 35.06 35.96 35.14 34.08 34.70

Operating Margin (%) 23.07 24.87 24.43 24.04 23.90

Net Margin (%) 15.39 11.24 10.62 10.36 10.15

7



AKD Universe Active Coverage Cluster’s Valuations

22 May 2020


Stock Symbol Price TP Stance

(PkR) (PkR) 19A 20F 21F 19A 20F 21F 19A 20F 21F 19A 20F 21F

Automobile and Parts

*Indus Motors INDU 981.06 1,375.00 Buy 174.49 68.34 102.62 5.62 14.36 9.56 1.93 1.78 1.60 11.7 2.5 4.1

Pak Suzuki Motors PSMC 169.86 130.00 Sell (35.45) (38.81) 1.73 n.a n.a 98.10 0.54 0.61 0.61 - - 0.3

Cements

DG Khan Cement DGKC 81.11 106.85 Buy 3.67 (7.94) 4.02 22.08 n.a 20.15 0.50 0.53 0.52 1.23 - 0.99

Lucky Cement LUCK 452.57 637.71 Buy 32.44 6.61 24.31 13.95 68.47 18.62 1.55 1.55 1.43 1.44 - 1.10

Maple Leaf Cement Factory MLCF 25.51 38.27 Buy 1.33 (4.23) 1.97 19.12 n.a 12.95 0.92 0.88 0.82 1.96 - 1.54

Fauji Cement Company Ltd. FCCL 17.31 18.98 Neutral 2.05 0.10 1.33 8.46 177.47 12.99 1.14 1.14 1.12 7.81 - 6.16

Pioneer Cement Limited PIOC 59.81 49.55 Sell 3.48 (7.54) (0.91) 17.19 n.a n.a 1.02 1.17 1.19 - - -

Cherat Cement Co Limited CHCC 84.85 69.14 Sell 9.98 (11.10) 1.66 8.50 n.a 51.05 1.40 1.72 1.66 1.07 - -

*Engineering

Amreli Steels Ltd. ASTL 34.70 49.00 Buy 0.11 0.29 2.74 313.99 120.13 12.66 0.84 0.84 0.79 - - -

Fertilizers

*Engro Corporation ENGRO 298.73 331.10 Buy 28.69 47.72 52.27 10.41 6.26 5.72 0.88 0.76 0.66 7.13 8.61 8.61

Engro Fertil izers Limited EFERT 61.31 55.51 Sell 12.63 8.75 8.31 4.85 7.01 7.38 1.89 1.85 1.83 21.20 13.05 13.05

Fauji Fert. Bin Qasim Ltd. FFBL 17.01 30.02 Buy (6.34) 0.14 1.55 n.a n.a 10.97 2.61 2.56 2.12 - - -

Fauji Fertil izer Company FFC 108.76 137.22 Buy 13.45 16.26 16.67 8.09 6.69 6.52 3.88 3.46 3.06 9.93 11.95 11.95

Fatima Fertil izer FATIMA 27.02 34.43 Buy 7.54 5.98 4.67 3.58 4.52 5.79 0.77 0.70 0.65 7.77 8.70 6.85

Oil & Gas

Oil & Gas Development Co. OGDC 112.91 172.20 Buy 27.53 24.92 20.70 4.10 4.53 5.45 0.68 0.61 0.56 9.86 5.60 6.59

Pak Oilfields POL 323.11 379.00 Buy 59.44 55.58 44.63 5.44 5.81 7.24 1.87 1.65 1.51 15.59 10.89 9.95

Pakistan Petroleum PPL 93.99 143.40 Buy 27.18 20.27 17.05 3.46 4.64 5.51 0.76 0.69 0.63 - - 4.09

Hascol Petroleum HASCOL 14.48 UR UR UR UR UR UR UR UR UR UR UR UR UR UR

Attock Petroleum APL 271.71 394.40 Buy 39.79 17.16 32.45 6.83 15.83 8.37 1.43 1.33 1.20 7.36 6.35 8.81

Pakistan State Oil PSO 161.23 203.50 Buy 22.55 8.12 27.14 7.15 19.85 5.94 0.64 0.65 0.58 5.17 - 5.69

*Power

Hub Power Co. HUBC 77.53 159.96 Buy 9.37 18.09 20.26 8.28 4.29 3.83 2.55 1.86 1.55 - - 9.03

K-Electric Co. KEL 3.10 UR UR UR UR UR UR UR UR UR UR UR UR UR UR

Kot Addu Power Company KAPCO 22.93 UR UR UR UR UR UR UR UR UR UR UR UR UR UR

Cable & Electrical Goods

Pak Elektron Ltd PAEL 22.65 24.40 Sell 1.68 0.21 2.15 13.48 107.86 10.53 0.37 0.36 0.35 - - 4.42

*Personal Goods

Nishat Mills NML 70.63 165.51 Buy 16.66 12.80 16.13 4.24 5.52 4.38 0.31 0.30 0.29 5.66 7.08 9.20

Nishat Chunian Ltd. NCL 30.79 60.53 Buy 13.19 5.87 7.08 2.33 5.25 4.35 0.48 0.46 0.43 13.00 7.31 8.94

Banks

Allied Bank Limited ABL 72.11 88.90 Buy 12.65 13.70 12.40 5.70 5.26 5.82 0.70 0.67 0.66 11.10 12.48 13.87

Bank Al Habib BAHL 51.02 65.00 Buy 10.07 9.10 9.10 5.07 5.61 5.61 0.92 0.81 0.74 6.86 7.84 7.14

Bank AlFalah BAFL 29.38 48.90 Buy 7.34 5.95 6.49 4.00 4.94 4.53 0.58 0.55 0.51 13.61 13.61 17.02

Habib Bank Limited HBL 97.30 154.40 Buy 10.45 16.10 15.40 9.31 6.04 6.32 0.64 0.59 0.55 5.14 6.17 7.19

Habib Metropolitn Bank HMB 28.50 45.70 Buy 6.34 7.30 6.80 4.50 3.90 4.19 0.64 0.55 0.49 8.77 8.91 9.52

MCB Bank Limited MCB 148.97 185.40 BUY 20.14 18.50 19.30 7.40 8.05 7.72 1.03 0.98 0.91 11.41 11.41 11.41

Meezan Bank Limited MEBL 58.82 124.60 Buy 12.12 14.60 15.60 4.85 4.03 3.77 1.20 1.03 0.89 8.50 10.20 10.20

National Bank of Pakistan NBP 26.81 45.60 Buy 7.79 10.50 11.80 3.44 2.55 2.27 0.23 0.21 0.19 - - -

United Bank Ltd UBL 98.98 167.20 Buy 15.60 18.90 18.40 6.34 5.24 5.38 0.63 0.59 0.56 12.12 12.12 15.15

The Bank Of Punjab BOP 8.70 13.90 Buy 3.09 2.80 3.00 2.97 3.86 3.64 0.49 0.44 0.41 8.62 14.51 17.42

UR - Under Review *earnings estimates are subject to revision due to COVID-19

EPS(PkR) PE(x) PB(x) DY(%)

8


22 May 2020

StockSmart


AKD Universe Coverage Cluster’s Performance


Stocks Symbol Price 1 Year 1 Year

21-May-20 1M 3M 6M 12M CYTD High Low

KSE-100 Index 33,836.61 3.1 -15.9 2.3 1.2 -16.9 43,218.7 27,228.8

Automobile and PartsIndus Motors INDU 981.06 24.2 -3.0 5.7 -18.2 -15.5 1253.12 721.99Pak Suzuki Motors PSMC 169.86 14.4 -22.1 11.6 -27.7 -26.4 310.11 125.42

CementsDG Khan Cement DGKC 81.11 2.1 18.3 50.8 46.2 9.2 87.90 42.31Lucky Cement LUCK 452.57 2.9 -7.6 29.8 27.0 5.6 566.47 305.00Maple Leaf Cement MLCF 25.51 1.4 7.8 61.6 25.1 10.2 30.74 13.79Fauji Cement Company FCCL 17.31 2.2 12.9 21.6 11.8 11.2 18.69 11.90Pioneer Cement Limited PIOC 59.81 41.3 112.8 167.0 186.4 96.2 63.79 17.37Cherat Cement Limited CHCC 84.85 5.0 55.8 178.5 163.8 59.9 96.16 24.78Gharibwal Cement GWLC 16.47 -3.3 38.5 81.8 63.1 20.8 18.95 8.19

EngineeringAmreli Steel Ltd ASTL 34.70 4.3 3.6 37.5 46.0 -3.9 41.61 15.83

FertilizersEngro Fertil izers Ltd. EFERT 61.31 6.0 -6.4 -13.8 -4.3 -16.5 78.57 51.00Engro Chemical ENGRO 298.73 1.4 -8.2 4.7 14.9 -13.5 366.00 234.78Fatima Fertil izer FATIMA 27.02 15.9 7.5 5.7 6.0 1.6 30.00 20.82Fauji Fert. Bin Qasim Ltd. FFBL 17.01 14.4 -6.7 0.0 -7.8 -12.9 24.54 11.90Fauji Fertil izer Company FFC 108.76 4.6 1.6 13.3 28.1 7.2 111.79 83.10

Food ProducersFrieslandcampins Engro FCEPL 65.41 0.6 -4.6 2.7 45.8 -19.7 86.18 43.98

Cable & Electrical Goods

Pak Elektron Limited PAEL 22.65 -0.8 -8.0 30.3 7.5 -16.3 29.50 14.32

Oil & GasOil & Gas Development OGDC 112.91 17.2 -14.1 -8.0 -17.2 -20.7 154.21 75.04Pak Oilfields POL 323.11 12.2 -19.8 -12.7 -23.1 -27.7 473.43 241.11Pakistan Petroleum Ltd. PPL 93.99 8.6 -26.8 -14.6 -40.3 -31.5 170.50 74.09Pakistan State Oil PSO 161.23 11.3 -11.4 20.9 -2.8 -15.9 216.54 114.47Attock Petroleum Ltd. APL 271.71 5.7 -22.2 -6.4 2.6 -26.5 394.43 219.13Hascol Petroleum HASCOL 14.48 -5.4 -35.4 -54.1 -78.6 -46.2 83.84 10.92

PowerHub Power Co. HUBC 77.53 0.5 -21.1 7.8 3.8 -16.9 103.21 57.38K-Electric Limited KEL 3.10 0.3 -23.8 -15.8 -23.3 -29.1 4.77 2.71Kot Addu Power KAPCO 22.93 5.2 -14.4 -23.9 -35.5 -27.3 40.13 15.01

Personal Goods

Nisaht (Chunian) Ltd. NCL 30.79 -9.5 -27.6 -18.7 -19.6 -27.8 47.63 23.78Nishat Mills NML 70.63 -3.4 -32.8 -15.7 -33.4 -33.5 117.81 53.00

BanksAllied Bank Limited ABL 72.11 -11.0 -22.4 -16.8 -31.0 -24.6 110.47 70.01Bank AlHabib Limited BAHL 51.02 -7.2 -35.5 -25.5 -33.3 -33.0 84.70 51.90Bank AlFalah BAFL 29.38 -17.4 -39.8 -31.1 -35.7 -35.7 52.99 29.96Habib Bank Limited HBL 97.30 -7.7 -41.5 -22.5 -18.6 -38.2 171.24 95.00Bank of Punjab BOP 8.70 -5.9 -33.3 -11.1 -25.4 -23.2 14.13 7.01Habib Metropolitan HMB 28.50 -0.9 -28.2 -9.5 -23.9 -21.6 42.00 28.01MCB Bank Limited MCB 148.97 -3.3 -28.1 -9.2 -11.7 -27.3 224.53 133.01Meezan Bank Limited MEBL 58.82 -7.0 -40.7 -24.6 -28.8 -38.2 106.21 56.00National Bank of NBP 26.81 -9.9 -37.7 -17.4 -28.5 -38.1 46.30 25.53United Bank Ltd UBL 98.98 -6.6 -43.2 -28.5 -32.4 -39.8 181.96 89.44

Absolute Performance (%)

9


22 May 2020

StockSmart


Economic Snapshot

Source: SBP, PBS & AKD Research

End Month Data Units Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20

Monetary Rates

T-Bills - 3M % 10.84 11.54 12.39 12.93 13.43 13.43 13.43 13.43 13.43 13.53 13.43 13.1 n.a

T-Bills - 6M % 11 11.68 12.46 12.98 13.48 13.48 13.48 13.48 13.48 13.48 13.48 13.15 n.a

T-Bills - 12M % 11.1 11.81 12.6 13.1 13.6 13.6 13.6 13.6 13.6 13.2 13.6 13.26 n.a

PIB 10Y % 13.06 13.5 13.68 13.67 13.29 12.18 11.3 11.35 11.09 11.04 11.18 10.16 8.47

KIBOR 6M % 10.99 11.92 12.86 13.3 13.82 13.65 13.08 13.48 13.5 11.23 13.23 12.34 12.08

Discount rate % 11.25 12.75 13.75 13.75 13.75 13.75 13.75 13.75 13.75 13.75 13.75 12.0 10.0

Policy rate % 10.75 12.25 13.25 13.25 13.25 13.25 13.25 13.25 13.25 13.25 13.25 11.0 9.0

Inflation

National CPI Inflation % 8.3 8.4 8 8.4 10.5 11.4 11.0 12.7 12.6 14.6 12.0 10.2 8.5

Core inflation (Urban) % 7.0 7.2 7.3 8.2 8.5 8.4 7.7 7.5 7.5 7.9 8.0 7.4 7.7

Core inflation (Rural) % 6.8 6.8 6.7 7.8 8.8 8.8 8.6 8.4 8.1 9 9.4 9.4 9.8

Food inflation (Urban) % 8.3 9.0 7.5 7.9 11.9 15.0 13.7 16.6 16.7 19.5 15.2 13.0 10.4

Food inflation (Rural) % 9.3 9.7 9.1 9.3 12.6 15.0 14.6 19.3 19.7 23.8 19.7 15.5 12.9

External Indicators

Export (PBS) US$ (mn) 2,094 2,102 1,717 1,894 1,859 1,769 2,024 2,011 1,993 1,970 2,140 1,814 957

Import (PBS) US$ (mn) 4,753 5,042 4364 4019 3658 3,785 4,074 3,940 4,037 4,037 4,185 3,316 3,088

Trade Deficit (PBS) US$ (mn) (2,659) (2,940) (2,647) (2,125) (1,799) (2,016) (2,050) (1,929) (2,044) (2,067) (2,045) (1,502) (2,131)

Export (SBP) 2,079 2,318 1800 2228 1,894 1,888 2,189 2,111 2,108 2,052 1,993 1,818 n.a

Import (SBP) 4,182 4,381 3997 4182 3,523 3,326 3,632 3,682 3,791 3,912 3,563 3,325 n.a

Trade Deficit (SBP) (2,103) (2,063) (2,197) (1,954) (1,629) (1,438) (1,443) (1,571) (1,683) (1,860) (1,570) (1,507) n.a

Home Remittances US$ (mn) 1,779 2,316 1,646 2,039 1,691 1,748 2,001 1,820 2,097 1,907 1,825 1,894 n.a

Current Account US$ (mn) (1,244) (1,089) (995) (678) (614) (284) 70 (364) (367) (534) (210) n.a n.a

Banking Sector

Deposits PkR (bn) 13,149 13,460 14,458 13,747 13,977 14,026 13,912 14,312 14,632 14,673 14,815 15,126 n.a

Advances PkR (bn) 7,860 8,022 8,097 7,991 7,994 7,975 8,019 8,095 8,158 8,164 8,212 8,259 n.a

Investments PkR (bn) 6,230 7,300 7,624 8,731 8,019 9,269 7,918 7,886 8,801 8,366 8,725 9,297 n.a

W. A. lending rate % 11.19 11.39 11.87 12.69 12.99 13.31 13.52 12.74 12.73 13.35 13.23 13.01 n.a

W. A. deposit rate % 5.81 5.34 5.71 6.18 6.47 6.52 6.69 6.73 6.65 6.95 7.00 6.91 n.a

Spread rate % 5.38 6.05 6.16 6.51 6.52 6.79 6.83 6.01 6.08 6.40 6.23 6.10 n.a

Public Finance

Tax collection PkR (bn) 277.60 330.10 508.40 277.30 298.60 383.10 n.a n.a n.a n.a n.a n.a n.a

Direct taxes PkR (bn) 78.50 112.00 251.00 95.90 88.00 165.30 n.a n.a n.a n.a n.a n.a n.a

Indirect Taxes PkR (bn) 199.10 218.10 257.40 181.40 210.60 217.80 n.a n.a n.a n.a n.a n.a n.a

Currency

Fx Reserves US$ (mn) 15,723 14,882 14,477 15,144 15,644 15,228 15,424 16,003 17,930 18,645 18,881 17,098 18,755

USDPkR - Interbank PkR/USD 141.33 146.17 156.41 159.19 158.24 156.33 156.04 155.40 155.01 154.74 154.34 159.02 164.43

10



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AKD Research Team

Analyst Tel no. E-mail Coverage

Usman Zahid +92 111 253 111 (693) [email protected] Executive Director Research

Ali Asghar Poonawala +92 111 253 111 (646) [email protected] E&Ps, Cable & Electrical & Automobiles

Hamza Kamal +92 111 253 111 (634) [email protected] Commercial Banks

Umer Farooq +92 111 253 111 (602) [email protected] Pakistan Economy, Textiles & Steel Sector

Shahrukh Saleem +92 111 253 111 (685) [email protected] Cement & OMCs Sector

AIlia Naeem +92 111 253 111 (603) [email protected] Fertilizer & Power Sector

Qasim Anwar +92 111 253 111 (680) [email protected] Technical Analysis

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22 May 2020

New Rating Definitions

Buy > 14.5% expected total return (Rf: 8.5% + Rp: 6%)

Neutral > 8.5% to < 14.5% expected total return

Sell < 8.5% expected total return (Rf: 8.5%)

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