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Tuesday, February 20th, 2018

Morning Briefing for August 27, 2012 – Standard Capital

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by August 27, 2012 Brokerage

Karachi, August 27, 2012 (PPI-OT): Pak Suzuki reports better sales in 1HCY12

Pak Suzuki vowed investors with 57% hike in turnover reporting Rs 36 billion as against Rs23 billion of sales during the corresponding period last year.

According to Standard Capital, the company reported profits after tax of Rs 1.36 billion (EPS: Rs 16.64) as against Rs 278 million (EPS: Rs 3.39) reported in 1HCY11 hence achieved 391% growth in net profit.

Robust sales performance

PSMC sales increased to a huge Rs.36 billion showing 57% y-o-y growth in the wake of exorbitant increase in variants prices of Suzuki Liana and Swift models as well as budget class 800cc cars like Suzuki Mehran and 1000cc car variants such as Khyber and Cultus. High end car prices were revised several times by the company as well as consumption was also increased. In term of high end cars, Suzuki Swift, witnessed around 70% growth in production being 4376 units this year whereas production was 2578 units last year whereas sales growth has been witnessed at a rate of 73%. However, Suzuki Liana performance was not that fascinating as it reported 46% decline in production from 614 units in CY11 to 334 units this year and sales declined by 4%.

While in budget class category, Suzuki Mehran production up by 30%, reportedly 33,839 units this year whereas 25,935 units were produced in the preceding year.

The manufacturing cost also increased by 20% which is line with sales and the factor constituting this increase was the swelling of PKR – JPY parity. The other operating income also hiked by 23%.

Valuation strategy

PSMC yields FY12 PE of 3x whereas PE of INDU yields 5x and wherein Standard Capital recommends BUY since auto assembles usually yield PE multiple of 5x- 6x (if Standard Capital takes aside tractor manufacturers).

PSMC (Rs.000′) 1HCY12 1HCY11 Chg.
Sales

36,471,418

23,250,706

57%

COGS

34,219,430

22,427,028

53%

Gross Profit

2,251,988

823,678

173%

Dist. Cost

152,636

139,700

9%

Admin Exp.

423,288

352,864

20%

 

1,676,064

331,114

406%

Finance Cost

6,753

9,259

-27%

Other Op income

332,264

270,981

23%

 

2,001,575

592,836

238%

Other Exp.

138,109

46,840

195%

PBT

1,863,466

545,996

241%

Tax

494,129

267,107

85%

PAT

1,369,337

278,889

391%

EPS

16.64

3.39

391%

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