AKD Quotidian about — PSMC: 1HCY13 Result Preview
Karachi, August 16, 2013 (PPI-OT): Pak Suzuki Motor Company Limited (PSMC) is scheduled to announce its 1HCYI3 result on Monday, Aug 19’13.
According to AKD Securities expects the company to post NPAT of PkR95Smn in 1HCYI3 vs. NPAT of PkR1,369mn in 1HCY12, down 30%YoY. This translates into an EPS of PkRI1.64 in 1HCY13 vs. EPS of PkR16.64 in 1HCYI2. To recall, the company sold 41,326 units in the review period, down by 33%YoY (-ye 14%YoY normalized for the Punjab Taxi Scheme last year and +ve 7%YoY if sales of the now phased-out Alto are excluded as well).
In AKD Securities views, this is largely due to sustained competition from imported used cars. At the same time, AKD Securities expects gross margins to be at 5.1% in 1HCY13 where gross margins in the same period last year were at t2%. In 2QCYI3 alone, AKD Securities expects PSMC’s NPAT to clock in at PkR59Gmn (EPS: PkR7.24) vs. NPAT of PkR362mn (EPS: PkR4.40) in 1QCYI3, up 65%QoQ. In this regard, in 2QCY13 the company sold 20,222 units vs. sales of 21.104 units in the previous quarter.
However, profitability is likely to be sequentially higher where AKD Securities has assumed that PSMC will record net gains of PkR274.5mn (EPS impact: PkR3.34/share) which arose consequent to a land sale. The scrip has gained 77%CYTD, thereby outperforming the KSE-100 Index by 37% in the process. That said, AKD Securities believes upcoming results have the potential to excite where AKD Securities TP of PkRI78/share for PSMC (normalized CYI3F PIE: 7.4x) offers 15% upside. Accumulate!
HUBC: FY13 Result Preview
HUBC is scheduled to announce its FY13 result on Aug 19’13. AKD Securities expects the company to post NPAT of PkR10,208mn (EPS: PkR8.82) in FY13. a growth of 25%YoY. In 4QFYI3 AKD Securities expects the company to post NPAT of PkR2,780mn (EPS: PkR2.40), a decline of 13%YoY and a muted sequential growth of 5%QoQ, where working capital constraints led to a complete shut-down of the Narowal plant in 4QFYI3. worth -PkR92.4bn in lieu of circular debt payments from the GoP, thereby improving the company’s liquidity position and paving the way for a higher payout.
As a result AKD Securities expects the company to announce a final cash dividend of PkR4.5/share, taking cumulative payout for the year to PkRB/share. Going forward, AKD Securities expects higher earnings from the Narowal plant and an improved liquidity situation across the energy chain from an increase in power tariffs to sustain the company’s payout ability, where HUBC trades at an FYI4F DrY of 13% and provides an upside of 13% to AKD Securities TP of PkR78/share.