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Cement: dispatches touches new height of 4mn tons in Mar’17

 

Friday, 07 April 2017

 

By: Taurus Securities Limited

 

APCMA announced cement sales for the month of Mar’17 that witnessed record dispatches of 3.964mn tons, up 11%YoY. Consequently, industry utilization crossed 100% amid higher domestic demand. Cumulatively, cement dispatches during the 9MFY17 stands at 30.3mn tons vs. 28.3mn tons in SPLY, (up 7% YoY).

 

Local sales during 9MFY17 stands at 26.5mn tons (up 11%YoY), while exports are still doll-drum clocking-in at 3.75mn tons (down 15%YoY). We believe higher domestic demand coupled with hefty local margins influence companies to shift towards domestic market. On a sequential basis, local dispatches witnessed 18%MoM growth whereas exports declined 16%MoM.

 

The foremost reason behind swelling cement demand stems from increased infrastructure activities across country as the numbers reflects cement sales in North surging 24%YoY/19%MoM in March, while South marking 18%YoY/16% MoM hike in volumes during the period. On exports front, the prominent export market i.e Afghanistan witnessed trade disruption due to Pak-Afghan border management which resulted in 60%YoY and 16% MOM decline in dispatches during Mar’17.

 

We foresee domestic dispatches to remain upbeat due to promising local demand outlook, supported by i) Higher PSDP utilization that has been historically greater in 2HFY ii) implementation of Mega project under CPEC and iii) rising private sector activity due to lower interest rate environment

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Cement: anybody’s game

 

In a latest announcement, Bestway Cement (PSX: BWCL) has pulled out of buying the Dewan (PSX: DCL) cement’s Hattar plant, other assets and mining licenses. Dewan is now back in the market and it’s unclear how others who were in the running to acquire it are approaching this. Bestway is leading the market for now with the highest capacity in the sector but after expansions by other companies, it will move down a spot. Bestway was supposed to add 2.8 m tons to its capacity, including a million tons of Dewan.

 

Meanwhile, KP government has awarded 14 mining licenses (for limestone and shale) to set up cement factories in the province including to listed companies such as Bestway and Gharibwal, whereas some licenses were awarded to new firms. An investment of $2.5 billion is expected to enter the sphere through these licenses.

 

Full Story: http://www.brecorder.com/2017/04/10/342719/cement-anybodys-game/

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BMA Research

14 April 2017

 

Pakistan Cements

3QFY17E earnings dip likely to be short-lived

 

  • After witnessing a prolific 1HFY17, cement industry is set to take a breather in 3QFY17 where we expect BMA cement universe earnings (comprising of seven companies, 55% of industry capacity) dip by 4%YoY recording a PAT of PKR10.89bn.
  • Upward move in commodity prices(coal/FO up 62/107% YoY) seems to be the major culprit despite buoyant local demand and increased pricing power.
  • As a result, gross margins of the industry are expected to drop by 431bps YoY; nevertheless, operational efficiency improved during the quarter.
  • Amongst BMA universe, we expect MLCF to outperform the industry with 23% YoY growth in the bottom line while FCCL may remain a laggard (down55% YoY).
  • We remain positive on the sector’s performance in terms of profitability and growth given: i) seasonal recovery in dispatches and ii) possibility of another PKR10-20/bag increase in cement prices.

Our top picks are DGKC, PIOC and KOHC.

 

earning-estimates.jpg

 

Bullish outlook persists despite short-term blip:

The positive momentum in cement industry’s profitability is all set to slowdown in 3QFY17 where we expect BMA cement universe to take a dip in earnings by 4% YoY, recording a profit after tax (PAT) of PKR 10.89bn. Reversal in commodity prices seems to be the major culprit behind the expected decline in bottom line where despite buoyant local demand and increased pricing power of cement players, industry margins (proxy: BMA Universe) are expected to decline by 431bp to 42% in 3Q. Nevertheless, operational efficiency are expected to have improved during the quarter with Pioneer Cement (PIOC) and Cherat Cement (CHCC) taking the lead. Going forward, we remain positive on the sector’s performance in terms of profitability and growth as the seasonal recovery in dispatches sets-in. We also flag possibility of yet another round of increase in local cement prices by PKR10-20/bag in 4QFY17 owing to supply bottlenecks.

 

Volumes and price trend during 3QFY17:

As highlighted in our report dated 5-April’2017 (Title: Sanguine demand seen in 9MFY17; maintain Overweight), cement exports took a major hit (down 39% YoY) during 3QFY17 owing to border tension. However, local sales remained impressive with double-digit growth of 11% YoY despite limited activity owing to prolonged winter season. Total dispatches during the quarter recorded a growth of 4% YoY to clock-in at 10.5mn tons. Moreover, 3QFY17 witnessed another round of uptick in prices (up 1%/7% QoQ/YoY on average) as supply side pressure buildup amid buoyant demand (industry utilization rose to 91% during 3Q). On regional basis, cement prices in North jumped by 4% YoY while in South the increase was recorded at 8% YoY.

 

Margins dented but efficiency improved:

During 3QFY17E, gross margins of the industry are expected to drop by 431bps YoY to 42% on account of hefty increase in commodity prices. Coal prices surged by 62% YoY to stand at an average FOB price of USD82/ton during the quarter while furnace oil prices mounted by massive 107%YoY. Grid tariff also increased by 3% YoY on account of upward revision in fuel price adjustments as power generation cost increased. On a sequential basis, however, margins are expected to witness a jump of ~33bps. Two main contributors towards improved industry margins in 3Q will be PIOC and CHCC, as the former utilized its newly installed 12MW Waste Heat Recovery (WHR) for power generation reducing power cost by 45% while the latter tarted production with its new energy efficient line along with addition of a 6MW WHR to the power mix.

 

4% YoY earnings decline expected in 3QFY17, after prolific 1H:

On a cumulative basis, profitability is expected to drop by 29% in 9MFY17E. We expect industry's revenue (proxy: BMA Universe) to grow by 5% YoY in 3QFY17 largely driven by 4% YoY higher volumes and 7% YoY higher local cement prices. However, 13% YoY higher cost of production due to reversal in commodity rices is expected to drag the gross profit down by 5% YoY in 3Q. Selling and distribution expenses are expected to remain under control as export related expenses witnessed a sharp downfall. Financial charges for the industry are expected to remain flat in 3Q, however, finance cost has dropped by 27% in 9MFY17E. Amongst BMA universe, we expect Maple Leaf Cement Factory (MLCF) to outperform industry with 23% YoY growth in the bottom line while Fauji Cement (FCCL) may remain a laggard with 55% YoY decline in earnings compared to industry.

 

fccl.jpg

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Spectrum Research

03 May 2017

 

3QFY17: Cement sector profitability down by 10%YoY amid higher coal prices

 

During the quarter ended 3QFY17 cement sector's profitability significantly decreased by 10%YoY to PKR16bn due to higher coal prices and low cement demand. We have included 13 companies out of 17 listed cement companies to review sector performance.

 

Bottom-line drags down by 10%YoY

During 3QFY17, cement sector profitability substantially reduced by 10%YoY to PKR16bn as compared to PKR18bn reported in the SPLY. Sector's gross margin declined to 34% (-9%YoY) mainly due to higher coal prices (Richard Bay) which augmented by 59% to ~USD82/ton in 3QFY17 relative to ~USD52/ ton in 3QFY16.

 

Furthermore exports dispatches were also reduced by -39%YoY to 0.84mn tons as compared to 1.38mtons registered in the preceding year. Major reasons of decline in cement's export were tension between Pakistan and Afghanistan which hit the cement export via Pak-Afghan border. Furthermore, cheap Iranian cement is also giving tough competition to Pakistani exporters and capturing more market share in Afghanistan. Sector's finance cost also witnessed significant reduction of 33%YoY to PKR0.8bn however, PAT during 3QFY17 recorded at PKR16bn (-10%YoY).

 

9MFY17: Higher dispatches uplift profitability by 11%YoY

During 9MFY17, topline swelled by 10%YoY to PKR175bn due to higher dispatches (+6.9%YoY to 30.3mn tons) recorded during the same period. Demand from improved spending on housing infrastructure coupled with CPEC related development drives higher cement growth during 9MFY17. Gross margins of sector were meager declined by 1%YoY to 40% due to higher coal prices mainly in 3QFY17. In 9MFY17 net profit margins were stable at 25% (PKR 43.4bn) compared to SPLY due to lower financial cost (-26%YoY to PKR 1.8bn) amid low interest rate scenario in country.

 

Outlook

Going forward, higher PSDP allocation and strong economic performance to abode well for the cement sector. Currently federal government has released 68% (PKR 546bn) out of total PKR800bn allocated for PSDP. Going forward, Govt. is likely to allocate more fund for infrastructure whichwould drive local cement demand to higher level.

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BMA Research

04 May 2017

 

  • As per the provisional numbers, cement dispatches are expected to increase by 2%YoY to 3.6mn tons in Apr’17, mainly led by 11%YoY growth in local dispatches.
  • On a sequential basis, however, a reversed trend could be witnessed where exports are expected to increase by 16%MoM on account of easing tension on Afghanistan border while local dispatches are expected to contract by 10%MoM.
  • With budget FY18 announcement due on 26th May’17, we expect some positive measures to be announced by the government in order to protect the local industry in the wake of third expansion cycle undergoing in the industry (~27mn tons to be added by FY21).
  • The industry witnessed a decline of 11%YoY in profitability during 3QFY17 on account of massive 780bps drop in margins despite increase in operational efficiency.
  • We expect to witness some recovery in margins in 4QFY17 as coal prices stabilized. Moreover, several players are likely to book tax credits for BMR undergone during the year leading to elevated bottom-line.
  • Our top picks are PIOC, DGKC and KOHC.

Dispatches growth continued; all eyes on budget:

Cement sales are expected to register an increase of 2%YoY in Apr’17, taking cumulative cement dispatches in 10MFY17 to 33.9mn tons (+6%YoY). Industry utilization levels are expected to clock-in at 89% in 10MFY17 compared to 84% in the same period last year, hinting towards a dire need of timely expansions. With FY17 drawing close to its end and budget FY18 announcement due on 26th May’17, we expect some positive measures to be announced by the government in order to protect the local industry in the wake of third expansion cycle being undergone by the industry (~27mn tons to be added by FY21). The industry witnessed a decline of 11%YoY in profitability during 3QFY17 on account of massive 780bps drop in margins despite increase in operational efficiency. We expect 4QFY17 to witness some recovery in margins as coal prices stabilize. Moreover, several players are likely to book tax credits for BMR undergone during the year leading to elevate d bottom-line. Our top picks are PIOC, DGKC and KOHC.

 

Local sales lead the show in Apr’17; sequential analysis shows reverse trend:

As per the provisional numbers, cement dispatches are expected to increase by 2%YoY to 3.6mn tons in Apr’17, mainly led by 11%YoY growth in local dispatches while exports continued to drag heels (down 53%YoY). On a monthly basis, however, a reversed trend could be witnessed where exports are expected to increase by 16%MoM on account of easing tension on Afghanistan border, while local dispatches are expected to contract by 10%MoM. Industry utilization levels are expected to stand at 95% during the month. On a cumulative basis, cement sales are expected to register a growth of ~6%YoY in 10MFY17, as 11%YoY growth in local sales more than offset the impact of 19%YoY decline in exports. Cherat Cement (CHCC) is expected to outperform the industry with 38%YoY growth in dispatches, mainly on account of low base (capacity increased by 2x during FY17) while Kohat Cement (KOHC) will lag be hind due to the operational issues faced by the company during the year (teething issues post commencement of Waste Heat Recovery led to production hiccups in 1HFY17 while closure of Afghanistan border along with competition from Iranian cement in Afghanistan massively hit the exports of the company).

 

Favorable budgetary measures may keep the festive season alive:

With FY17 drawing to a close, we expect construction activity to remain strong in May’17 followed by dull activity in Jun’17 on account of the holy month of Ramzan and subsequent Eid holidays. Going forward, we expect government to come up with some favorable measures to protect the local industry from the threat of dumped Iranian and Chinese cement by increasing duty from 20% to ~40% (as demanded by APCMA). Moreover, PSDP allocation is also expected to remain on the higher side given election year considerations, boding well for the cement sector.

 

Earnings dropped in 3QFY17; PIOC outshined:

As expected, cement sector’s profitability took a breather in 3QFY17, dropping by 11%YoY to clock-in at PKR10.1bn (proxy: BMA Universe). On a cumulative basis, earnings dropped by 31%YoY to PKR21bn in 9MFY17. Higher cost of fuel and energy emerged as the major culprit where gross margins of the industry shrunk by massive 780bpsYoY to 38% in 3QFY17. Amongst BMA Universe, Pioneer Cement (PIOC) outperformed the industry with 19%YoY growth in earnings followed by Maple Leaf Cement (MLCF) with 17%YoY surge in bottom-line. On the other hand, Fauji Cement (FCCL) remained the laggard with 57%YoY decline in profitability followed by Kohat Cement (KOHC) with a 24%YoY dip in bottom-line.

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JS Research

Federal Budget FY18

 

Cements - Neutral to Positive: FED on cement has been increased from Rs1.0/kg to Rs1.25/kg, translating into an increase of ~Rs15/bag (after incorporating the impact of GST), which is likely to be passed on. Record PSDP allocation, focus on Diamer Bhasha Dam to be a positive for demand.

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Alfalah Securities

Federal Budget FY18

 

Cement

  • FED rate raised from PKR50/bag to PKR62.5/bag up 25%.
  • Federal PSDP raised by 43% to PKR1,001bn.

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AHL Research

Budget FY 17-18

 

Cements: FED has been increased by PKR 0.25/kg to PKR 1.25/kg translating into expected increase in cement prices by PKR 12.5-15.0/bag.

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BMA Capital

Federal Budget FY18

 

Cements (Positive):

The total PSDP allocation has been increased by 37% to PKR2,113bn (Federal PSDP budget up 40% to PKR1,001bn while provincial budget is increased by 35% to PKR1,112bn),where 67% of the total development outlay has been allocated to infrastructure development. Moreover, a number of pro-infrastructure development measures have been announced whereby (I) 40% credit guarantee will be provided by government for home financing up to PKR1mn loan amount, (2) the fixed tax per unit area imposed on builders and developers in FY17 budget has been withdrawn and (3) to promote infrastructure financing government will setup a number of new institutions including Pakistan Development Fund and Pakistan Infrastructure Bank. Federal excise Duty (FED), on the other hand, has been increased from PKR1/kg to PKR1.25/kg, which is largely a pass-on item (~PKR13/bag) and hence will have no significant impact on cement manufacturers, in our view.

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Summit Capital Research

Federal Budget Review FY18

 

Cements - Neutral to Positive

  • Total PSDP increased to PKR2.1tr out of which Federal PSDP is PKR1.0tr (up by 25%). Positive
  • Risk Sharing Guarantee Scheme for low income housing in which GoP would provide 40% credit guarantee to Banks and DFI’s up to PKR1.0mn and a total of PKR6bn is allocated for this scheme. Positive
  • FED rate on cement to PKR1.25/kg from PKR1/kg. Negative
  • Super tax of 3% is extended for FY18. Negative

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Pakistan Cements: FED impact passed-on; North prices increased by PKR20-25/bag

 

As flagged in our report titled ‘Strong demand continues; price weakness emerged in North’ (dated 5-Jun-17), cement manufacturers have decided to increase cement prices by PKR20-25/bag across North region, largely to pass-on the impact of increase in Federal Excise Duty (FED) by 25% to PKR1.25/kg in Budget FY18 (an impact of ~PKR15/bag including GST).

 

The increase in prices will be effective from today where the new price range will stand at PKR525-535/bag (a price level witnessed during 1HFY17) compared to prevailing price range of PKR473-517/bag (which came down in the wake of slow demand).

 

We believe the supply/demand balance post pick-up in construction activity after Ramzan and Eid Holidays will provide stability to the market prices, alleviating likelihood of any further downward pressure.

 

However, we highlight that the recovery in prices is unlikely to recover margins in 4QFY17 given:

  1. The retention price levels still remain towards the lower end compared to 3QFY17 as the increase in prices is on account of FED that does not fall in manufacturers’ pocket while excluding taxes the price level still remains ~PKR10-15/bag below the levels witnessed in 3Q.
  2. Cost of production has been increased for gas-based Captive Power Plants (CPP) as the gas prices have now been linked with RLNG prices (CPPs now being charged a price of ~PKR950-990/mmbtu compared to PKR800/mmbtu previously).

 

Moreover, a similar announcement may be witnessed by South region as well in the near-term to pass-on the FED impact where current prices hovering at a range of PKR570-585/bag.

 

That said, we believe North-based players are likely to witness some pressure on margins in 4QFY17; however, price stability in Southern region is likely to keep margins intact thus benefiting the South-based players. We flag Attock Cement (ACPL) as a major beneficiary of the current scenario.

 

BMA Research

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Cements: Paltry MoM growth in May overcomes the decline from April

 

APCMA released official dispatch numbers for May-17 which highlighted overall industry dispatches of 3.71mn tons depicting a meager 4/2% MoM/YoY growth. Following a prolific 1HFY17, the growth momentum slowed down at the turn of the year as heavy rainfall and winters took their toll. However, since March, numbers have continuously remained robust much to the delight of the industry players. Sequentially, dispatches to the local market kept things ticking, having increased by 2/ 11% MoM/YoY to clock in at 3.40mn MTs in May-17. On the other hand, exports remained an area of concern having nosedived by a hefty 45% YoY (up 21% MoM) to close at a paltry 0.31mn MTs.

 

The sector seems to be well placed in the current economic climate providing robust demand outlook from the domestic market and the player’s ability to influence the pricing mechanism. Hence, we maintain our Overweight stance on the sector.

 

Alfalah Securities

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Consensus Restored; Margins to Remain Upbeat

  • As per our channel checks, issues between the cement manufacturers have been successfully resolved and the cement prices have been revised upwards by PKR 20-65/bag to PKR 535/bag.
  • With Govt focus on PSDP (allocation up by +25%YoY to PKR 2.1trn) including PKR 111bn allocated for dams, we expect domestic demand will continue to witness double digit in FY18 which shall compensate plunge in exports sales.
  • Other budgetary measures include increase in FED by PKR 12.5/bag which we believe will be passed on to the consumers, however in case the industry decides to absorb the additional tax, the sector will witness ~8-9% p.a. earnings attrition in FY18. Other than that, continuation of super-tax will erode 4-4.5% of sectors earnings in FY17
  • We believe cement plays with first to materialize their expansion would benefit most. Our top picks in the sector include PIOC, CHCC, MLCF, with PT of PKR 205/sh, PKR 251/share, PKR 155/share, offering total returns of 43%, 37%, and 36%, respectively.

 

Background to recent price undercutting:

Since the beginning of 2017, North based cement manufacturers continued to undercut cement prices (ranging between PKR 20-60/bag) where the reduction in KPK’s cement prices was more pronounced. The discounts were initiated by CHCC to ramp up its sales as its expansion came online where domestic demand in the said region was already witnessing stagnation (+3% YoY growth in North’s local dispatches during 1Q2017) due to winter session besides plunge in exports to Afghanistan (52% YoY slump in exports to Afghanistan during 1Q2017) owing to border closure. The said pressures prompted other KPK cement manufacturers to further undercut prices to remain competitive resulting in PKR60-65/bag decline in the province, which eventually trickled down to Punjab resulting in PKR20-25/bag reduction, though, cement prices in South sustained their levels. As per our channel checks, the cement manufacturers have reached an agreement where cement prices have been revised upwards by PKR 20-65/bag to PKR 535/bag. This price reversal is likely to bode well for the sector as the margins are likely to be retained in a slower demand season.

 

Another Price Hike for FED Pass Through in the Offing:

The infrastructure theme remained the primary focus of the government in the recently announced federal budget FY18, where allocation of PSDP outlay has been increased by 25.7%YoY to PKR 2.1trn (against PKR 1.6trn). With allocation of more than PKR 111bn for hydropower projects (which include Diamer Basha, Dasu, Tarbela and Neelum Jhelum) and subsidized loans for the housing sector to address a backlog of 1mn units, we expect domestic demand growth to continue its double digit growth in FY18 that should compensate the plunge in exports. Other major budgetary measure for the cement sector included hike in FED by PKR 12.5/bag (or PKR 250/ton). Considering pricing power of the sector emanating from resolution of ongoing pricing issues we expect the hike in FED rates to be ultimately passed on to the consumers. In case the industry decides to absorb the additional tax, the sector will witness ~8-9% p.a. earnings attrition in FY18. Other than that, continuation of super-tax will erode 4-4.5% of sectors earnings in FY17.

 

Risks:

  • Delay in materialization of CPEC projects, fiscal deficit-low PSDP utilization.
  • Increase in energy costs (Coal, PET Coke, LNG, Gas, FO and Electricity tariff) can further erode margins of the sector.

 

Investment Perspective:

With domestic demand growth likely to witness significant accretion owing to materialization of CPEC projects (Dasu, Karot, Kohala and Suki Kinari) along with government’s focus towards infrastructure development and reducing housing backlog of 1mn units we expect domestic demand to grow with 5 year CAGR of 11%. While margins of the sector are expected to remain healthy owing to energy diversification, we expect Elixir Cement Universe to depict 5 year earnings CAGR of 15%. We believe cement plays with first to materialize expansion would benefit most. Our top picks in the sector include PIOC, CHCC, MLCF, with PTs of PKR 205/sh, PKR 251/share, PKR 155/share, offering a total return of 43%, 37%, and 36%, respectively.

 

ELIXIR Research

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JS Research

June 09, 2017

 

Cements: North manufacturers restore prices to offset recent decline

  • As per news reports, cement manufacturers have raised prices of cement in the North region by up to Rs55/bag. We believe that this move is motivated by a desire to curtail price decline in some key markets of the North region.
  • Our discussion with industry sources suggest that price rise across the board is not the same and increase in Maximum Retail Price (MRP) is minimal. Depending upon recent price falls, prices are restored to the range of Rs530-540/bag level.
  • Our discussions also suggest that news incorrectly highlighted that impact of increase in Federal Excise Duty (FED) has been passed on through this price increase.
  • Most of this price decline can be attributed to double whammy of dull offtake season pre Ramzan, declining exports and new supplies (Cherat Cement's new line creating ripples). This can be corroborated with decline in prices of markets where CHCC is most active.

We maintain our 'Overweight' stance on the sector, as we believe that long-term demand potential outweighs current short-term negativities surrounding the sector.

 

Our top picks are

  1. Pioneer Cement (PIOC TP: Rs190),
  2. Kohat Cement (KOHC, TP: Rs330),
  3. Lucky Cement (LUCK, TP: Rs1,046),
  4. Maple Leaf Cement (MLCF, TP: Rs155) and
  5. Fauji Cement (FCCL, TP: Rs54)

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JS Research

 

Earnings revised down

 

We update our investment case for Kohat Cement Limited (KOHC) to incorporate 9MFY17 results and recent changes in the sector. Our earnings are revised down by 8-15% throughout project period. Our earnings downgrade is motivated by (1)

subpar performance in 9MFY17, (2) deterioration in our outlook on the ability to pass-on cost hikes and (3) weaker than anticipated exports.

 

In-line with the earnings cut, we also tweak down our Dec-17 TP to Rs315 from Rs330 earlier for the company. Company’s 9MFY17 results had remained

disappointing as it posted EPS of Rs20.20, down 6.2% YoY, mainly due to weak sales numbers (exports decline) and declining prices in key markets of the North region where it operates. We expect dull period to continue in 4QFY17 as well mainly due to holy month of Ramzan. We also adjust our FY17 forecasts to incorporate Super Tax as envisaged in FY18 budget. The estimated impact is likely

to be Rs1.17/share and booked in 4QFY17.

 

‘Buy’ maintained with TP of Rs315

We keep our ‘Buy’ rating intact on the company with revised Dec-17 TP of Rs315, implying upside of 35% from current levels. The stock also offers attractive FY18 D/Y of 6.7% which compares favorably with the overall sector. It is pertinent to note that we have not incorporated company’s new expansion into our valuations. The management recently decided to set up a new brownfield cement line of 7,800tpd

along with a Waste Heat Recovery (WHR). As per initial discussions with the management, the plant is likely to be of Chinese make and will likely come online by the end of FY21. We estimate this project to cost ~Rs14-15bn. We wait for further clarity on the expected financing mix and flag this expansion as an upside risk to our base case. The stock currently trades at cheap FY17E/FY18F P/E of 9.0

and 8.1x respectively.

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Aba Ali Habib Research

13 July 2017

 

Pakistan Cement Sector’s Offtakes Jun’17:FY17 dispatches marginally up by 3.6% YoY.

  • During FY17 cement dispatches witnessed a growth of 3.6% YOY. Local dispatches posted a rise of 7.9% YoY to 35.60mn tons as against the 33.0mn tons in SPLY on ground of upsurge in construction activities led by CPEC projects. While Export portrayed a decline of 20.6% YoY to 4.6m ton primarily due to temporary closure of North/South dispatches observe a growth of 4.3%/0.7% YoY.
  • June Cement offtakes depicted sluggish performance, posting a significant dip of 27.8% MoM. Domestic dispatches plunged by 31.3% MoM primarily due to slower construction activities in Ramadan month coupled with Eid holidays. However, export offtakes gained it upward momentum and inclined by 11.1% MoM.
  • During Jun’17 CHCC witnessed a robust growth in volumetric sales among its peer, augmented by 39.9% YoY as its 2nd line commenced operation in Jan’17 followed by FCCL (25.2% YoY). On the flip side, DGKC, BWCL and KOHC observe massive fell of 31.9%/31.7%/16.2% YoY.
  • Top market Share leader during FY17 were BWCL contributing 18% in total market share (Local 18.0%, Export 20.9%) followed by LUCK 17% (local 16.1%, Export 23.6%) and DGKC 11% (local 11.0%, Export 12.4%).

IMG_5644.JPG

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Aba Ali Habib Research

03 August 2017

 

Cement Update July’17: Higher exports led to hefty cement dispatches in July’17

  • During July'17 KOHC witnessed highest volumetric growth of 89.36% MoM to 167.8k tons (Local 91.07% MoM and Export 61.60%), followed by CHCC with dispatches of 195.6k tons (Local 69.01% MoM and Export 89.73%) and FCCL with dispatches of 235.4 Ktons (Local 24.43% MoM and Export 218.13%).
  • Significant increase in cement offtake can be attributed to resumption in construction activities across country after observing a slow growth in month of Ramadan (Jun’17).
  • During the month exports depicted a noticeable performance where almost all player posted a high growth.

Cement July'17 Update_Page_1.png

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