1. finance
2. bank
3. bank account

Morning Briefing
Friday, October 10, 2014
ATRL: No trigger, but expansion to bring thrill
Market Review
KSE 100 Index
KSE 30 Index
KMI 30 Index
All Share Index
Market Cap. (Rs bn)
Volume Leaders
DFML
PASL
FCCL
GAIL
KTML
Last
Change
29,978.94 -124.29
20,296.32 -152.70
48,666.54 -247.10
21,930.92 -160.90
6,955.23
-51.97
Close
8.80
3.77
20.30
5.54
24.63
KSE Statistics
Volume
10,801,000
10,337,500
5,446,000
4,600,500
4,223,500
October 9, 2014
Indices
All Share Index
KSE-30TM Index
KSE-100TM Index
22,091.82
20,449.02
30,103.23
Turnover
All Share Index
KSE-30TM Index
KSE-100TM Index
112,359,660
32,469,700
56,756,210
Quice Food Industries Ltd
Saritow Spinning Mills Ltd
First Prudential Modaraba
First Pak Modaraba
Khurshid Spinning Mills Ltd
Chenab Limited
Al-Qadir Textile Mills Limited
Tri-Star Power Limited
First Tri-Star Modaraba
Tri-Star Polyester Limited
KSB Pumps Company Ltd
Packages Limited
ATRL
NRL
FY13A
46.03
35.37
ATRL
NRL
Average
Source: WE Estimates
4.4
5.5
4.9
EPS (Rs)
FY14A
FY15E
29.82
23.41
12.03
19.35
PE (x)
6.8
8.6
16.1
10.0
11.5
9.3
FY16F
33.64
30.46
6.0
6.4
6.2
Earnings to decline in 1QFY15
We expect earning to drop by 33% to Rs 403 million (EPS: Rs 4.73) in 1QFY15
against Rs 602 million (EPS: Rs 7.06) in 1QFY14. This is expected due to inventory losses; lower other income and exchange losses owing to depreciation of PKR.
However we expect company to realize gross refinery margin around $3.15/barrel in
1QFY15 would provide much needed support otherwise losses would be expected.
FY14 earnings drop by 35.2%
Board Meetings
Company
We initiate coverage on Attock Refinery Limited (ATRL) with a June'15 target price
of Rs 225/share, offering 11% upside from last closing price. We have used sum-ofthe-parts (SOTP) methodology to value ATRL's refinery operations and investments
in NRL, APL and other associated companies separately. Our DCF based target price
for June 30, 2015 for fuel segment stands at Rs 96/share while Rs 129/share is being
contributed by the investment portfolio. Hence our overall SOTP June 15 target price
for the company's stock stands at Rs 225/share. Our neutral view on the stock likely
due to lower gross margin and decline in other income expected as NRL has not
announced cash dividend in FY14. However, major expansion like installing Preflash Unit of 10,400 barrels/day enhances the crude refining capacity, installing an
Isomerization unit of 7,000 barrels/day for gasoline, establishing Diesel
Hydrodesulphurization (DHDS) unit of 12,500 barrels/day to reduce Sulphur contents to increase deemed duty would be positive for long term investors. We expect
completion of DHDS would increase deemed duty from 7.5% to 9% which would be
fruitful for the company but it would come online from the beginning of 2016. The
overall cost of this up-gradation project is around US$ 251 million with debt equity
ratio of 80:20, thus we anticipate company to skip dividend going forward. The share
is trading at FY15 prospective P/E multiple of 8.6x and 6x respectively offering a 7%
discount to the average refinery Stocks P/E of 9.3x and 6.2x respectively.
Date
10-10-2014
10-10-2014
10-10-2014
10-10-2014
10-10-2014
10-10-2014
10-10-2014
10-10-2014
10-10-2014
10-10-2014
14-10-2014
16-10-2014
Time
11:00
4:00
4:30
5:30
5:00
11:00
11:30
4:00
4:30
5:00
12:45
11:30
ATRL profitability decreased by 35.2% to Rs 2,543 million versus Rs 3,926 million
in FY13 mainly due to losses from core refining operation on account of lower gross
refinery margin (GRM) to 1.81/barrel in FY14 against 3.35/barrel in FY14.
However, non-refining income surged by 42.3% to Rs 1,847 billion compared to Rs
1,298 million in FY13. Overall, non-refinery income contributed Rs 21.66/share or
73% to company's FY14 earnings. Gross profit of the company dwindled by 96% to
Rs 137 million versus Rs 3,041 million in FY13 mainly due to lower GRMs during
the period.
Net sales swells by 7%
Net sales of the company hiked by 7.2% to Rs 175,068 million in FY14 compared
to Rs 163,301 million owing to the higher product prices. Volumetric sales surged
by 2% at 1.90 million tons in FY14 against Rs 1.86 million tons in FY13.
Disclaimer: All information contained in this publication has been researched and compiled from sources believed to be accurate and reliable at
the time of publishing. However, we do not accept any responsibility for its accuracy & completeness and it is not intended to be an offer or a
solicitation to buy or sell any securities. WE Financial Services & its employees will not be responsible for the consequence of reliance upon any
opinion or statement herein or for any omission. All opinions and estimates contained herein constitute our judgment as of the date mentioned in
the report and are subject to change without notice.
For live markets, historical data, charts/graphs and investment/technical analysis tools, please visit our website www.weonline.biz
We Research is Available on Thomson Reuters, Bloomberg, S & P Capital IQ, FactSet
Morning Briefing
Friday, October 10, 2014
Key Data
Pivot Analysis
Money Market
Company
CR
RSI
Buy 1
Buy 2
Sell 1
Sell 2
Pivot
T-Bills (3 Mths) 01-Oct-2014 9.97%
T-Bills (6 Mths) 01-Oct-2014 9.98%
T-Bills (12 Mths) 01-Oct-2014 9.99%
Discount Rate
20-Sep-2014 10.00%
Kibor (1 Mth)
03-Oct-2014 10.32%
Kibor (3 Mths)
03-Oct-2014 10.19%
Kibor (6 Mths)
03-Oct-2014 10.19%
Kibor (9 Mths)
03-Oct-2014 10.45%
Kibor (1 Yr)
03-Oct-2014 10.51%
P.I.B (3 Yrs)
03-Oct-2014 12.40%
P.I.B (5 Yrs)
03-Oct-2014 12.86%
P.I.B (10 Yrs)
03-Oct-2014 13.38%
P.I.B (15 Yrs)
03-Oct-2014 13.55%
P.I.B (20 Yrs)
03-Oct-2014 13.60%
P.I.B (30 Yrs)
03-Oct-2014 13.65%
Commodities
Crude Oil (brent)$/bbl
90.29
Crude Oil (WTI)$/bbl
85.87
Cotton $/lb
63.71
Gold $/ozs
1,225.20
Silver $/ozs
17.41
Malaysian Palm $
666
GOLD (PMEX) PKR
39,420
KHI Cotton 40Kg PKR
5,412
KSE 100 INDEX
29978.94
Attock Cement
172.00
Adamjee Insurance
46.23
Askari Bank
21.80
Azgard Nine
5.03
Attock Petroleum
546.18
Attock Refinery
202.03
Bank Al-Falah
29.23
BankIslami Pak
9.75
Bank.Of.Punjab
8.06
Fauji Cement
20.30
Fauji Fert Bin
40.12
Fauji Fertilizer
114.04
Habib Bank Ltd
200.84
Hub Power
65.10
ICI Pakistan
541.27
Jah Siddiq Co
9.90
Lucky Cement
399.06
MCB Bank Ltd
283.38
Maple Leaf Cement
28.04
National Bank
61.24
NIB Bank
2.02
Oil & Gas Dev. XD
247.62
P.S.O. XD
353.40
Sui North Gas
21.12
55.44
47.39
42.29
59.53
40.93
43.36
54.60
58.21
46.17
49.89
63.77
45.80
50.68
49.18
49.31
60.22
44.21
51.09
48.64
50.94
58.33
45.37
36.76
38.48
50.54
29,921
170.75
45.95
21.70
5.00
545.10
200.70
29.10
9.65
7.70
20.00
39.95
113.70
198.25
65.00
531.05
9.75
396.05
282.25
27.80
60.95
2.00
245.20
351.10
21.00
29,863
169.45
45.70
21.60
4.95
544.05
199.35
29.00
9.60
7.30
19.70
39.75
113.35
195.65
64.90
520.80
9.65
393.00
281.15
27.55
60.65
1.95
242.75
348.80
20.90
30,080
173.65
46.70
21.90
5.10
547.10
204.20
29.35
9.90
8.30
20.50
40.35
114.70
205.20
65.15
550.45
10.10
403.05
284.85
28.30
61.60
2.10
252.00
357.60
21.20
30,181
175.25
47.20
22.00
5.15
548.05
206.35
29.45
10.10
8.50
20.75
40.55
115.35
209.55
65.25
559.60
10.30
407.00
286.35
28.55
61.95
2.15
256.45
361.80
21.30
30,022
172.35
46.45
21.80
5.05
546.05
202.85
29.20
9.85
7.90
20.20
40.15
114.35
202.60
65.10
540.20
9.95
400.00
283.75
28.05
61.30
2.05
249.60
355.30
21.10
Portfolio Investment (U.S $ in million)
Yearly(Jul, 2014 up to 02-Oct-2014)
Monthly(Oct, 2014 up to 02-Oct-2014)
139.33
2.29
Daily (02-Oct-2014)
1.16
Total Portfolio Investment (12-Sep-2014)
5860
NCCPL (U.S $ in million)
FIPI (03-Oct-2014)
Local Companies (03-Oct-2014)
Banks / DFI (03-Oct-2014)
Mutual Funds (03-Oct-2014)
NBFC (03-Oct-2014)
Local Investors (03-Oct-2014)
Other Organization (03-Oct-2014)
-0.05
0.08
-1.02
-0.45
0.14
1.40
-0.11
CR = Yesterday's Closing Rate; RSI = 14 day RSI.
RSI Indication: Less than 30 Indicate oversold position & Greater than 70 Indicate overbought
position.
GDR Update
Symbol
$.Price
MCB (1 GDR= 2 Shares)
5.10
OGDC (1 GDR= 10 Shares) 26.85
UBL (1 GDR= 4 Shares)
2.50
LUCK (1 GDR= 2 Shares)
6.00
HUBC (1 GDR= 25 Shares) 15.87
WE Financial Services
Corporate Office
506, Fifth Floor,
Karachi Stock Exchange Building,
Stock Exchange Road,
Karachi - 74000,
Pakistan
URL: www.we.com.pk
PKR/S
261.28
275.12
64.04
307.39
65.04
Book Closure
From
To
D/B/R
Spot Date
AGM-EOGM
First Imroz Modaraba
10-10-2014
Pak Elektron #
10-10-2014
Gatron Industries
11-10-2014
Sazgar Engineering
12-10-2014
National Foods
13-10-2014
Goodluck Industries
13-10-2014
Kot Addu Power
14-10-2014
Habib-ADM
14-10-2014
Orix Leasing Pak
14-10-2014
Thatta Cement
14-10-2014
Biafo Industries
15-10-2014
Burshane LPG Pak
15-10-2014
Pak Datacom
15-10-2014
Safe Mix Concrete Products
16-10-2014
Ismail Industries
16-10-2014
Indications
# Extraordinary General Meeting
Company
22-10-2014
16-10-2014
20-10-2014
18-10-2014
22-10-2014
20-10-2014
22-10-2014
22-10-2014
21-10-2014
20-10-2014
23-10-2014
21-10-2014
22-10-2014
22-10-2014
23-10-2014
50(F)
35(R)
30(F)
10(F)
80(F)
20(F)
37.5(F)
40(F)
35(F)
II(F)
55(F)
18(F)
40(F)
25(R)
22.5(F)
26-09-2014
30-09-2014
01-10-2014
01-10-2014
01-10-2014
30-09-2014
02-10-2014
02-10-2014
01-10-2014
02-10-2014
02-10-2014
03-10-2014
02-10-2014
08-10-2014
22-10-2014
15-10-2014
20-10-2014
18-10-2014
22-10-2014
20-10-2014
22-10-2014
22-10-2014
21-10-2014
20-10-2014
23-10-2014
21-10-2014
22-10-2014
22-10-2014
22-10-2014
Disclaimer: All information contained in this publication has been researched and compiled from sources believed to be accurate and reliable at the time of publishing. However, we do not accept any responsibility for its accuracy & completeness and it is not intended to be an offer or a solicitation to buy or sell any securities. WE Financial Services & its employees will not be responsible for the consequence of reliance upon any opinion or statement herein or for any omission.
All opinions and estimates contained herein constitute our judgment as of the date mentioned in the report and are subject to change without notice.
For live markets, historical data, charts/graphs and investment/technical analysis tools, please visit our website www.weonline.biz
We Research is Available on Thomson Reuters, Bloomberg, S & P Capital IQ, FactSet