AKD Quotidian about — HBL: 9MCY11 Result Preview

Karachi: Habib Bank Ltd (HBL) is scheduled to announce its 9MCY11 result on Oct 15’11. On a consolidated basis, AKD Securities expects HBL to post NPAT of PKR14.8bn (EPS: PKR13.45) in 9MCY11 against NPAT of PKR12.2bn (EPS: PKR11.04) in 9MCY10, translating into robust 22%YoY growth.

According to AKD Securities does not expect any payouts with the result. Earnings momentum should be driven by strong 17%YoY Nll growth and 27%YoY non – interest income growth (primarily Fx income), which should counter 58%YoY increase in provisions and a 13%YoY increase in admin costs. On a sequential basis, AKD Securities expects HBL to post NPAT of PKR4.8bn (EPS: PKR4.37) in 3QCY11 against NPAT of PKR5Mbn (EPS: PKR4.55) in 2QCYII, down 4%QoQ primarily due to flat Nll (sequentially lower NIMs) and higher provisions (ageing).

Going forward, while AKD Securities sees NIM compression ahead for HBL, AKD Securities believes the bank can compensate through asset expansion and improvement in asset quality. Furthermore, capital gains can potentially surprise on the upside considering stock of PIBs on Jun 30’11 (PKR25bn) stood at 2.4% of assets/25% of equity. Recognition of suspended mark-up (-PKR600mn) on anticipated conversion of circular debt exposure into PIBs is also a potential stock price trigger. HBL trades at a CY12F P/B of O.98x, PER of 6.Ox and dividend yield of 6.9%. AKD Securities’ target price of PKR130/share offers an upside of 12%. Accumulate!

PTC to post NPAT of PKR2.2bn (EPS: 0.43) in 1QFY12
PTC is to announce its 10FC12 result on Oct 18’11 where AKD Securities expects the company’s consolidated NPAT to stand at PKR2.2bn (EPS: PhR0.43), which would denote a 1OWYoC fall compared with IOFCI1. Standalone NPAT is forecasted to stand at PKR1.5bn (EbS: PKR0.29), which is a fall of 2b%CeC. AKD Securities does not expect any cash payout with the result.

Consolidated revenues to grow by 12%YoY: AKD Securities forecasts consolidated revenues to grow by 10%YoY to PKR28.3bn where AKD Securities expects standalone revenues to increase by an encouraging 8%YoY’ to PKR14.9bn while cellular revenues are estimated to grow by 17%YoY to PKR13.4bn. Robust growth in broadband segment is expected to boost the fixed line segment revenues, where AKD Securities Ag broadbands coupled with increasing product density as the future revenue drivers for PTC. Rise in operating costs particularly the salary expense is expected to pull down operating margins by 5ppsYoY to 9.8%. PTC would be paying the 3.5% technical service fee to Etisalat in 1QFY12, where the agreement is scheduled to be terminated in Oct’11 however the agreement is subject to renewal. For 1QFY12, AKD Securities estimates the technical service tee at PKR992mn (PPR impact of PKR0.1.3).

Termination of Etislat technical service agreement would be a key trigger for PTC, which will have an incremental EPS impact of PKR0.40 and PKR0.60 for FY12 and FY13 respectively. PTC is trading at FY12F PER of Six and dividend yield of 14% and offers a rich upside of 76% to AKD Securities’ target price of PKR21.7/share. Buy!

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