AKD Quotidian about — Auto sales posted growth of 17% YoY in 7MFY12

Karachi: Latest statistics posted by Pakistan Automobile Manufacturers Association (PAMA) report a growth of 17%YoY in auto sales (Cars & LCVs) in 7MFY12.

According to AKD Securities, in this regard, both car and LCV sales reported a growth of 17%YoY to 85,011 units and 11,916 units, respectively. PSMC continued to outperform the industry by reporting a 33%YoY growth on the back of double digit growth in most of its variants. Bolan and Mehran registered respective growth of 43%YoY and 40%YoY due to their scheduled supply to the Government of Punjab for the province’s Taxi scheme. While INDU reported sales growth of 4%YoY to 29,462 units, HCAR sales declined by 20%YoY to stand at 6,991 units in 7MFY12. Sequentially, total auto sales registered a growth of 34%MoM in Jan’12, with car sales increasing by 38%MoM and LCV sales reporting a growth of 10%MoM. On the tractors front, total sales declined by 52%MoM in Jan12 (seasonal effect) and 66%YoY (wiped out sales in earlier months) in 7MFY12. Launch of the Sindh Tractor Scheme (distributing 5k tractors) and AGTL’s majority in the said province led to a growth of 43xMoM in Jan’12 sales, white MTL’s tractor sales declined by 77%MoM on the back of high base and absence of tractor scheme in Punjab. Going forward however, AKD Securities expects sates to pick up in 4QFY12 with the beginning of the harvest period. In the autos segment, PSMC should remain attractive for 2HFY12, on the back of expected higher volumes.


Autos Volume Update
   7MFY12   7MFY11  YoY    Jan’12   Dec’11   MoM
Cars 85,011 72,580 17.1% 13,125    9,533  37.7%
LCVs   11,916  10,187  17.0%   1,858  1,684 10.3%
Total      96,927  82,767  17.1%  14,983 11,217   33.6%
MTL     9,170 23,513  -61.0%   165   724  -77.2%
AGTL 3,864  14,903  -74.1%  204    47 334.0%
Total  13,034  38,416 -66.1%  369   771  -52.1%
Source: PAMA and AKD Research

Cement Dispatches up 4%YoY in 7MFY12

All Pakistan Cement Manufacturers Association (APCMA) has reported a growth of 3.9%YoY (to 18mn tons) in total cement dispatches for 7MFY12. In this regard, local dispatches grew by 7.2%YoY to stand at 12.89mn tons while exports declined by 3.6%YoY to stand at 5.05mn tons. Growth in local dispatches resulted from consistent growth in cement demand in the Southern region. On the exports front, while sea exports declined by 17.5%YoY to stand at 1.39mn tons, exports through land grew by 3%YoY to at 3.66mn tons in 7MFY12. Sequentially however, total dispatches declined by 5%MoM in Jan’12 (to 2.5mn tons) on the back of lower dispatches in the North, both on the local and the export front (the winter effect). In the South region, both local

and export dispatches reported growth of 13%MoM. Going forward, AKD Securities remains optimistic for the Pakistan cement sector, with local dispatches to continue increasing and exports to be supported by growing demand in India and Afghanistan. High cement prices and increasing usage of cost reduction strategies (RDF, TOF and WHR) by cement manufacturers should also unlock upside potential. AKD Securities has a Buy stance on both LUCK (FY12F PER: 5.8) and DGKC (FY12F PER: 11.4x), offering upsides of 26% and 39% to AKD Securities’ respective target prices of PKR113/share and PKR34/share.


Cement Volume Update
(mn tons) 7MFY12 7MFY11 YoY Jan’12 Dec’11 MoM
Local 12.89 12.03 7.2% 1.95 2.03 -4%
North 10.48 9.96 5.2% 1.54 1.67 -8%
South 2.41 2.06 16.7% 0.41 0.37 13%
Export 5.05 5.24 -3.6% 0.59 0.65 -9%
North 3.66 3.55 3.0% 0.38 0.46 -18%
South 1.39 1.69 -17.5% 0.21 0.19 13%
Total 17.95 17.27 3.94% 2.54 2.68 -5%
Source: APCMA and AKD Research

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