Sector witnessed the increase of 7.8%MoM
The Pakistan Automotive Manufacturers Associations (PAMA) has recently released the production and sales figures for the period of 9MFY10. The sector witnessed the increase of 7.8%MoM during the period to 12,618 units comparing to 11,703 units during last month. On the other hand, the 9MCY10 sales showed 34%YoY growth to 97,918 units comparing to 73,071 units during the same period last year.
Pak Suzuki Motor Company (PSMC) remained the market leaderThe PSMC remained the market leader by further improving its market share to 52% from 51% last month where INDU improved its market share from 35% to 38% during the period. On the other hand, the HCAR market share shrank to 9% from 12% last month while DFML market share remained lowest during the period.
Indus Motors (INDU) showed the largest growthThe sales of INDU showed the largest growth of 16.6% during the period to 4,837 units from 4,150 units during the earlier month followed by PSMC who increased its sales by 9.1% during the period to 6,512 units comparing to 5,970 units during the preceding month where Honda Atlas (HCAR) sales travelled in declining momentum by 18.3% to 1,151 units comparing to 1,409 units during the earlier month. The Dewan Farooq Motors Limited (DFML) remained the owner of lesser unit wise sales.
Corolla remained on top with 4,417 unitsThe sales of Liana witnessed the tremendous growth of 297% to make 119 units of sales during the period comparing to 30 units during the corresponding month while Swift showed 19.21% decrease in its sales during the period. The Corolla remained on top with the sales of 4,147 units during the period showing 19.13% surge during the period while HCAR’s Civic and City showed the 14.19% and 21.42% decline during the period.
Looking Forward
The automobile sales are improving coupled with ongoing economic recovery. I expect further enlargement if SBP eases monetary policy going forward. On the other hand, the cost of production are expected to remain in upward momentum with respect to the depreciating PKR-USD and PKR-JPY parity however, the margins are expected to be stabilized by upward revision of product pricing by the auto sector. I recommend 'hold' stance for INDU and PSMC scrips by considering their current trading at FY10E of 8.35x and 10.44x where our target price for FY10 is PKR 214 and PKR 107 per share respectively.
Showing posts with label Automobile Industry of Pakistan. Show all posts
Showing posts with label Automobile Industry of Pakistan. Show all posts
Tuesday, April 13, 2010
Wednesday, April 7, 2010
Pak Suzuki Motors (PSMC) FY09 Review
Posted the NPAT of PKR 255 Million
The Pak Suzuki Motors (PSMC) has recently announced its result for the period of FY09. The company posted the NPAT of PKR 255 Million comparing to PKR 625 Million during the same period last year which translated a tremendous decline during the reviewing period. The EPS of the bank nose-dived to PKR 3.10 comparing to PKR 7.59 last year.
Net sales dwindled by 34%YoY
The Net Sales of the company dwindled by 34%YoY to PKR 26.23 Billion from PKR 39.67 Billion last year mainly in response to the lower volumetric sales to 51,521 units during the period. Moreover, the cost pressures remained the key concern for the company during the period primarily due to depreciating PKR-USD and PKR-JPY Parity coupled with the increase in steel prices during FY09. However, the increase in car prices supported the margins to show 70bps increment in gross profit margins (GPM) to 2.2% during the period.
Lower bank deposits shrank other income
The other income of the company shrank by 54%YoY to PKR 620 Million comparing to PKR 1.35 Billion last year mainly at the back of deposit income which squeezed by 39%YoY to PKR 408 Million against PKR 671 Million last year.
Finance cost squeezed by 75%YoY
The finance cost of the company witnessed a massive reduction by 75%YoY to PKR 13 Million comparing to PKR 53 Million during the same period last year. The decline was mainly attributed to reduction in interest rate during the period.
Looking Forward
I believe that the PKR-JPY parity is turning back to its historical trend while steel prices also look stable going forward. Moreover, the volumetric sales has already picked up and showed a decent growth in 2HCY09 while the company has increased its sales prices by an average 2% (PKR 10,000 to PKR 15,000) during 3MFY10 which is over and above the estimated surge of 3.5% in company's cost of production during the same period. I maintain ‘buy’ stance for the company by considering its FY10E earnings at 10.25x where my target price for 1HCY10 is PKR 107 per share.
The Pak Suzuki Motors (PSMC) has recently announced its result for the period of FY09. The company posted the NPAT of PKR 255 Million comparing to PKR 625 Million during the same period last year which translated a tremendous decline during the reviewing period. The EPS of the bank nose-dived to PKR 3.10 comparing to PKR 7.59 last year.
Net sales dwindled by 34%YoY
The Net Sales of the company dwindled by 34%YoY to PKR 26.23 Billion from PKR 39.67 Billion last year mainly in response to the lower volumetric sales to 51,521 units during the period. Moreover, the cost pressures remained the key concern for the company during the period primarily due to depreciating PKR-USD and PKR-JPY Parity coupled with the increase in steel prices during FY09. However, the increase in car prices supported the margins to show 70bps increment in gross profit margins (GPM) to 2.2% during the period.
Lower bank deposits shrank other income
The other income of the company shrank by 54%YoY to PKR 620 Million comparing to PKR 1.35 Billion last year mainly at the back of deposit income which squeezed by 39%YoY to PKR 408 Million against PKR 671 Million last year.
Finance cost squeezed by 75%YoY
The finance cost of the company witnessed a massive reduction by 75%YoY to PKR 13 Million comparing to PKR 53 Million during the same period last year. The decline was mainly attributed to reduction in interest rate during the period.
Looking Forward
I believe that the PKR-JPY parity is turning back to its historical trend while steel prices also look stable going forward. Moreover, the volumetric sales has already picked up and showed a decent growth in 2HCY09 while the company has increased its sales prices by an average 2% (PKR 10,000 to PKR 15,000) during 3MFY10 which is over and above the estimated surge of 3.5% in company's cost of production during the same period. I maintain ‘buy’ stance for the company by considering its FY10E earnings at 10.25x where my target price for 1HCY10 is PKR 107 per share.
Tuesday, August 11, 2009
Automobile Sector 1MFCY10 Review
Showed a healthy jump of 32.43%YoY
The latest sales figures of Pakistan Automotive Manufactureres Association (PAMA) for July 2009 depict that car sales are gradually picking up month on month basis; however there is still a long way to go for the auto industry. The sales figures reported for the month of July showed a healthy jump of 32.43% to 9,820units compared to the 7,415units in same month in 2008. The figures have also shown an improvement of 8.07% compared to 9,087units in June 2009.
800CC segment leading the recovery
The recovery in sales is lead by the 800CC category which has shown a healthy growth of 13.3% MoM. Honda City and Corolla in the 1300CC range have also witnessed some improvement in sales, the overall MoM growth in this segment is recorded at 9.12%, and the total number of units sold stood at 4,335. 1000CC segment made the sales growth of 5.85% having 1,555units sales in July compared to 1,469 units in previous month; SUVs and LCVs segment showed the negative sales trend by 13.41% and a sales figure of 1,330units in current period compared to 1,536 in last month. The main contributor was Pak Suzuki with 4,966 units sales followed by Indus Motors with 3,586 units while Honda Atlas Cars and Dewan Motors with 1,140 and 128 units of sales respectively.
Withdrawal of FED helped boost the sales...... but high financing cost is still a dragThe government took a decision to reduce the Federal excise duty on CKD units in the recently announced budget this has helped the car manufacturers in reducing the prices of the cars which in turn helped the sales figures. However the high consumer financial cost and the reluctance of the banking sector to push the car loans aggressively is not helping the cause of the car manufacturers.
The Cars’ Sales decline by 49.68%YoY and SUVs & LCVs’ sales decline by 27.67%YoY. The segment which conceded the biggest shock was 1000CC car category with an average downturn of 71.40% in sales. The recorded downturn was in effect of increase in automotive prices caused by 19% PKR-USD Parity (81.39 in June 2009 from 68.40 in June 2008) which increased the cost of imported completely knocked down (CKD) kits and limited financing due to increase in interest rates.
Indus Motors (Toyota).
Toyota corolla remained the highest selling car with 3,124 units sales, continuously maintaining number 1 slot since October 2008. In spite of July-2008 to June-2009 sales volume which declined by 20.45%YoY, it has improved its market share by further 2 points to 36% this month. The year which started with a sizable hit of 80%QoQ downturn in 2009 with the earlier model is gradually being reversed; it stoutly bounced back to 275%QoQ increase in 2nd Qtr of 2009 leading to a growth of 13%QoQ in next quarter, while the last Qtr depicted growth of 17%. In July 2009 Corolla has made 3% sales growth. On the reversal side of this the sales of Daihatsu Cuore, went down by 52.05%YoY in FY09, then we’ve seen sales to get back into the positive numbers with 22% jump MoM basis in June, and in July 2009 the numbers are again showing the negative sales growth of 17% by selling 331 cars compared to last month figure of 397 cars.
Pak- Suzuki
The highest sales in July 2009 were made by Pak Suzuki with 4,966 cars. The main reason for this spike is mainly due to the cut in prices of vehicles on celebration of 1 million vehicle sales by Pak Suzuki since its operations in Pakistan. With the exception of Liana and Alto all the products of Pak Suzuki has shown tremendous sales surge in the previous month, mainly due to the concerted effort on marketing by the company. The sales figures were lead by Bolan with whooping increase of 69% in MOM sales. Ravi and Mehran also witnessed healthy growth in July with MoM growth of 38% and 21% respectively. Very Surprisingly ALTO seems to be loosing its market and probably conceding to Core and foreign competition in 1000 cc category. While Liana remains weakling in Suzuki family, as it faces hard time with completion from Honda City and Corolla Xli in 1300CC range.
The latest sales figures of Pakistan Automotive Manufactureres Association (PAMA) for July 2009 depict that car sales are gradually picking up month on month basis; however there is still a long way to go for the auto industry. The sales figures reported for the month of July showed a healthy jump of 32.43% to 9,820units compared to the 7,415units in same month in 2008. The figures have also shown an improvement of 8.07% compared to 9,087units in June 2009.
800CC segment leading the recovery
The recovery in sales is lead by the 800CC category which has shown a healthy growth of 13.3% MoM. Honda City and Corolla in the 1300CC range have also witnessed some improvement in sales, the overall MoM growth in this segment is recorded at 9.12%, and the total number of units sold stood at 4,335. 1000CC segment made the sales growth of 5.85% having 1,555units sales in July compared to 1,469 units in previous month; SUVs and LCVs segment showed the negative sales trend by 13.41% and a sales figure of 1,330units in current period compared to 1,536 in last month. The main contributor was Pak Suzuki with 4,966 units sales followed by Indus Motors with 3,586 units while Honda Atlas Cars and Dewan Motors with 1,140 and 128 units of sales respectively.
Withdrawal of FED helped boost the sales...... but high financing cost is still a dragThe government took a decision to reduce the Federal excise duty on CKD units in the recently announced budget this has helped the car manufacturers in reducing the prices of the cars which in turn helped the sales figures. However the high consumer financial cost and the reluctance of the banking sector to push the car loans aggressively is not helping the cause of the car manufacturers.
The Cars’ Sales decline by 49.68%YoY and SUVs & LCVs’ sales decline by 27.67%YoY. The segment which conceded the biggest shock was 1000CC car category with an average downturn of 71.40% in sales. The recorded downturn was in effect of increase in automotive prices caused by 19% PKR-USD Parity (81.39 in June 2009 from 68.40 in June 2008) which increased the cost of imported completely knocked down (CKD) kits and limited financing due to increase in interest rates.
Indus Motors (Toyota).
Toyota corolla remained the highest selling car with 3,124 units sales, continuously maintaining number 1 slot since October 2008. In spite of July-2008 to June-2009 sales volume which declined by 20.45%YoY, it has improved its market share by further 2 points to 36% this month. The year which started with a sizable hit of 80%QoQ downturn in 2009 with the earlier model is gradually being reversed; it stoutly bounced back to 275%QoQ increase in 2nd Qtr of 2009 leading to a growth of 13%QoQ in next quarter, while the last Qtr depicted growth of 17%. In July 2009 Corolla has made 3% sales growth. On the reversal side of this the sales of Daihatsu Cuore, went down by 52.05%YoY in FY09, then we’ve seen sales to get back into the positive numbers with 22% jump MoM basis in June, and in July 2009 the numbers are again showing the negative sales growth of 17% by selling 331 cars compared to last month figure of 397 cars.
Pak- Suzuki
The highest sales in July 2009 were made by Pak Suzuki with 4,966 cars. The main reason for this spike is mainly due to the cut in prices of vehicles on celebration of 1 million vehicle sales by Pak Suzuki since its operations in Pakistan. With the exception of Liana and Alto all the products of Pak Suzuki has shown tremendous sales surge in the previous month, mainly due to the concerted effort on marketing by the company. The sales figures were lead by Bolan with whooping increase of 69% in MOM sales. Ravi and Mehran also witnessed healthy growth in July with MoM growth of 38% and 21% respectively. Very Surprisingly ALTO seems to be loosing its market and probably conceding to Core and foreign competition in 1000 cc category. While Liana remains weakling in Suzuki family, as it faces hard time with completion from Honda City and Corolla Xli in 1300CC range.
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