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Karachi: MCB Bank Ltd (MCB) is scheduled to announce its 9MCY11 result on Oct 24’11.
According to AKD Securities, on a consolidated basis, they expect MCB to post NPAT of PkRI5.9Obn (fully-diluted EPS: PkR19.01) in 9MCY11 against NPAT of PkRI2.S5bn (fully-diluted EPS: PkR15.01) in 9MCY10, translating into very strong 27%YoY growth. On a sequential basis however, AKD Securities expects 3QCY11 NPAT to lower by 4%QoQ to PkR5.27bn (fully-diluted EPS: PkR6.30) primarily due to higher effective taxation as MCB has yet to account for the FY11 flood surcharge. AKD Securities expects MCB to announce an interim dividend of PkR3/share to bring cumulative 9MCY11 payout to PkR9/share. MCB trades at a CYI2F P/B of 1.19x, PER of 5.7x and DIV of 8.6% where AKD Securities’ target price of PkR2OSIshare offers upside of 30%. In this regard, AKD Securities assumes that rates interest rates will bottom out in the near-term before rising across the medium-term. However, negative sentiment in the scrip (MCB has shed 9%MTD) may continue if interest rates continue to swiftly come off given MCB retains a spreads-centric business model and tighter NIMs could lead to sizeable earnings deceleration next year.
FFBL 9MCY11 NPAT forecast at PkR6.7bn (EPS: PkR7.16)
FFBL will be announcing its 9MCY11 results on Oct 25’11. AKD Securities expects company’s bottom-line to grow by 128% YoY to PkR6.lbn where earnings growth has been spurred by robust margins on both urea and DAP following successive price hikes in both products. For 3QCY11 AKD Securities forecasts an NPAT of PkR3.2bn (EPS: PkR3.40) where sequential earnings are estimated to increase by 62%QoQ following a 11 1%QoQ growth in DAP sales to 215k tons. AKD Securities anticipates an interim cash payout of PkR3.25/share with the result which would take CYI1TD payout to PkR6.75/share. Currently AKD Securities has an Accumulate stance on FFBL which offers an upside of 10% to AKD Securities’ revised target price of PkR68/share post recent urea price hike and discount rate cut.
EPCL 9MCY11 NLAT to stand at PkR305mn (LPS: PkR0.46)
EPCL will announce its 9MCY11 result on Oct 2191. AKD Securities expects EPCL’s 9MCY11 NLAT to reduce by 60%YoY to PkR305mn (LPS: PkR0.46) with the loss pared by higher margins (gross margins up 6ppts to 13%) and higher product sales (PVC and caustic soda sales up by 12%YoY and 8%YoY respectively). For 3QCY11, AKD Securities expects NLAT to decline slightly by 19%QoQ to PkR110mn (LPS: PkR0.17) where AKD Securities expect improvement in gross margins (+lppts QoQ) to help in improving operating profits by 33%QoQ. Stable operations at the VCM plant remains the key challenge for EPCL going forward where stable VCM production profile should lead to multiple re-rating in AKD Securities’ view. Currently, AKD Securities has an Accumulate stance on the scrip which offers 15% upside to its target price of PkR9.3/share.
FATIMA to post 9MCV11 NPAT of PkRl469mn (EPS: PkR0.58)
FATIMA will announce its 9MCY11 result on Oct 21’11 where AKD Securities forecasts company’s NPAT to stand at PkR1,169mn (EPS: PkR0.58). For 3QCY11, AKD Securities expects FATIMA to post an NPAT of PkR1,321 mn (EPS: PkRO.66). Gross margins for 3QCY11 are estimated at a healthy 52% where lower feedstock gas price and robust NP-phosrock primary margins are expected to drive margins. Urea, CAN and NP sales are forecast to stand at 110k tons, 92k tons and 59k tons respectively for 3QCY11. Lower effective tax rate due to accumulated losses would further enhance 3QCY11 earnings. AKD Securities is in the process of finalizing its investment case for FATIMA and will come up with a detailed report shortly.