Morning Briefing for February 12, 2014 – Standard Capital : AsiaNet-Pakistan

Morning Briefing for February 12, 2014 – Standard Capital

February 12, 2014 | Brokerage | Share:

Karachi, February 12, 2014 (PPI-OT): Rabi crops drove the Automobile sales by massive
58.6% MoM

As per the latest automobile sales data by PAMA, overall volumetric sales of auto sector jump by 58.6% MoM and 53% YoY.

According to Standard Capital, 107,020 units were sold in 7MFY14 as against the sales of 70,029 units in the corresponding period last year. Moreover, on monthly basis, industry sales were up by 58.6% to 13,671 units in Jan-14 as against 8,618 units in Dec-13. With strong volumetric sales in start of CY14 Standard Capital sees juice in auto industry.

PSMC volumetric sales up by 46% YoY

Pak Suzuki Motors Company (PSMC) sales up by 46% YoY to 60,530 units in 7MFY14 against 41,328 units sold in same period last year (SPLY). MoM increase in sales by 18.4% was the major contribution to massive YoY growth. During first month of 2HFY14 PSMC sold 7,079 units of cars and 2,021 units of motorcycles against 5,981 units of cars and 1,767 motorcycles sold in Dec-13. For PSMC Ravi, Cultus and Bolan were the major contributors in growth of sales and individually posted 77%, 62% and 59% respectively growth in volumetric sales in 7MFY14.

Indus motors observed 52% YoY growth

The starting of 2HFY14 was fabulous for INDU motors in term of volumetric sales and sales were double in Jan-14 to 3,992 units against last month sales of 1,982 units. Toyota Corolla was the major beneficiary due to customer preference for high end cars in Jan-14. While on YoY basis INDU sales were increased by 52% to 27,590 units sold in 7MFY14 against 18,188 units sold in SPLY.

HCAR- Marvellous growth in January sales

The harvesting season in rural area of Sindh and Punjab drove the high end cars demand in Jan-14. HCAR being symbol of high end cars was the major gainer and volumetric sales were 4 times higher in Jan-14 to 2600 units (1,278 units of Civic and 1,322 units of City) against 655 units sold in Dec 13. Wherein HCAR posted 80% YoY growth in sales to 18,893 units sold in 7MFY14 against 10,513 units sold in SPLY.

Awful month for tractors players:

Tractors manufactures were badly hampered during Jan-14 and witnessed drastic 85% MoM decrease in sales to 876 units in Jan-14 against 5,770 units sold in last month. Wherein tractor sales were dropped by 37% YoY to 18,376 units in 7MFY14 against 29,034 units sold in SPLY.

Valuation:

Based on expected earnings HCAR, PSMC and INDU yield PE multiple of 9x 6.2x and 7.4x respectively. Depreciating JPY/ USD parity and swilling gross margin for the auto assembles we maintain BUY stance for PSMC and INDU and HOLD stance for HCAR.

Automobile sales
                   Jan-14   Dec-13     MoM    7MFY14     7MFY13        YoY
Total vehicles     13,671    8,618   58.6%   107,020     70,029      52.8%
PSMC
Liana                  22       26  -15.4%       139        112        24%
Swift                 455      329   38.3%     4,265      3,624        18%
Cultus              1,456    1,384    5.2%    12,062      7,459        62%
Mehran              2,531    1,979   27.9%    23,414     17,771        32%
Bolan               1,252    1,306   -4.1%    10,977      6,883        59%
Ravi                1,363      957   42.4%     9,680      5,479        77%
Total cars          7,079    5,981   18.4%    60,537     41,328        46%
Motorcycles         2,021    1,767   14.4%    19,837      9,801       102%
Indus Motors
Corolla             3,611    1,534  135.4%    23,595     15,725        50%
Fortuner               40       52  -23.1%       387          -        n/a
Hilux                 341      396  -13.9%     3,608      2,463        46%
                    3,992    1,982  101.4%    27,590     18,188        52%
HCAR -
Civic               1,278      265  382.3%     8,301      4,718        76%
City                1,322      390  239.0%    10,592      5,795        83%
                    2,600      655  296.9%    18,893     10,513        80%
Tractors -
AL Ghazi Tractor      561    1,565  -64.2%     6,903     11,971       -42%
Millat Tractor        315    4,205  -92.5%    11,473     17,063       -33%
Total tractors        876    5,770  -84.8%    18,376     29,034       -37%
Source: www.pama.org.pk
Automobile

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