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Karachi, December 27, 2013 (PPI-OT): Chemical sector – Standard Capital’s coverage EPCL, GGL and ICI
Chemical sector is highly responsive to international commodity prices and local gas supply to plants. In recent times there was less gas supply and hence production decline was witnessed in few companies.
Companies situated in southern zone, however, don’t face such an eventuality. From commodity market sources, Standard Capital hears price increase in various textile bound chemicals wherein Standard Capital sees increase in quarter wise EPS in respective companies such as EPCL, ICI, SITC (caustic soda liquid).
The GSP+ to the textile sector is also an area of opportunity to textile processing chemicals which is being produced by ARPL (former CPL). Moreover, H2O2 producer SPL is also in limelight. The biggest threat, however, is the ongoing gas supply shortage which is forcing country wide units to either lessen production or close down.
In gases segment, GGL seems to outwit Linde. The company’s Lahore based plant is stated to have full production given increase in gas load. Its Karachi based new plant has started production from this week of December and company is poised to be one of the leaders of hospital gases etc. It is also a good option for Shariah-compliant mutual funds.
Standard Capital believes EPCL to attain full production near to 150K tons per annum of PVC with roaring sales in Punjab. Secondly, any shortage like situation in caustic soda means increase in product prices which could be beneficial for EPCL revenue increase in CY13.
Company EPS Latest P/E Exp P/E PBV ROE ROA Dividend Avg 12M
Yield Volume
Archroma Pakistan 50.49(9M) 7.8 3.8 1.97 25.37 14.38 7.43 8,804
Pakistan Gum and Chemicals 18.04(9M) 5.3 6.7 1.48 51.35 20.86 4.98 2,118
Engro Polymer and Chemical 0.85(9M) 194.6 11.4 1.32 5.38 1.93 N/A 1,826,966
Linde Pakistan 4.71(9M) 16.5 29.0 2.78 16.62 9.48 3.85 9,820
Lotte Chemical Pakistan 0.07(9M) -60.7 66.2 0.9 31.93 17.48 N/A 4,113,470
FY14
Company EPS Latest P/E Exp P/E PBV ROE ROA Dividend Avg 12M
Yield Volume
Descon Chemicals -0.04(3M) -13.5 2.8 1.52 60.61 20.75 N/A 218,000
Sitara Chemical 13.35(3M) 5.9 3.9 0.69 11.73 5.35 4.23 19,867
Nimir Ind.Chemicals 0.18(3M) 3.3 7.4 0.66 20.35 11.78 N/A 587,889
Wah-Nobel Chemicals 1.59(3M) 5.5 7.6 0.9 17.14 11.88 N/A 9,927
Biafo Industries 2.53(3M) 6.6 9.4 3.08 31.92 22.55 13.68 1,901
Ghani Gases 0.23(3M) 13.2 9.5 2.22 10.68 4.59 1.8 253,279
Dynea Pakistan 0.96(3M) 4.7 10.2 1.06 18.69 11.06 6.42 30,405
Sitara Peroxide 0.33(3M) N/A 193.4 0.93 18.33 5.78 N/A 307,165
I.C.I Pakistan 3.32(3M) 33.8 18.9 2.15 16.89 8.78 2.19 85,810
Descon Oxychem -0.51(3M) -11.2 N/m 1.13 24.42 5.51 N/A 509,556
Source: www.scstrade.com