External broker reports(aggregated public sources), Topline Securities

Topline Securities

External broker reports(aggregated public sources)

Topline Securities is one of the fastest growing brokerage houses in Pakistan. It has strong equity brokerage, economic / equity research, mutual fund distribution, commodity trading and corporate finance & advisory functions. Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Equity Bottom-Up

<ul>
<li>We revise down our earnings forecasts for Packages (PKGS) after incorporating 3Q2018 result, announced yesterday.</li>
<li>The company’s 9Q2018 result fell short of our expectations on account of lower than expected 1) dividend income from Tetra Pak, 2) gross margins, 3) operating profit margins of Packages Mall and 4) Nestle Pakistan (NESTLE) dividend income. However, we maintain our ‘Buy’ call on PKGS.</li>
<li>For 2018/2019/2020, we now expect PKGS to post consolidated EPS (diluted) of Rs26/15.7/18.5, down by average 54% against our previous estimates.</li>
<li>Margins will be lower due to higher input costs on the back of recent rupee devaluation and higher commodity prices, we believe.</li>
<li>Moreover, we expect lower contribution from Packages Mall, after incorporating lower than anticipated operating profit margins.</li>
<li>We now expect Packages Mall to contribute EPS of Rs2.5/2.8/3.4 in 2018/2019/2020, down by average 69% against our previous expectations.</li>
<li>We expect Tetra Pak dividend income to come in at Rs2.5bn in 2018, down by around 17% from our earlier estimates. To recall, PKGS will not be receiving any dividend income from Tetra Pak from 2019 onwards as per the arrangement.</li>
<li>With no dividend income from Tetra Pak, we estimate significant fall of 39% in PKGS earnings in 2019.</li>
<li>We have also trimmed down our forecasts for NESTLE dividend income after incorporating NESTLE’s 9M2018 result where earnings of the company were marred by lower gross margins, down 3ppts to 34% and higher financial charges, up 68% YoY in 9M2018.</li>
<li>We now expect NESTLE’s EPS to clock-in at Rs255/295/334 in 2018/2019/2020, down on average by 27% from our previous estimates. Consequently, we estimate NESTLE to pay dividend of Rs249/289/327 during the said period.</li>
<li>No contribution is expected from Bulleh Shah Packaging (BSPL), a wholly owned subsidiary of PKGS (previously a join venture with 65% stake) as the company continues to suffer from higher cost of production, which we believe, will continue to put downward pressure on earnings due to hike in input costs.   </li>
<li>We flag 1) BSPL’s higher cost of production 2) decline in investment income and 3) higher than expected fuel &amp; energy costs as key risks for PKGS.</li>
</ul>


We revise down our earnings forecasts for Packages (PKGS) after incorporating 3Q2018 result, announced yesterday.
The company’s 9Q2018 result fell short of our expectations on account of lower than expected 1) dividend income from Tetra Pak, 2) gross margins, 3) operating profit margins of Packages Mall and 4) Nestle Pakistan (NESTLE) dividend income. However, we maintain our ‘Buy’ call on PKGS.
For 2018/2019/2020, we now expect PKGS to post consolidated EPS (diluted) of Rs26/15.7/18.5, down by average 54% against our previous estimates.
Margins will be lower due to higher input costs on the back of recent rupee devaluation and higher commodity prices, we believe.
Moreover, we expect lower contribution from Packages Mall, after incorporating lower than anticipated operating profit margins.
We now expect Packages Mall to contribute EPS of Rs2.5/2.8/3.4 in 2018/2019/2020, down by average 69% against our previous expectations.
We expect Tetra Pak dividend income to come in at Rs2.5bn in 2018, down by around 17% from our earlier estimates. To recall, PKGS will not be receiving any dividend income from Tetra Pak from 2019 onwards as per the arrangement.
With no dividend income from Tetra Pak, we estimate significant fall of 39% in PKGS earnings in 2019.
We have also trimmed down our forecasts for NESTLE dividend income after incorporating NESTLE’s 9M2018 result where earnings of the company were marred by lower gross margins, down 3ppts to 34% and higher financial charges, up 68% YoY in 9M2018.
We now expect NESTLE’s EPS to clock-in at Rs255/295/334 in 2018/2019/2020, down on average by 27% from our previous estimates. Consequently, we estimate NESTLE to pay dividend of Rs249/289/327 during the said period.
No contribution is expected from Bulleh Shah Packaging (BSPL), a wholly owned subsidiary of PKGS (previously a join venture with 65% stake) as the company continues to suffer from higher cost of production, which we believe, will continue to put downward pressure on earnings due to hike in input costs.   
We flag 1) BSPL’s higher cost of production 2) decline in investment income and 3) higher than expected fuel &amp; energy costs as key risks for PKGS.


Packages Limited (PKGS): Earnings Revised Downward 'Maintain Buy'

<ul>
<li>
<a href="https://www.smartkarma.com/entities/26079" target="_blank" data-smartkarma-citation="entities:26079:1">Cherat Packaging Ltd (CPPL PA)</a> is Pakistan’s largest cement bag supplier and is expected to benefit from 1) upcoming cement expansions where it caters to the sector’s packaging needs and 2) venturing into high growth flexible packaging.</li>
<li>CPPL’s main product is 50kg Kraft paper bags for storage of Cement. For this they previously had installed capacity of 265mn paper bags per annum. However, they have recently increased paper bag capacity to 400mn bags via installation of state-of-the-art new…</li>
</ul>



Cherat Packaging Ltd (CPPL PA) is Pakistan’s largest cement bag supplier and is expected to benefit from 1) upcoming cement expansions where it caters to the sector’s packaging needs and 2) venturing into high growth flexible packaging.
CPPL’s main product is 50kg Kraft paper bags for storage of Cement. For this they previously had installed capacity of 265mn paper bags per annum. However, they have recently increased paper bag capacity to 400mn bags via installation of state-of-the-art new…


Cherat Packaging (CPPL): Pakistan's Largest Cement Bag Supplier

Pakistan

Cherat Packaging  Limited manufactures and markets paper bags for the construction industry.  The Company manufactures various types of paper bags using clupak sack kraft paper imported from Austria, Sweden, and Czech Republic.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Cherat Packaging (CPPL PA)

Packages Limited (PKGS): Earnings Revised Downward 'Maintain Buy'

We revise down our earnings forecasts for Packages (PKGS) after incorporating 3Q2018 result, announced yesterday. The company’s 9Q2018 result fell...

Topline Securities

Cherat Packaging (CPPL): Pakistan's Largest Cement Bag Supplier

Cherat Packaging Ltd (CPPL PA) is Pakistan’s largest cement bag supplier and is expected to benefit from 1) upcoming cement expansions where it...

Topline Securities

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)