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>In a much awaited move, Pakistan cement manufacturers have unanimously decided to raise cement prices by Rs10/bag in North region, as per our channel checks. Further, our discussion with manufacturers suggest that further hike in prices cannot be ruled out in coming months thanks to robust local cement demand which is up 16-17% YoY in 8MFY18. Please see our note titled, ‘No Expansion in Punjab Without Court’s Approval’ dated January 24, 2018, where we mentioned that upward revision in cement…</li></ul>

In a much awaited move, Pakistan cement manufacturers have unanimously decided to raise cement prices by Rs10/bag in North region, as per our channel checks. Further, our discussion with manufacturers suggest that further hike in prices cannot be ruled out in coming months thanks to robust local cement demand which is up 16-17% YoY in 8MFY18. Please see our note titled, ‘No Expansion in Punjab Without Court’s Approval’ dated January 24, 2018, where we mentioned that upward revision in cement…

Flash Note: Pakistan Cements: Further Hike in Prices Expected

Thematic (Sector/Industry)

<ul class=""><li>The Supreme Court (SC) of Pakistan in Nov 2017 took a suo moto notice based on media reports that the Katas Raj pond (situated in Kallar Kahar, Punjab) is drying out due to consumption of underground water by nearby cement factories. In this regard, SC has held multiple hearings (Case No. 25598-G/2017 - In the matter of drying out of the Shiri Katas Raj Temple), which is on going and to this end has served notices to Bestway Cement (BWCL) 1&amp;2, DG Khan Cement (DGKC) Chakwal line and Dandot cement…</li></ul>

The Supreme Court (SC) of Pakistan in Nov 2017 took a suo moto notice based on media reports that the Katas Raj pond (situated in Kallar Kahar, Punjab) is drying out due to consumption of underground water by nearby cement factories. In this regard, SC has held multiple hearings (Case No. 25598-G/2017 - In the matter of drying out of the Shiri Katas Raj Temple), which is on going and to this end has served notices to Bestway Cement (BWCL) 1&amp;2, DG Khan Cement (DGKC) Chakwal line and Dandot cement…

Pakistan Cements: Cement Expansions in Punjab Hit Snag

MSCI semi annual index review is scheduled on Nov 13, 2017 where Pakistan’s weight in MSCI EM index is expected to be around 0.10% based on Oct 31, 2017 free float market capitalization of EM Index and 6 constituents of Pakistan market. This is lower than 0.14% weight initially set after reclassification of Pakistan market from Frontier Market to Emerging Markets (announced on May 15, 2017 and was effective from Jun 1, 2017). The semi-annual index review changes will be effective on Dec 1, 2017…

MSCI semi annual index review is scheduled on Nov 13, 2017 where Pakistan’s weight in MSCI EM index is expected to be around 0.10% based on Oct 31, 2017 free float market capitalization of EM Index and 6 constituents of Pakistan market. This is lower than 0.14% weight initially set after reclassification of Pakistan market from Frontier Market to Emerging Markets (announced on May 15, 2017 and was effective from Jun 1, 2017). The semi-annual index review changes will be effective on Dec 1, 2017…

Pakistan Strategy: MSCI Semi Annual Review, Pakistan Weight in MSCI EM Likely to Fall

Pakistan cement manufacturers posted profitability decline of 3% YoY (pretax profits down 15%) during 1QFY18 vs. double digit growth of 17% and 32% seen in 1QFY17 and 1QFY16, respectively. Our analysis is based on a sample of 15 listed cement producers (out of a total of 18) which represents 99.7% of total cement companies’ market capitalization.During 1QFY18, sector sales grew by 11% YoY, mainly supported by 21% growth in local dispatches (total volume up 15%).  Performance of local dispatches…

Pakistan cement manufacturers posted profitability decline of 3% YoY (pretax profits down 15%) during 1QFY18 vs. double digit growth of 17% and 32% seen in 1QFY17 and 1QFY16, respectively. Our analysis is based on a sample of 15 listed cement producers (out of a total of 18) which represents 99.7% of total cement companies’ market capitalization.During 1QFY18, sector sales grew by 11% YoY, mainly supported by 21% growth in local dispatches (total volume up 15%).  Performance of local dispatches…

Pakistan Cements: Sector Profits -3%, Pretax Profits -15% YoY in 1QFY18

Frontier and emerging markets (Vietnam)

Dylan Waller

Recapping Areas of Optimism and Concern My previous insight into <a href="https://www.smartkarma.com/insights/pakistan-s-cement-industry-poised-for-further-growth" target="_blank">Pakistan’s Cement Industry Poised for Further Growth</a> noted how the country's cement industry was poised for rapid growth on the back of increased construction in the country, notably spearheaded by the China Pakistan Economic Corridor (“CPEC”).  As mentioned before, the biggest challenge for this industry included the fact that company's faced risks in select unfavorable export markets, and how the removal of sanctions for Iran had…

Recapping Areas of Optimism and Concern  My previous insight into Pakistan’s Cement Industry Poised for Further Growth noted how the country's cement industry was poised for rapid growth on the back of increased construction in the country, notably spearheaded by the China Pakistan Economic Corridor (“CPEC”).  As mentioned before, the biggest challenge for this industry included the fact that company's faced risks in select unfavorable export markets, and how the removal of sanctions for Iran had…

Pakistan

Fauji Cement Company Limited manufactures and sells cement.

Kohat Cement Company Limited manufactures and sells grey cement.

D.G. Khan Cement Company Limited manufactures and sells portland cement.

Cherat Cement Company Limited manufactures, markets, and sells ordinary Portland cement and clinker in Pakistan. The company sells its products under the Cherat brand name. It also exports its products to Afghanistan and India. The company was incorporated in 1981 and is headquartered in Karachi, Pakistan.

Attock Cement Pakistan Limited manufactures and sells cement and related products. The Company is also part of the Pharaon group, which in addition to investments in the cement industry also owns interests in the oil and gas sector.

Engro Fertilizers Limited is a fertilizer manufacturing and marketing company with products that focus on balanced crop nutrition and increased yield.

Fauji Fertilizer Company Limited manufactures, purchases and markets fertilizers.

Engro Corporation Ltd. manufactures and markets fertilizers and plastics; generates electricity; and processes food.  The Company produces nitrogenous, phosphatic and blended fertilizers; polyvinyl chloride resin; and industrial automation products; develops electricity generating plants; produces dairy foods; and operates a liquefied petroleum gas and liquid chemical terminal.

Dawood Hercules Corporation Ltd. operates as an investment holding company. The Company provides information technology and financial services, food, fertilizer and chemical manufacturing, as well as energy and storage services.

Siam City Cement Public Company Limited produces and distributes cement under branded names with various type of cement for different applications.  The Company also also produces and distributes ready-mix concrete and aggregates under branded names, as well as branded wood-replacement products.

Henan Tongli Cement Co., Ltd. produces and sells cement.  The Company's products include ordinary Portland cement, Portland slag cement and other cement equipments.

Prism Johnson Limited manufactures and sells building materials. The Company offers a wide range of products such as cement, ready-mixed concrete, tiles, bath products, aggregates, sand, sanitary ware, faucets, modular kitchens, marbles, and construction chemicals. Prism Johnson serves customers in India.

Shandong Jinjing Science & Technology Stock Co., Ltd. manufactures and markets float glass, coated glass, and ultra-white glass.  The Company's products are used in glass processing and construction industries.

China West Construction Group Co., Ltd. is an infrastructure development company. The Company manufactures and sells pre-mixed concretes.

Sumitomo Osaka Cement Co., Ltd. produces cement.  The Company also manufactures non-cement products including ultrafine particles used for cosmetics and opto electronics.  Sumitomo Osaka Cement has overseas production facilities.

STO SE & Co. KGaA manufactures and sells building materials and products for the commercial and residential construction industry in Europe.  The Company offers a variety of climate and acoustic insulating modular facade and interior wall systems in plaster materials.  Sto also offers painting and recycled glass products for construction and provides consulting services.

Ibstock Plc manufactures, markets, and distributes building materials. The Company manufactures clay bricks, brick components, concrete roof tiles, stone masonry substitutes, concrete fencing, pre-stressed concrete products and concrete rail products. Ibstock offers its products to the housing, repair, maintenance, and infrastructure markets in the United Kingdom and United States.

Marshalls plc is a holding company.  Through its subsidiaries, the Group manufactures and sells a variety of building materials for the construction, home improvement and garden landscaping sectors.  Their merchandise includes concrete, stone and clay, patio and driveway products, drainage systems, and DIY items.

CSG Holding Co. Ltd.  manufactures raw sheets of high-grade float glass, archite ctural glass, delicacy glass, automotive glass, new-typed electronic components, and structure ceramic materials. The Company also operates in real estate development.

Lucky Cement Limited manufactures and sells cement.  The Company's cement brands include Lucky Gold Brand, Lucky Brand, Lucky Star Brand. Lucky Cement's main plant site is located at the District Lucky Marwat in the North West Frontier province of Pakistan.

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Lucky Cement (LUCK PA)

Flash Note: Pakistan Cements: Further Hike in Prices Expected

In a much awaited move, Pakistan cement manufacturers have unanimously decided to raise cement prices by Rs10/bag in North region, as per our...

Topline Securities

Pakistan Cements: Cement Expansions in Punjab Hit Snag

The Supreme Court (SC) of Pakistan in Nov 2017 took a suo moto notice based on media reports that the Katas Raj pond (situated in Kallar Kahar,...

Topline Securities

Pakistan Strategy: MSCI Semi Annual Review, Pakistan Weight in MSCI EM Likely to Fall

MSCI semi annual index review is scheduled on Nov 13, 2017 where Pakistan’s weight in MSCI EM index is expected to be around 0.10% based on Oct 31,...

Topline Securities

Pakistan Cements: Sector Profits -3%, Pretax Profits -15% YoY in 1QFY18

Pakistan cement manufacturers posted profitability decline of 3% YoY (pretax profits down 15%) during 1QFY18 vs. double digit growth of 17% and 32%...

Topline Securities

Pakistan's Cement Industry: A Mixed Bag

Recapping Areas of Optimism and ConcernMy previous insight into Pakistan’s Cement Industry Poised for Further Growth noted how the country's cement...

Dylan Waller

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