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.

Thematic (Sector/Industry)

<ul><li>Topline Cement Universe is expected to post profitability of Rs12.5bn in 4QFY24 against profit of Rs11.1bn in 3QFY24, up by 13% QoQ, due to higher average retention prices.</li><li>This will take FY24 profits to Rs51.1bn, up 84% YoY due to increase in GP margins to 29%, up by 4ppts YoY.</li><li>While on YoY basis, Topline cement universe posted loss of Rs2.8bn in 4QFY23 due to higher effective tax rate related to super tax liability. Excluding for tax implications, Profit Before Tax (PBT) in 4QFY24 is expected to increase by 45% YoY due to higher revenues and other income.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Topline Cement Universe is expected to post profitability of Rs12.5bn in 4QFY24 against profit of Rs11.1bn in 3QFY24, up by 13% QoQ, due to higher average retention prices.This will take FY24 profits to Rs51.1bn, up 84% YoY due to increase in GP margins to 29%, up by 4ppts YoY.While on YoY basis, Topline cement universe posted loss of Rs2.8bn in 4QFY23 due to higher effective tax rate related to super tax liability. Excluding for tax implications, Profit Before Tax (PBT) in 4QFY24 is expected to increase by 45% YoY due to higher revenues and other income.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Profitability Likely to Increase by 13% QoQ in 4QFY24; Net Revenue to Increase by 10% YoY in 4QFY24

<ul><li>Pakistan recorded monthly IT exports of US$298mn, up by 33% YoY while declining by 10% MoM in Jun-2024. These monthly IT exports in Jun-2024 are higher than last 12-month average of US$262mn.</li><li>YoY jump in IT exports is due to (1) IT export companies growing in the GCC region especially Saudi Arabia, (2) relaxation in the permissible retention limit by the State Bank of Pakistan, increasing it from 35% to 50% in the Exporters' Specialized Foreign Currency Accounts, and (3) stability in PKR encouraging IT exporters to bring higher portion of profits back to Pakistan.</li><li>Pakistani IT companies are active in engaging with GCC clients. In Mar 2024 a delegation of 38 IT companies attended Leading Edge Advancement and Progress (LEAP) event in Saudi Arabia and in May 2024 Prime Minister and IT Minister of Pakistan attended UAE Pakistan Tech Collaboration in Abu Dhabi.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Pakistan recorded monthly IT exports of US$298mn, up by 33% YoY while declining by 10% MoM in Jun-2024. These monthly IT exports in Jun-2024 are higher than last 12-month average of US$262mn.YoY jump in IT exports is due to (1) IT export companies growing in the GCC region especially Saudi Arabia, (2) relaxation in the permissible retention limit by the State Bank of Pakistan, increasing it from 35% to 50% in the Exporters' Specialized Foreign Currency Accounts, and (3) stability in PKR encouraging IT exporters to bring higher portion of profits back to Pakistan.Pakistani IT companies are active in engaging with GCC clients. In Mar 2024 a delegation of 38 IT companies attended Leading Edge Advancement and Progress (LEAP) event in Saudi Arabia and in May 2024 Prime Minister and IT Minister of Pakistan attended UAE Pakistan Tech Collaboration in Abu Dhabi.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Pakistan Technology - FY24 IT Exports up by 24% YoY to US$3.2bn; Exports in Jun-24 up by 33% YoY

Cross Asset Strategy

<ul><li>Pakistan posted Current Account Deficit (CAD) of US$0.7bn in FY24 (0.2% of GDP), lowest in 13 years. While average for last 5 and 10 years US$8.3bn (2.6% of GDP) and US$8.4bn (2.7% of GDP), respectively. In Jun 2024, CAD was US$329mn, up 33% MoM.</li><li>To highlight, 85% of this deficit (or US$577mn) was recorded in last two months May and Jun 2024 due to significantly higher primary deficit with average of US$1.3bn per month in last 2 months compared to average of US$593mn in first 10 months (10MFY24). We believe, higher primary deficit in last 2 months is attributed to clearance of dividend/profit repatriation by central bank, which was also indicated in last analyst briefing of central bank.</li><li>Full year primary deficit in FY24 clocked in US$8.6bn, highest ever in history of Pakistan. Based on the data available on SBP website for 11MFY24, profit/dividend repatriation clocked in at US$1.8bn compared to US$313mn in 11MFY23. While the annual average for FY18-22 was US$1.8bn.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Pakistan posted Current Account Deficit (CAD) of US$0.7bn in FY24 (0.2% of GDP), lowest in 13 years. While average for last 5 and 10 years US$8.3bn (2.6% of GDP) and US$8.4bn (2.7% of GDP), respectively. In Jun 2024, CAD was US$329mn, up 33% MoM.To highlight, 85% of this deficit (or US$577mn) was recorded in last two months May and Jun 2024 due to significantly higher primary deficit with average of US$1.3bn per month in last 2 months compared to average of US$593mn in first 10 months (10MFY24). We believe, higher primary deficit in last 2 months is attributed to clearance of dividend/profit repatriation by central bank, which was also indicated in last analyst briefing of central bank.Full year primary deficit in FY24 clocked in US$8.6bn, highest ever in history of Pakistan. Based on the data available on SBP website for 11MFY24, profit/dividend repatriation clocked in at US$1.8bn compared to US$313mn in 11MFY23. While the annual average for FY18-22 was US$1.8bn.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Pakistan Economy: Pakistan Reported Current Account Deficit of 0.2% of GDP in FY24

<ul><li>In a most anticipated event, Pakistan authorities have reached Staff Level Agreement (SLA) with International Monetary Fund (IMF) for a new 37 months Extended Funded Facility (EFF) of US$7bn.</li><li>This is in continuation and in line with of our theme, wherein we are expecting index to re-rate linearly to its historic forward PE of 7x from current level of 3.95x over the course of IMF program. Please refer to our detailed strategy report release on May 11, 2024 titled “Topline Strategy - Index to reach 87k by Dec 2024, 106k by Jun 2025”.</li><li>This new program aims to strengthen the macro economic stability and set the road for resilient and inclusive growth.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

In a most anticipated event, Pakistan authorities have reached Staff Level Agreement (SLA) with International Monetary Fund (IMF) for a new 37 months Extended Funded Facility (EFF) of US$7bn.This is in continuation and in line with of our theme, wherein we are expecting index to re-rate linearly to its historic forward PE of 7x from current level of 3.95x over the course of IMF program. Please refer to our detailed strategy report release on May 11, 2024 titled “Topline Strategy - Index to reach 87k by Dec 2024, 106k by Jun 2025”.This new program aims to strengthen the macro economic stability and set the road for resilient and inclusive growth.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Pakistan Clinches a New Deal with IMF; Tax Reforms to Increase Tax to GDP by 300bps

<ul><li>Pakistan car sales (as reported by PAMA) touched 18 months high, recording sales of 13.3k units in Jun-2024, up 21% MoM and 120% YoY.</li><li>In volumetric terms, MoM jump in car sales is primarily due to an increase in the sales of Indus Motors (INDU) up 44% MoM to 2,957 units and Pak Suzuki (PSMC) up 15% MoM to 6,885 units in Jun-2024.</li><li>Hyundai Nishat Motor recorded sales of 1,059 units (up 55% MoM) and Sazgar Engineering (SAZEW) recorded sales of 871 units (up 12% MoM). However only Honda Atlas Cars (HCAR) recorded sales of 1,095 units which is down 8% MoM in Jun-2024.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Pakistan car sales (as reported by PAMA) touched 18 months high, recording sales of 13.3k units in Jun-2024, up 21% MoM and 120% YoY.In volumetric terms, MoM jump in car sales is primarily due to an increase in the sales of Indus Motors (INDU) up 44% MoM to 2,957 units and Pak Suzuki (PSMC) up 15% MoM to 6,885 units in Jun-2024.Hyundai Nishat Motor recorded sales of 1,059 units (up 55% MoM) and Sazgar Engineering (SAZEW) recorded sales of 871 units (up 12% MoM). However only Honda Atlas Cars (HCAR) recorded sales of 1,095 units which is down 8% MoM in Jun-2024.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Car Sales Touched 18 Months High at 13.3k Units (As Reported by PAMA) In Jun-2024