Author Topic: PSMC -- Pak Suzuki Motor Co. Ltd.  (Read 107983 times)

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Toshi

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PSMC -- Pak Suzuki Motor Co. Ltd.
« Reply #-1 on: October 10, 2008, 01:32:51 PM »
All About Pak Suzuki Motor Co. Ltd.
« Last Edit: February 19, 2012, 01:05:59 AM by M&M »

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PSMC -- Pak Suzuki Motor Co. Ltd.
« Reply #-1 on: October 10, 2008, 01:32:51 PM »

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Re: PSMC -- Pak Suzuki Motor Co. Ltd.
« on: October 23, 2009, 12:20:40 PM »
PSMC: 9M2009 EPS expected at Rs3.12
PSMC in its 9M2009 result is expected to post earnings of
Rs257mn (EPS of Rs3.12), compared to profits of Rs637mn
(EPS of Rs7.74) last year, down 60%YoY. Declining
volumetric sales (down 56%YoY) are likely to drive down net
sales for the company by 45%YoY to Rs18.1bn, despite an
average increase of 24-26% in car prices. Moreover, rupee
depreciation of 25% against yen has resulted in inflated cost
of production for the company (COGS/car up 24%YoY).
Hence, gross profits are set to decline by 49% with gross
margins falling by 24bps to 2.7%. However, admin and
distribution expenses are likely to decline by 17%YoY,
providing some support to the faltering bottomline.
In 3Q2009 alone, PSMC is expected to post profits of
Rs96mn (EPS of Rs1.16) as against earnings of Rs69mn
(EPS of Rs0.84) in 2Q2009, up 38%QoQ. Despite 49%
increase in net sales due to higher volumetric sales
(56%QoQ), rupee depreciation (6%QoQ) and lower car prices
kept gross margins under check. Hence, gross profit is
expected to arrive at Rs150mn, up 2%QoQ with margins
falling by 83bps to 1.8%.
With PSMC currently trading at 2009E and 2010F PE of 14.4x
and 9.5x, respectively, we maintain our ‘Sell’ stance on the
scrip.

Offline arauf

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Re: PSMC -- Pak Suzuki Motor Co. Ltd.
« Reply #1 on: November 01, 2009, 11:49:54 AM »
AKD recommends buying with target price of 160  :o

Toshi

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Re: PSMC -- Pak Suzuki Motor Co. Ltd.
« Reply #2 on: November 26, 2009, 11:44:30 AM »
Depressed sales and heightened cost pressures
were to primarily blame for a 67% decline in 9M2009
earnings of Pak Suzuki Motor Company (PSMC).
Profit for the period stood at Rs212mn (EPS of
Rs2.6) as against earnings of Rs637mn (EPS of
Rs7.7) in the corresponding period last year.
However, in 3rd quarter alone, the company’s profits
were up by 33%YoY to Rs51mn, though down 24% on QoQ
basis. With below than expected 9M2009 result, we are
revising down our 2009E earnings estimate by 41% to Rs5.6
per share. Consequently, trading at a 2009E PE of 16.2x, we
maintain our ‘Sell’ recommendation on the scrip.

Rupee volatility drive down earnings by 67%YoY


Despite an average increase of 22% in car prices by PSMC, a
56% fall in volumetric sales drove down net sales by 46%YoY
to Rs17.8bn in 9M2009. With rupee depreciating against yen
and US$ by 25% & 16%, respectively, cost of production/car
was up 22%YoY. Resultantly, gross profit was down 47% with
gross margins declining by 5bps to 2.9%. Other Income also
remained depressed during the period, down 39%YoY to
Rs432mn leading to a 67% fall in the profits of the company.
Considering the 3rd quarter alone, the state of affairs slightly
improved as profits were up 33%YoY. This was mainly due to
a 21% increase in average car prices whereas cost of
production/car rose by only 18%. Hence, gross profit arrived
at Rs176mn as against gross loss of Rs23mn last year. Other
income, however registered a decline of 29%. Resultantly, net
margin was up only 13bps compared to a 249bps
improvement in gross margins.

Net sales for 4Q to increase on sequential basis

The October sales painted a positive picture for PSMC as
sales were up 18%MoM. Despite weak volumes expected in
Nov and Dec (customers opting to delay their purchases until
after the New Year), nominal sales are expected to increase
by 7% thanks to Rs5-15k increase in car prices. Additionally,
PSMC had rolled out 5 units of Suzuki Swift in October which
is expected to be launched during the second half of January.
This is expected to improve PSMC’s market share going
forward, due to its anticipated untapped 1300CC hatch bag
positioning.

2009 EPS revised to Rs5.6 / 4Q earnings intact

With below than expected 9M2009 result, we are revising
down full year 2009 earnings by 41% to Rs5.6/share from
Rs9.4/share earlier. However, we keep our fourth quarter
earnings estimate intact and expect earnings to grow 4x over
the previous quarter to Rs3/share at the back of easing cost
pressures and rise in car prices.

Recommendation: ‘Sell’

Persistent yen appreciation and rise in steel prices remain a
cause for concern for the industry. On the other hand,
monetary easing will be the key in stimulating car sales. With
PSMC trading at 2009E of 16.2x, we maintain our ‘Sell’
recommendation on the scrip.

Toshi

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Re: PSMC -- Pak Suzuki Motor Co. Ltd.
« Reply #3 on: November 26, 2009, 12:29:41 PM »
Investment Theme ON TABLE
ALFALAH Securities STANCE on PSMC

PSMC the largest auto assembler in the country is on its way to gradual
recovery of both volumes and margins. EBITDA margins of the company
are estimated to increase to 5.4% by year end as against 2.7% in CY08
showing an improvement in operating performance of the company. The
volumes are estimated to drop by 45% during CY09 but thereafter will
improve at a CY09-12 CAGR of 22% mainly due to low base effect and an
expectation of easing off monetary regime. The launch of new model
Suzuki swift in 1300cc segment will help generate additional volumes, as
this is the segment where PSMC’s presence is negligible. The stock is
attractive on valuation having a DCF based fair value of PkR 112.73 offering
an upside potential of 30.43% from the current market price. The stock
trades at prospective CY10 earnings, BV and FCF multiples of 9.93, 0.47
and 4.18 respectively as against the CY04-09 historical prospective average
respective multiples of 12.39, 1.56 and 7.13. The stock offers CY09-12
tremendous earnings CAGR of 59% as well. We recommend a BUY.

Toshi

  • Guest
Re: PSMC -- Pak Suzuki Motor Co. Ltd.
« Reply #4 on: November 27, 2009, 09:23:55 PM »
Pak Suzuki urges complete ban on used car import


KARACHI: Pak Suzuki is about to launch a new hatchback model car next year, disclosed Hirofumi Nagao, CEO & MD of Pak Suzuki, in an exclusive interview with The News.

He said that initially the new model will be available in petrol but later as per demand it will also be available in CNG. It will be a manual car and if the demand for automatic transmission increases we can think about automatic transmission.

Pak Suzuki’s annual production capacity on two-shift basis is 150,000 units. “We have already increased the production capacity from 50,000 units in 2003 to 150,000 in 2007 ie 300 per cent. This production capacity is sufficient to cater to Suzuki demand in Pakistan market,” he added.

The ban on five-year-old used cars will help local manufacturers to boost sales and when volumes grow the production cost will go down, thus benefiting the end user. From five years the ban is now applicable to three-year old used cars but the used car import should be completely banned or the import duty should be very high so that used car import should stop.

Sharing his experience Nagao said: “When I was in India in the 1990’s there was very high duty on imports so this helped boost the local industry. The same should be done here in Pakistan to help the local auto manufacturer.”

The import of used cars does not bring in any investment nor it creates employment on the other hand local auto manufacturers have invested heavily in the country and thousands of employees are working in plants, Hirofumi Nagao said.

The global economic recession has also affected the auto sector in Pakistan. The other major factors contributing to slowdown in auto sector are high mark-up rates which have reduced auto financing from 70 per cent to 20 per cent, weak Pak rupee that has increased the cost of imported components, increase in utility charges has caused rise in production cost and the absence of long term auto policy, different kinds of taxes and security issues.

All the said factors contributed in reduction of sales, Nagao said, “we had to reduce our production as per market demand. Here I would like to mention one more thing that to benefit the customer we never passed on the major economic recession to them, we suffered a lot and still we are suffering from this recession we have reduced our prices so much, means we are facing global recession but we are continuously benefiting the customer.”

The recent increase in price is very minimal and it will not affect the customers much as the Pak Suzuki is still bearing most of the cost and it will not affect the sales. “We see improvement in sales in the near future,” Nagao said.

He added that total investment so far made is Rs10.3 billion. We do have our expansion plan intact. We have already acquired 125 acres for building another plant.

But it all depends upon future demand, future Government policies and future country and global conditions.

He said that Pak Suzuki is pioneer in automobile business in Pakistan. We have completed 25 years in developing motorization in Pakistan. We hold more than 50 per cent market share. These successes could not be achieved without support of Suzuki Motor Corporation Japan. One of the major areas benefited through this collaboration is technology transfer. We have successfully launched many new models and have highest percentage of localization in our products. Without technology transfer this could not have been possible.

About the law and order situation he said, “we Japanese believed that Punjab side like Lahore, Rawalpindi and adjacent areas are more peaceful and safer areas as compare to Sindh specially Karachi but since I have joined last year the perception has changed I feel that Karachi is much safer than Lahore or Rawalpindi as far as law and order situation is concerned.”

Through out the world when auto industry was suffering government came forward to support and assist but here though government is there to assist but auto industry need more cooperation to over come this situation.

Hybrid cars are getting popular but it would be very costly and other important issue is how to lighten the hybrid car battery, which is very heavy in weight. But at present Pakistan is not the market for it.

Auto Industry Development Program (AIDP) is necessary. Its implementation is required and time-to-time amendments are required in AIDP.

Complete localization can only be done once the volumes increase.

We have sufficient women workforce and they are performing in all divisions like Production, Supply, HR, Finance, Marketing etc.

To benefit Pak Suzuki employees and our vendors we started in house auto financing for them but not for the general consumers. We thought about it when our sales were down but the most difficult thing is how to do the recovery i.e. is why we are hesitant to do auto financing.

Nagao added that government should support vendors and also it should allow import of parts from India it would be cheaper than the parts imported from Japan.

There is a lot of potential in Pakistan as compare to other countries and the situation can improve if provided with stable government, improve law and order situation and stability of Pak rupee along with stable economy.

Offline abcd

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Re: PSMC -- Pak Suzuki Motor Co. Ltd.
« Reply #5 on: November 29, 2009, 11:23:32 AM »
Pak Suzuki urges complete ban on used car import


KARACHI: Pak Suzuki is about to launch a new hatchback model car next year, disclosed Hirofumi Nagao, CEO & MD of Pak Suzuki, in an exclusive interview with The News.

He said that initially the new model will be available in petrol but later as per demand it will also be available in CNG. It will be a manual car and if the demand for automatic transmission increases we can think about automatic transmission.

Pak Suzuki’s annual production capacity on two-shift basis is 150,000 units. “We have already increased the production capacity from 50,000 units in 2003 to 150,000 in 2007 ie 300 per cent. This production capacity is sufficient to cater to Suzuki demand in Pakistan market,” he added.

The ban on five-year-old used cars will help local manufacturers to boost sales and when volumes grow the production cost will go down, thus benefiting the end user. From five years the ban is now applicable to three-year old used cars but the used car import should be completely banned or the import duty should be very high so that used car import should stop.

Sharing his experience Nagao said: “When I was in India in the 1990’s there was very high duty on imports so this helped boost the local industry. The same should be done here in Pakistan to help the local auto manufacturer.”

The import of used cars does not bring in any investment nor it creates employment on the other hand local auto manufacturers have invested heavily in the country and thousands of employees are working in plants, Hirofumi Nagao said.

The global economic recession has also affected the auto sector in Pakistan. The other major factors contributing to slowdown in auto sector are high mark-up rates which have reduced auto financing from 70 per cent to 20 per cent, weak Pak rupee that has increased the cost of imported components, increase in utility charges has caused rise in production cost and the absence of long term auto policy, different kinds of taxes and security issues.

All the said factors contributed in reduction of sales, Nagao said, “we had to reduce our production as per market demand. Here I would like to mention one more thing that to benefit the customer we never passed on the major economic recession to them, we suffered a lot and still we are suffering from this recession we have reduced our prices so much, means we are facing global recession but we are continuously benefiting the customer.”

The recent increase in price is very minimal and it will not affect the customers much as the Pak Suzuki is still bearing most of the cost and it will not affect the sales. “We see improvement in sales in the near future,” Nagao said.

He added that total investment so far made is Rs10.3 billion. We do have our expansion plan intact. We have already acquired 125 acres for building another plant.

But it all depends upon future demand, future Government policies and future country and global conditions.

He said that Pak Suzuki is pioneer in automobile business in Pakistan. We have completed 25 years in developing motorization in Pakistan. We hold more than 50 per cent market share. These successes could not be achieved without support of Suzuki Motor Corporation Japan. One of the major areas benefited through this collaboration is technology transfer. We have successfully launched many new models and have highest percentage of localization in our products. Without technology transfer this could not have been possible.

About the law and order situation he said, “we Japanese believed that Punjab side like Lahore, Rawalpindi and adjacent areas are more peaceful and safer areas as compare to Sindh specially Karachi but since I have joined last year the perception has changed I feel that Karachi is much safer than Lahore or Rawalpindi as far as law and order situation is concerned.”

Through out the world when auto industry was suffering government came forward to support and assist but here though government is there to assist but auto industry need more cooperation to over come this situation.

Hybrid cars are getting popular but it would be very costly and other important issue is how to lighten the hybrid car battery, which is very heavy in weight. But at present Pakistan is not the market for it.

Auto Industry Development Program (AIDP) is necessary. Its implementation is required and time-to-time amendments are required in AIDP.

Complete localization can only be done once the volumes increase.

We have sufficient women workforce and they are performing in all divisions like Production, Supply, HR, Finance, Marketing etc.

To benefit Pak Suzuki employees and our vendors we started in house auto financing for them but not for the general consumers. We thought about it when our sales were down but the most difficult thing is how to do the recovery i.e. is why we are hesitant to do auto financing.

Nagao added that government should support vendors and also it should allow import of parts from India it would be cheaper than the parts imported from Japan.

There is a lot of potential in Pakistan as compare to other countries and the situation can improve if provided with stable government, improve law and order situation and stability of Pak rupee along with stable economy.
hazaroon khuhishain aisie kay har khuhish per dam nikly
Stock trading is a science and art too

Offline tosto220

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Re: PSMC -- Pak Suzuki Motor Co. Ltd.
« Reply #6 on: December 05, 2009, 12:59:42 PM »
Farzooq Bhai

Kia is main potential hai 160 tak janay ka

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Re: PSMC -- Pak Suzuki Motor Co. Ltd.
« Reply #7 on: December 05, 2009, 01:02:56 PM »
Farzooq Bhai

Kia is main potential hai 160 tak janay ka

report by js

2009 EPS revised to Rs5.6 / 4Q earnings intact

With below than expected 9M2009 result, we are revising
down full year 2009 earnings by 41% to Rs5.6/share from
Rs9.4/share earlier. However, we keep our fourth quarter
earnings estimate intact and expect earnings to grow 4x over
the previous quarter to Rs3/share at the back of easing cost
pressures and rise in car prices.

Recommendation: ‘Sell’

Persistent yen appreciation and rise in steel prices remain a
cause for concern for the industry. On the other hand,
monetary easing will be the key in stimulating car sales. With
PSMC trading at 2009E of 16.2x, we maintain our ‘Sell’
recommendation on the scrip.

Offline abcd

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Re: PSMC -- Pak Suzuki Motor Co. Ltd.
« Reply #8 on: December 06, 2009, 11:47:24 AM »
Farzooq Bhai

Kia is main potential hai 160 tak janay ka

report by js

2009 EPS revised to Rs5.6 / 4Q earnings intact

With below than expected 9M2009 result, we are revising
down full year 2009 earnings by 41% to Rs5.6/share from
Rs9.4/share earlier. However, we keep our fourth quarter
earnings estimate intact and expect earnings to grow 4x over
the previous quarter to Rs3/share at the back of easing cost
pressures and rise in car prices.

Recommendation: ‘Sell’

Persistent yen appreciation and rise in steel prices remain a
cause for concern for the industry. On the other hand,
monetary easing will be the key in stimulating car sales. With
PSMC trading at 2009E of 16.2x, we maintain our ‘Sell’
recommendation on the scrip.

stay away
Stock trading is a science and art too

Toshi

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Re: PSMC -- Pak Suzuki Motor Co. Ltd.
« Reply #9 on: December 09, 2009, 09:06:46 PM »
VW to buy stake in Suzuki for around 1.72 billion euros

FRANKFURT: German car giant Volkswagen and Suzuki of Japan revealed an alliance on Wednesday to give VW a solid footprint in the Indian automarket for about 1.72 billion euros (2.53 billion dollars).

One analyst said the cash-and-share deal could also accelerate restructuring of the global automobile industry.

VW is to buy a 19.9-per cent stake in Suzuki by January 2010, and Suzuki would also acquire a stake in Europe’s biggest carmaker, a joint statement said.

According to Suzuki, the 19.9-per cent stake is worth about 222.5 billion yen (1.72 billion euros, 2.53 billion dollars), and the statement said Suzuki ‘intends to invest up to one half of the amount received from Volkswagen into shares of Volkswagen.’

The two groups said they had ‘reached a common understanding to establish a close long-term strategic partnership.’

Auto analyst Tatsuya Mizuno at Mizuno Credit Advisory said ‘the alliance may accelerate a reshuffle of grouping of the industry. The global auto industry is now facing a turning point.

‘For VW, Suzuki is attractive as Suzuki is strong in small car businesses in developing countries, in particular India,’ Mizuno added.

Volkswagen already has a strong presence in China so the alliance would create a vast network across Asia, a region expected to soon lead the world in economic growth.

‘In terms of product portfolio, global distribution and manufacturing capacities, Volkswagen and Suzuki ideally complement each other,’ the statement said.

The agreement is another step in VW’s plan to overtake Toyota as the world’s biggest automaker by 2018.

VW has just bought 49.9 per cent of the German luxury sports car maker Porsche and will acquire all of that company by 2011, making Porsche its 10th brand.

The head of VW’s supervisory board, Ferdinand Piech, has said he sees VW eventually owning 12 brands, and the group is also interested in the German heavy-vehicle maker MAN which could compliment its Swedish truck unit Scania.

VW already owns around 30 per cent of the shares in MAN and could aim to create a strong commercial vehicle division with the two companies.

Commenting on the alliance with Suzuki however, the statement said ‘both companies will establish a cooperative relationship while respecting each other’s independence as a stand-alone entity.’The companies plan a joint approach to the growing worldwide demand for more environmentally friendly vehicles,’ it added.

Mizuno said that ‘after ending its alliance with GM, Suzuki needed to find a strong partner in order to survive tough competition in the global market.’

The global auto industry was weathering the crisis and is now entering into a new stage’ where strong offers of small, environmentally friendly cars will be important, Mizuno said.

According to the joint statement: ‘The management of Volkswagen and Suzuki have concluded that the complementary strengths of each company make for a perfect fit in exploiting their respective advantages as well as rising to the challenge of the global market.’

Investors cheered the news, and VW shares showed a gain of 2.14 per cent to 80.58 euros in morning trading on the Frankfurt stock exchange, while the DAX index of German blue-chips was 0.40 per cent lower overall.

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Re: PSMC -- Pak Suzuki Motor Co. Ltd.
« Reply #10 on: December 11, 2009, 11:37:27 AM »
Autos: Seasonal Decline


Auto sales witnessed a 19% MoM decline in Nov09 to 9,867 units from 12,224 units in Oct09 while 5MFY09 sales stand at 52,610 units, 8% higher than same period last year

PSMC, INDU and HCAR posted MoM decline in sales of 17%, 20% and 31% respectively

Our DCF based fair value for PSMC is PKR149/share calling for a BUY recommendation on the scrip. Similarly, INDU’s fair value is PKR288/share and is expected to post robust earnings for FY10 at PKR38.5 with a strong YoY rebound of 23% in unit sales
 

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Re: PSMC -- Pak Suzuki Motor Co. Ltd.
« Reply #11 on: December 11, 2009, 11:41:30 AM »
Autos: Seasonal Decline


Auto sales witnessed a 19% MoM decline in Nov09 to 9,867 units from 12,224 units in Oct09 while 5MFY09 sales stand at 52,610 units, 8% higher than same period last year

PSMC, INDU and HCAR posted MoM decline in sales of 17%, 20% and 31% respectively

Our DCF based fair value for PSMC is PKR149/share calling for a BUY recommendation on the scrip. Similarly, INDU’s fair value is PKR288/share and is expected to post robust earnings for FY10 at PKR38.5 with a strong YoY rebound of 23% in unit sales
 


Outlook

PKR continues to depreciate against USD and JPY while steel prices are also on their
move upwards. These factors in addition to inflation are likely to continue to put upward
pressure on manufacturing costs of the local assemblers and hence, adversely affect
margins. However, price increases by auto assemblers in Oct09 was a step towards
maintaining their existing margins if not increase them.

Furthermore, Volkswagen AG, Europe’s largest carmaker, is interested in buying a stake
in Suzuki Motor Corp. to gain access to the Japanese manufacturer’s small-car
technologies. This move may enhance PSMC’s product portfolio in addition to improving
the company’s operational efficiency further. PSMC also plans to launch “Swift” in the
1300cc segment in Jan10. Our DCF based fair value for the company stands at
PKR149/share calling for a BUY recommendation on the scrip.

Toshi

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Re: PSMC -- Pak Suzuki Motor Co. Ltd.
« Reply #12 on: December 16, 2009, 02:02:26 PM »
Our current stance on the sector is underweight. Pak Suzuki Motor Company
(PSMC) is offering an upside potential of 5% whereas INDU is trading at a
discount of 6% to its target price.

AHL Research

Toshi

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Re: PSMC -- Pak Suzuki Motor Co. Ltd.
« Reply #13 on: December 26, 2009, 05:16:25 AM »
Launch of new model: Suzuki to launch 1300cc car in January 2010

KARACHI: Pak Suzuki Motor Company (PSMC) is launching Suzuki Swift, a 1300cc hatchback car in mid-January 2010.

“The launch will directly compete with major players in this category i.e. Honda City (Honda Atlas) and Toyota Corolla (Indus Motors)”, an auto expert said in his comments. The company believes that the new model will cater the local market needs with powerful engine capacity in the hatchback category.

The PSMC is ambitious on its future prospects as it is targeting to achieve 1 percent market share in overall car sales next year.

Besides this, the company also shared the expected sales numbers for the month of December 2009.

The analyst Furqan Punjani of Topline Securities said the model was a great success in India due to its cheaper price and better fuel efficiency and consumers in Pakistan largely prefer hatchback vehicles.

During last 3 years, average 52 percent of the total cars were sold in the hatchback category, which includes 800cc and 1000cc cars.

The PSMC is targeting the market between the 1000cc (with hatchback) and 1300cc (Sedan look) category, however, the competition will be stiff as this segment is already crammed by two major competitors, Toyota Corolla (with 69 percent of market) and Honda City (17 percent share) in the Sedan category.

He said with Liana loosing market share in the 1300cc segment, the new model would support overall market share of the company. However, much depends on the pricing of the new model.

Pricing will be the key: If the prices in the 1300cc segment are analysed, showroom price of Toyota Corolla (Xli) is Rs 1.26 million followed by City Rs 1.23 million and Liana Rs 1.1 million.

Moreover, if compared with one notch lower category segment (i.e. 1000cc), average price of Alto and Cultus is Rs 598,000 and Rs 765,000, respectively. Experts believe the price of Swift could be approx. Rs 900,000 to Rs 1 million.

December sales expected to be around 5000 units: The company believes that it could sale around 5000 units in the ongoing month which will translate into a decline of 7.5 percent MoM due to year end affect and a robust growth of 122 percent YoY primarily led by low base affect.

Thus, cumulative sales during 1HFY10 would be around 31,379 units, down 4.15 percent YoY. However, company expects significant turn around in the sales growth in 2HFY10 due to low base affect. Last fiscal (Jan-June 2009), Pak Suzuki sold on an average 2,426 cars per month which is significantly lower than existing monthly car sales.

The PSMC expects annual sales of the company to grow by 33 percent to 67,000 in FY10 as compared to 50,000 cars sold last year.

Toshi

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Re: PSMC -- Pak Suzuki Motor Co. Ltd.
« Reply #14 on: December 31, 2009, 06:39:13 AM »
Suzuki raises car prices by upto Rs 25,000

By Moonis Ahmed

KARACHI: Pak Suzuki Motor Company Limited (PSMCL) has raised its car prices (excluding Liana) by Rs 10,000 to Rs 25,000 in response to the rising cost pressures amid appreciation of foreign currencies against the rupee. The prices will be effective from January 1, 2010.

“Frequent fluctuation in the foreign currency, price increase in petrochemicals and increase in utility charges are the main issues behind this increase,” Pak Suzuki spokesman Shafiq Ahmed Shaikh told Daily Times on Wednesday.

The dollar and yen have appreciated by 3.4 percent and 8.3 percent respectively, since July 01, 2009, he said adding that the prices of petrochemicals, including thinner paint and other chemicals have increased. “Besides this continuous increase in utility charges have compelled the company to increase prices,” he said.

The prices of Mehran models have been increased by Rs 9,000 to Rs 16,000, as prices of VX have been raised by Rs 15,000 to reach Rs 419,000 as compared to Rs 404,000, the prices of VXR have gone up to Rs 470,000 as compared to Rs 454,000 showing an increase of Rs 16,000. Similarly, the price of VX CNG after an increase of Rs 9,000 is Rs 464,000 as compared to Rs 455,000. Similarly, VXR CNG price after an increase of Rs 10,000 has gone up to Rs 514,000.

All Cultus models prices have been increased by Rs 25,000 as the prices of Cultus VXR, VXR CNG, VXL and VXL CNG now stand at Rs 790,000, Rs 830,000, Rs 850,000 and at Rs 897,000, respectively.

Rates of both Alto VXR and VXR CNG have been increased by Rs 15,000 to reach at Rs 613,000 and Rs 662,000, respectively, as compared to Rs 598,000 and at Rs 647,000 previously. Similarly, Bolan and Ravi have also witnessed price increases between Rs 2,000 to Rs 18,000 on their different models.

This increase in prices is at a time when series of terrorist attacks have rocked the country in the current month followed by the tragic suicide bomb attack on the Ashura procession killing over 40 people in the city on Monday. These tragic incidents may have sent shock waves among prospective buyers who may be thinking of suspending their plans for a new car at the eve of new year. The company production is completely up to requirement, however, there is very thin demand in 800cc cars, Shafiq said adding that the demand of 1000cc cars has shot up due to eve of new year. It is pertinent to mention that besides other auto companies including Indus Motors and Honda, the Pak Suzuki had also raised the prices in October 2009. Dealers said that the car markets were also witnessing thin presence of buyers. “Only individuals are in the market and most of them are purchasing on cash rather than opting for car financing through banks.”

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Re: PSMC -- Pak Suzuki Motor Co. Ltd.
« Reply #15 on: December 31, 2009, 10:48:25 AM »
PSMC: Upgrade to Neutral following price hike

We revise our PO for PSMC from PRs65/sh to PRs90/sh and upgrade our rating from Underperform to Neutral.

Based on 1) 1.7-3.3% price hike by PSMC, 2) downward revision in CY10E unit sales outlook to 35% YoY growth and 3) FX assumptions, we adjust our EPS estimate; revising down earnings for CY09E 36% but raising CY10E by 28%.

Our discussion with PSMC reveals that the interim CKD pricing arrangement to invoice purchases in US$ terms have been revised to previous Yen based pricing.

Performance of PSMC's upcoming Swift car could be a key stock price driver, while further delay in CKD import duty reduction and FX volatility remain key risks.

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Re: PSMC -- Pak Suzuki Motor Co. Ltd.
« Reply #16 on: December 31, 2009, 11:14:05 AM »
PSMC: Upgrade to Neutral following price hike

We revise our PO for PSMC from PRs65/sh to PRs90/sh and upgrade our rating from Underperform to Neutral.

Based on 1) 1.7-3.3% price hike by PSMC, 2) downward revision in CY10E unit sales outlook to 35% YoY growth and 3) FX assumptions, we adjust our EPS estimate; revising down earnings for CY09E 36% but raising CY10E by 28%.

Our discussion with PSMC reveals that the interim CKD pricing arrangement to invoice purchases in US$ terms have been revised to previous Yen based pricing.

Performance of PSMC's upcoming Swift car could be a key stock price driver, while further delay in CKD import duty reduction and FX volatility remain key risks.

I think it is buying time

Toshi

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Re: PSMC -- Pak Suzuki Motor Co. Ltd.
« Reply #17 on: January 06, 2010, 10:56:31 AM »
PSMC: SWIFT-ly filling the gap
???? PSMC intends to begin the New Year with the launch of Suzuki Swift in
Pakistan. It is going to be a hatch-back model in the compact-car category
with an engine capacity of 1300cc or above
???? Although in engine category Swift is expected to be in direct competition with
Corolla and City, however the hatch-back model is expected to cater to the
niche market previously filled out by the imported Toyota Vitz.
???? PSMC has also announced an increase in its car prices by 0.4% to 3.7% with
effect from Jan 1, 2010. The increase in prices bodes well for the company in
terms of higher revenues and better margins but may not be taken positively
by the consumers who have already delayed their purchase plans due to
poor law and order situation in the country.
???? We forecast PSMC’s EPS to stand at PKR18.6 for CY10E with a DCF-based
fair value of PKR149/share, signaling an upside of 68% from the current price
levels. BUY!

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Re: PSMC -- Pak Suzuki Motor Co. Ltd.
« Reply #18 on: January 07, 2010, 11:16:21 AM »
psmc on the move today
buy