Author Topic: PSMC -- Pak Suzuki Motor Co. Ltd.  (Read 246259 times)

0 Members and 1 Guest are viewing this topic.

Offline MZ

  • Research
  • Senior Member
  • *****
  • Posts: 10142
  • Thanks Received: 33
    • View Profile
Re: PSMC -- Pak Suzuki Motor Co. Ltd.
« Reply #979 on: November 28, 2017, 09:22:39 PM »
Pak Suzuki Motor Company Limited (PSMC): New assemblers to disrupt monopoly in economy cars; Neutral

Tuesday, 28 November 2017

By: Intermarket Securities Limited
We resume coverage of PSMC with a Neutral stance and Dec’18 TP of PRs525/sh (blended DCF & P/E) which offers an upside of 5% and 4% dividend yield. Potential worsening of macros will likely slow down auto sales next year while new entrants are expected to give tough competition in the long run.
Bottom-line is expected to stay flat in CY18 on account of (i) challenges in completely passing on the impact of PKR depreciation and (ii) rising cost pressures to offsetting localization. Consequently our CY17/CY18F EPS estimates are PRs50.37/50.90, translating into P/E of 9.9/9.8x, where given macro/industry headwinds, sales growth and margins may soon peak for the company.
We think Punjab’s taxi scheme (earlier expected in FY18) is no more an upside as we are already assuming full capacity utilization for 1HCY18. However, any government tightening on used car imports presents a positive trigger.
We expect the growth momentum in auto sales to extend till 1HCY18 but the trend can potentially reverse in the next half on account of (i) likely PKR devaluation inflating prices (PSMC’s customers are most price sensitive) and (ii) interest rate reversal moderating growth in auto finance (c. 35% sales of PSMC are through auto finance). As we have assumed 100% capacity utilization in 1HCY18, we believe that Punjab government’s proposed taxi scheme is not an upside anymore.

Pakinvestorsguide

Re: PSMC -- Pak Suzuki Motor Co. Ltd.
« Reply #979 on: November 28, 2017, 09:22:39 PM »

Offline Farzooq

  • Administrator
  • Senior Member
  • *****
  • Posts: 21998
  • Thanks Received: 196
    • View Profile
Re: PSMC -- Pak Suzuki Motor Co. Ltd.
« Reply #980 on: December 04, 2017, 10:08:01 PM »
Finally unveiling Cultus AGS, Mega Carry, GR150 and GSX-R600. Four new products introduced by Pak Suzuki Motor Company Ltd.
TOP PICKS
Engro efert ogdc ppl pso dgkc luck hubc ubl hbl atrl nrl nml efoods aicl hcar searl

Offline SBM

  • Master Troll
  • Administrator
  • Senior Member
  • *****
  • Posts: 11780
  • Thanks Received: 100
  • Ouulman :)
    • View Profile
Re: PSMC -- Pak Suzuki Motor Co. Ltd.
« Reply #981 on: December 05, 2017, 10:12:43 AM »
Finally unveiling Cultus AGS, Mega Carry, GR150 and GSX-R600. Four new products introduced by Pak Suzuki Motor Company Ltd.

PKR 1,528,000 for the cultus auto
I hate waking up.

Offline Farzooq

  • Administrator
  • Senior Member
  • *****
  • Posts: 21998
  • Thanks Received: 196
    • View Profile
Re: PSMC -- Pak Suzuki Motor Co. Ltd.
« Reply #982 on: December 18, 2017, 12:55:32 PM »
PSMC: Earnings and TP revised down, 'Buy' maintained with upside of 31%< /SPAN>
December 18, 2017 (JS Research)


We update our investment case on Pak Suzuki Motor Company (PSMC) following 9M2017 results, where we revise down our earnings forecasts for 2017E-2020F by 15-27%.
Downwards revision in earnings' estimates is owing to (1) expected Pak Rupee depreciation against US$, (2) rising steel prices, and (3) increase in oil prices.
Our Dec-2018 Target Price is lowered to Rs620 (previously Rs793), however presenting an upside of 31% due to steep market correction. The stock currently trades at 2018F P/E of 8.4x, with a D/Y of 5%.
We now expect earnings to grow by a CAGR of 17% during 2016A-2020F, mainly on the back of growing demand for automobiles, with PSMC's 1,000cc segment (comprising Wagon-R and Cultus) to exhibit rapid growth.
We flag that our earnings' forecasts factor in declining margins, due to aforementioned deteriorating macros.
We anticipate marginal impact on earnings from addition of new models, namely Cultus AGS (automated transmission) and Mega Carry (CBU pickup), due to high prices relative to competition.

(Rs) 2017F 2018F 2019F 2020F
Previous EPS 63.29 67.30 75.55 85.01
Revised EPS 53.98 56.12 59.20 62.14
% change -15% -17% -22% -27%
Previous DPS 9.00 12.00 14.00 15.00
Revised DPS 22.00 22.00 24.00 25.00
% change 144% 83% 71% 67%
EPS / DPS Revision
Source:JS Research
TOP PICKS
Engro efert ogdc ppl pso dgkc luck hubc ubl hbl atrl nrl nml efoods aicl hcar searl

Offline Farzooq

  • Administrator
  • Senior Member
  • *****
  • Posts: 21998
  • Thanks Received: 196
    • View Profile
Re: PSMC -- Pak Suzuki Motor Co. Ltd.
« Reply #983 on: January 01, 2018, 10:45:36 PM »
PSMC raises car prices by Rs10k-Rs20k
January 01, 2018 (JS Research Beep)

As per Pak Suzuki Motor Company (PSMC)'s official website, the company has raised the prices of some of its variants, effective from the January 1, 2018, by Rs10k-Rs20k. Prices of Bolan and Ravi have been increased by Rs10k, Mehran VX and VXR by Rs10k (CNG variants prices unchanged), while prices of Wagon-R VXR and VXL have been hiked by Rs20k. The move was widely anticipated due to the recent Pak rupee devaluation against the US$, which would push up costs of raw materials for auto assemblers. To recall, one of the PSMC's competitors, Indus Motor Company (INDU) had recently increased prices of some of its Corolla variants in response to the Pak Rupee devaluation.
We believe the price increase will enable PSMC to pass on the impact of rising costs on to end consumers without any significant dent to volumes, given current high demand.
We have a 'Buy' rating on PSMC, with a Dec-18 Target Price of Rs620.
TOP PICKS
Engro efert ogdc ppl pso dgkc luck hubc ubl hbl atrl nrl nml efoods aicl hcar searl

Offline Zar Ameen

  • Value Seeker
  • Active Member
  • ***
  • Posts: 598
  • Thanks Received: 0
    • View Profile
Re: PSMC -- Pak Suzuki Motor Co. Ltd.
« Reply #984 on: February 07, 2018, 07:14:45 PM »
Auto Sales for Jan-2018 expected 12% YoY higher

 February 06, 2018 (JS Research Beep)

We expect Auto sales (Cars & LCVs) to clock in at 23,381 units during the month of Jan-2018, up by 12% YoY, compared to unit sales to 20,884 units of Jan-2017.

Pak Suzuki Motor Company (PSMC) is expected to lead growth with 22% YoY increase in volumes, owing to high demand for Wagon-R and Cultus. Sales for PSMC's smaller cars, we believe, would also receive a boost from the recent issues being faced by used car importers, as the government continues to tighten conditions for importers amid a widening trade deficit.

Honda Atlas Cars (HCAR) is expected to post 12% YoY growth in unit sales, aided by BR-V sales. Indus Motor Company (INDU) is expected to post a decline of 7% YoY in unit sales, on account of potential 17% YoY decline in Corolla sales, which we believe would be because of cancelled bookings of profiteers to provide shorter lead times to genuine customers. On the positive side, both other variants for INDU are expected to record impressive growths, with Fortuner expected to show record-high sales during the month.

 

We view the numbers as positive for all three assemblers. For INDU, although overall sales are expected to decline, as mentioned, sales of higher margin variants are expected to depict rising trends. With the debottlenecking to be completed during 4QFY18 (addition of 10k units), capacity issues are likely to be mitigated. We maintain 'Buy' on both INDU and PSMC.

 



 
Top Picks: MUGHAL, PREMA, TGL, CPPL, EFERT, ICL

Offline muzdani

  • Junior Member
  • **
  • Posts: 100
  • Thanks Received: 0
    • View Profile
Re: PSMC -- Pak Suzuki Motor Co. Ltd.
« Reply #985 on: March 06, 2018, 09:55:28 AM »
When i s the new alto lunching and what will be the effect if psmc stops producing mehran

Offline Farzooq

  • Administrator
  • Senior Member
  • *****
  • Posts: 21998
  • Thanks Received: 196
    • View Profile
Re: PSMC -- Pak Suzuki Motor Co. Ltd.
« Reply #986 on: March 15, 2018, 11:47:40 AM »
PSMC: EPS to grow 34% YoY in 4Q2017, volume growth the key factor
March 15, 2018 (JS Research)

The Board of Directors of Pak Suzuki Motor Company (PSMC) is scheduled to meet on March 19, 2018 to discuss its 2017 financial results.
We anticipate the company to announce 2017 EPS of Rs52.26, up 55% YoY from Rs33.69 in 2016. Alongside the result, we estimate the company to announce final cash dividend of Rs22/share.
For 4Q2017, we expect EPS to clock in at Rs14.62, up 34% YoY, where earnings growth is estimated on the back of 34% YoY rise in volumes. However, margins are expected to erode by 89bps YoY due to higher steel prices.
We maintain 'Buy' on PSMC with a Target Price of Rs620. The stock is trading at a 2018E P/E of 8.9x.
TOP PICKS
Engro efert ogdc ppl pso dgkc luck hubc ubl hbl atrl nrl nml efoods aicl hcar searl

Offline stuka

  • Senior Member
  • *****
  • Posts: 1145
  • Thanks Received: 0
    • View Profile
Re: PSMC -- Pak Suzuki Motor Co. Ltd.
« Reply #987 on: March 19, 2018, 02:06:59 PM »
no interest from janta.....
FASM, EFERT, NCL, DOL, TGL, SEPL

Offline stuka

  • Senior Member
  • *****
  • Posts: 1145
  • Thanks Received: 0
    • View Profile
Re: PSMC -- Pak Suzuki Motor Co. Ltd.
« Reply #988 on: March 19, 2018, 03:44:05 PM »
eps below expectation. the dividend is good. book closure is not far.

should hold for 530 i think.

what do you say, seniors?
FASM, EFERT, NCL, DOL, TGL, SEPL

Offline zelmc

  • Junior Member
  • **
  • Posts: 354
  • Thanks Received: 0
    • View Profile
Re: PSMC -- Pak Suzuki Motor Co. Ltd.
« Reply #989 on: March 19, 2018, 06:29:33 PM »
Last quarter result is much below expectations, considering the number of vehicles sold in 4th quarter. I was expecting an eps of around 52 for FY, but PKR devaluation did its damage I think. First quarter should be ok as they have increased prices twice during current quarter.

Offline SBM

  • Master Troll
  • Administrator
  • Senior Member
  • *****
  • Posts: 11780
  • Thanks Received: 100
  • Ouulman :)
    • View Profile
Re: PSMC -- Pak Suzuki Motor Co. Ltd.
« Reply #990 on: March 19, 2018, 06:41:46 PM »
Last quarter result is much below expectations, considering the number of vehicles sold in 4th quarter. I was expecting an eps of around 52 for FY, but PKR devaluation did its damage I think. First quarter should be ok as they have increased prices twice during current quarter.

taxation was higher because they booked extra taxation on previous year result
I hate waking up.

Offline Farzooq

  • Administrator
  • Senior Member
  • *****
  • Posts: 21998
  • Thanks Received: 196
    • View Profile
Re: PSMC -- Pak Suzuki Motor Co. Ltd.
« Reply #991 on: March 19, 2018, 09:41:50 PM »
TOP PICKS
Engro efert ogdc ppl pso dgkc luck hubc ubl hbl atrl nrl nml efoods aicl hcar searl

Offline Zar Ameen

  • Value Seeker
  • Active Member
  • ***
  • Posts: 598
  • Thanks Received: 0
    • View Profile
Re: PSMC -- Pak Suzuki Motor Co. Ltd.
« Reply #992 on: March 20, 2018, 12:07:28 AM »
Last quarter result is much below expectations, considering the number of vehicles sold in 4th quarter. I was expecting an eps of around 52 for FY, but PKR devaluation did its damage I think. First quarter should be ok as they have increased prices twice during current quarter.

taxation was higher because they booked extra taxation on previous year result
1Q will be boom boom on account of:

1-High growth in sales volume
2-Rising cost pass on through price raised from Feb 01, 2018
3-almost stable PKR
4-Normal taxation
 :good
Top Picks: MUGHAL, PREMA, TGL, CPPL, EFERT, ICL

Offline Alpha

  • Senior Member
  • *****
  • Posts: 1023
  • Thanks Received: 1
    • View Profile
Re: PSMC -- Pak Suzuki Motor Co. Ltd.
« Reply #993 on: March 20, 2018, 07:31:34 PM »
Last quarter result is much below expectations, considering the number of vehicles sold in 4th quarter. I was expecting an eps of around 52 for FY, but PKR devaluation did its damage I think. First quarter should be ok as they have increased prices twice during current quarter.

taxation was higher because they booked extra taxation on previous year result
1Q will be boom boom on account of:

1-High growth in sales volume
2-Rising cost pass on through price raised from Feb 01, 2018
3-almost stable PKR
4-Normal taxation
 :good

Not after todays 5% dev  :(

Offline Thelma

  • Active Member
  • ***
  • Posts: 592
  • Thanks Received: 0
    • View Profile
Re: PSMC -- Pak Suzuki Motor Co. Ltd.
« Reply #994 on: March 28, 2018, 03:11:13 PM »
Last quarter result is much below expectations, considering the number of vehicles sold in 4th quarter. I was expecting an eps of around 52 for FY, but PKR devaluation did its damage I think. First quarter should be ok as they have increased prices twice during current quarter.

taxation was higher because they booked extra taxation on previous year result
Should I buy it for divident only ...please recommend ..would want to sell after X div ...good or bad

Offline Imran712

  • New Member
  • *
  • Posts: 17
  • Thanks Received: 0
    • View Profile
Re: PSMC -- Pak Suzuki Motor Co. Ltd.
« Reply #995 on: April 19, 2018, 11:29:21 PM »
Experts which eps 1Q2018 expected ?

Offline Farzooq

  • Administrator
  • Senior Member
  • *****
  • Posts: 21998
  • Thanks Received: 196
    • View Profile
Re: PSMC -- Pak Suzuki Motor Co. Ltd.
« Reply #996 on: May 30, 2018, 12:02:33 PM »
Pak Suzuki Motors Company Ltd: Structural change to hit demand growth; downgrade to Neutral

We revisit our investment thesis of Pak Suzuki Motors Company (PSMC) and downgrade the stock to Neutral, post 1Q detailed accounts and our discussion with the management on major structural changes in sector’s demand dynamics.
Consequently we cut our earnings estimates down to PKR45/43.8 for CY18/19E, to incorporate; (i) reduced sales (from 8% growth to 11% drop in CY18) on account of prohibition of non-filers to book vehicles and (ii) more constrained margin environment on the back of growing competition beyond CY19/20 and devaluation risk affecting company’s pricing power.

Our revised DCF-based TP of PKR494.93/sh offers limited 9% upside at last closing. The stock trades at CY18/19E P/E of 10.1/10.4 which is inline with its historical average over FY15-17.

We contend that valuations are likely to depict (lower margins and linear growth) discount in coming years compared to valuation over FY15-FY17. This is concurrent to valuation discount seen in FY12-FY14 (12% discount vis-à-vis KSE-100) in the similar environment on margin/sales.

Key upside or downside risks include: (i) any favorable change in rules for car purchase by non-tax compliant buyer, (ii)better than expected demand , (iii) higher than anticipated change in exchange rate and (iv) policy rate adjustments.

Structural changes to hit growth: Incorporating the impact of upcoming structural changes in demand dynamics and 1Q detailed accounts, we revisit our investment thesis for Pak Suzuki Motors Company (PSMC) and revise our earnings estimate to PKR45/43.8 for CY18/19E. This is driven by (i) cut in our sales growth estimate by 11%/6% for CY18E/CY19E to account for prohibition of non-filers on new vehicles booking and (ii) margins revised down to 8.5% over the horizon from earlier 10.9% owing to reduced pricing power. Consequently, we downgrade our stock to Neutral from Buy, with our revised DCF based TP at PKR494.93/sh offering 9% upside at current level.

Non-filers barred from purchase of new vehicles: Taking cue from management guidance, where 40-45% of the total sales are made to the non-filers, we believe overall impact on sales is likely to be more pronounced in at least 2HCY18. However, possibility of non-tax compliant buyers finding alternative options to work around the new regulation presented in the budget remains (short-term financing by banks, leasing companies, dealer purchase, increased number of operating leases) and may dilute the impact of new regulation.

Risk emerges on margins: We believe concerns on margins on the back of currency devaluation and potential competition has led to stock performance -9.4% in past 6-months. Margin have come off from 13.6% in 2015 to 7.8% in 1Q18. We believe environment for margin has become challenging and expect margin to hover at 8.5% vs 10.9% over FY14-17. We attribute this to reduced pricing power due to following reasons:

#1. Currency deval risk: Amid two rounds of devaluation of PKR/USD in Dec and Mar’18, PSMC has taken up two rounds of price hike in Jan'18 and Mar'18, hence only partially passing on the impact of deval. Understandably, PSMC’s buyers being sensitive to price hikes, the heightened deval risk limits margin upside for the company. We expect another round of price hike(2-3%) in near term to support margin in CY18 around 9.4% vs last year’s 9.7%.

#2. Lower segment product portfolio to increase: Post recent release of ADP 2016-21 providing various incentives on import of new machinery and import of CBU has enticed number of investors to cater strong local demand. Various International players in collaboration with local incumbents are in process of investing through Greenfield and Brownfield projects. Also, Nissan Motors along with Ghandhara motors are in process to launch 'Nissan Go' by next year end, whereas United motors, another local player, is set to introduce 'United Bravo' in smaller variant category. PSMC themselves, are planning to replace Mehran800cc with new Alto660cc in next year. In this backdrop we see competition in the lower variant segment intensifying which may affect pricing power of the incumbents in our view.

Investment perspective: We believe PSMC’s stock price has responded to growing risks to volume and margin. With risks to both market share and volumes, we believe the valuation may continue to show discount to market, reversing the premium seen over FY15-17. We assign Neutral rating to PSMC on our DCF-based target price of PKR494.93/sh.   

Key upside and downside risks include:

Any favorable change in rules for car purchase by non-tax compliant buyer-Possibility of relaxation on recently introduced restriction is high, in our view, particularly for low-end segment where PSMC operates.
Possibility of  favorable decision regarding award of Brownfield status to PSMC as they are in negotiations with the government may lead to capacity expansion. 
Better than expected demand-We currently expect sales for low-end segment to drop 11% CY18.
Higher than anticipated change in exchange rate-This may further test the pricing power of the company.  ?   
Policy rate adjustments-Car financing currently accounts for 30% of total sales. Increased policy rate will push the cost of financing higher and may impact the demand. So far, the central bank has increased policy rate by 75bps since Jan’18 and we expect at least one more increase in policy rate of 25bps to 6.75%.

bma
TOP PICKS
Engro efert ogdc ppl pso dgkc luck hubc ubl hbl atrl nrl nml efoods aicl hcar searl

Offline Rokie

  • Junior Member
  • **
  • Posts: 465
  • Thanks Received: 0
    • View Profile
Re: PSMC -- Pak Suzuki Motor Co. Ltd.
« Reply #997 on: August 28, 2018, 01:46:35 PM »
PSMC ki koi update dega senior?

Offline usman1947

  • New Member
  • *
  • Posts: 18
  • Thanks Received: 0
    • View Profile
Re: PSMC -- Pak Suzuki Motor Co. Ltd.
« Reply #998 on: August 28, 2018, 02:49:18 PM »
Any update. Why it is going down?