Author Topic: Auto Sector  (Read 151577 times)

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Offline aharoon

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Re: Auto Sector
« Reply #879 on: June 13, 2018, 11:09:16 PM »
Renault ' KIA ' Nissan aur kuch pata nahin about dewan.. Chinese maal alag..
Itnay competition main INDU PSMC HCAR waghaira Kay margins bohat limited reh jain gay..
Yeh baat bhi notice plz

Pakinvestorsguide

Re: Auto Sector
« Reply #879 on: June 13, 2018, 11:09:16 PM »

Offline Farzooq

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Re: Auto Sector
« Reply #880 on: June 14, 2018, 11:51:10 AM »
New entrants investing ~US$820mn
We shed light on auto companies that are entering the local market, their potential
investment size, capacities and the various segments that they are expected to
target during the initial years of entry. To recall, with the introduction of the new
Auto Policy (ADP 16-21) – which provides duty and other incentives to new
entrants over existing assemblers – there has been a flurry of companies that have
pledged investment in the local auto sector to grab a potential chunk of the
booming auto market.
These include the likes of Kia Motors from South Korea in collaboration with the
Lucky Group (Kia-Lucky Motors) and Hyundai Motors from South Korea with Nishat
Group (Hyundai Nishat Motors). As can be seen from the table, the potential
investments coming from the new entrants are estimated around US$820mn
(including US$110mn pending cases). Eight companies have been granted
Greenfield status so far under the Auto Policy, while two companies have received
Brownfield status and some cases are pending for approval. Renault, as per media
reports is expected to enter the market in collaboration with Al Futtaim Motors has
not yet completed the application process as per our channel checks, and is
therefore not included in this analysis.

Tough times ahead for existing assemblers
Total additional capacity from new entrants is estimated at 192,000 units, the bulk
of which is expected to directly target the market dominated by existing players
such as Pak Suzuki Motors (PSMC), Indus Motor Company (INDU) and Honda
Atlas Cars (HCAR). The total automotive capacity (Passenger Cars, LCVs, SUVs)
of the country is expected to increase from existing ~280k units (including INDU’s
10k units CAPEX and FAW) to ~465k units within the next 2-3 years, which may
limit the breathing space for existing OEMs. We believe that existing OEMs can
likely employ a strategy of product diversification in order for them to protect their
market share.
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Offline rameez1

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Re: Auto Sector
« Reply #881 on: June 15, 2018, 01:37:52 AM »
I think Indus and HCAR will still be able to retain their market share due to no direct competition in their category of vehicles. PSMC will take the biggest hit as there is direct competition in 1000CC cars with the new entrants.

Offline dr.muhammad zia

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I'm friends with the monster that's under my bed
Get along with the voices inside of my head
You're trying to save me, stop holding your breath
And you think I'm crazy, yeah, you think I'm crazy,WELL THATS NOT FAIR

Offline Farzooq

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Re: Auto Sector
« Reply #883 on: July 06, 2018, 01:06:10 PM »
Autos: Jun-2018 volumes to grow 20% YoY, headwinds to limit future growth
July 06, 2018 (JS Research)

We preview auto sales for the month of Jun-2018, where we expect volumes to grow by 20% YoY.
Honda Atlas Cars (HCAR) volumes are expected to grow by 27% YoY, followed by 26% YoY and 15% YoY for Indus Motor Company (INDU) and Pak Suzuki Motor Company (PSMC), respectively, owing to lesser Ramadan days coinciding with Jun-2018 compared to Jun-2017.
For tractors, Millat Tractors (MTL) and Al-Ghazi Tractors (AGTL) are anticipated to record sequential declines of 45% MoM and 40% MoM, respectively owing to completion of current Kharif sowing season.
FY18 auto volumes are expected to clock in at a record high of 258,654 units, up 21% YoY, however sector (new entrants, budget restriction on non-filers) and macro (rising interest rates and CPI) headwinds are expected to keep volumes of the Big Three in check going forward.
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Offline Farzooq

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Re: Auto Sector
« Reply #884 on: July 12, 2018, 11:50:50 AM »
 FY18 closed on a strong note, regulatory challenge ahead!

As per the latest data released by Pakistan Automotive Manufacturers Association (PAMA), sales for total passenger cars and LCVs in Jun’18 clocked-in at 18k units, down 15% MoM but up 20% YoY. 

Cumulatively, total sales in FY18 increased by 21% YoY, achieving highest ever sales of 258k units on the back of strong demand dynamics and new model attraction (Honda’s BR-V, PSMC’s Cultus, INDU’s Hilux Revo & Fortuner).

Honda Atlas Cars (HCAR) remained the top performer followed by Pak Suzuki (PSMC) depicting growth of 31% and 26% YoY, respectively in FY18. Whereas, INDU grew by 5% YoY due to capacity bottlenecks which are expected to resolve in ongoing quarter.

Tractors’ sales too closed the year on a strong note, growing 29% YoY, taking FY18 sales to highest ever number of 71k units (a high seen after eight years-  sales stood at 70.6k units in FY10). The growth is reflective of pro-agri policies and improving farm-economics. AGTL remained top performer during FY18 with sales up by 40% YoY.

Trucks and buses trend normalized during Jun’18 with a decline of 17% MoM. On cumulative basis, sales elevated by 15% YoY in FY18 on the back of strong demand from CPEC related activity.

Going forward, we highlight that recent budgetary measure prohibiting non-filers from purchasing new vehicle may keep auto sales in-check in FY19, where we project 1QFY19 sales to decline by 8%.

We maintain our liking for Indus Motors Limited (INDU) underpinned by strong balance sheet, superior margins and highest D/Y of 8% among the peers with a TP of PKR1,798/sh.

bma
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Offline ZafarAAA

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Re: Auto Sector
« Reply #885 on: July 17, 2018, 11:56:09 AM »
Expression ki waja say Cement sector ka hal dekh kar auto sector nay kuch zada hi tension lay li hy

Offline MZ

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Re: Auto Sector
« Reply #886 on: July 27, 2018, 07:10:20 PM »
Elixir Insight


Automobile Assemblers
INDU & HCAR Result Previews

·         We expect INDU’s 4QFY18 EPS to clock in at PKR46.4, taking FY18E earnings to PKR194/share. We also project the company to declare final cash dividend of PKR45/share taking full year dividend to PKR 140/share.

·         We project HCAR’s 1QMY19 EPS to stand at PKR7.73 (down 47%YoY/20%QoQ) as we expect rising steel prices and PKR depreciation to curtail gross margin to 8% (down 6pptsYoY/2pptsQoQ).

·         We also update our investment case considering ongoing volatility in PKR/USD and incorporate higher risk free rate at 10% (from 8.5% earlier). Our rolled-forward Jun-19 PT’s for INDU and HCAR now stand at PKR1,700 and PKR430.

·         Despite potential upsides, we maintain Underweight stance on the sector as we eye headwinds from 1) potential economic slowdown, 2) margin attrition due to PKR depreciation and 3) loss in market share due to new entrants.

INDU – Super Tax to Suppress 4QFY18 Earnings:  We project Indus Motors Company Limited (INDU) to report 4QFY18 EPS of PKR46.4, up 32%YoY but down 15% sequentially. To a great extent, the QoQ EPS decline can be attributed to likely booking of Super Tax during the quarter (3% of FY18 PBT).

During 4QFY18, PKR depreciated by 5% against USD and 4% against Japanese Yen. To absorb the impact of devaluation, the company raised prices of Corolla, Hilux and Fortuner by 3-5%. Offtakes also improved by 2%QoQ to 16,641 units during the quarter. The surge in offtakes can be accredited to increased demand for Fortuner (up 31%QoQ) due to Election’s seasonality impact.

Coming to the topline, we expect the company to report revenue of PKR37.6bn (up 35%YoY/2%QoQ) in 4QFY18 due to rise in prices along with volumetric growth. In terms of Cost of Sales, we anticipate a 33%YoY and 2%QoQ increase to PKR31.0bn on the back of PKR depreciation and surge in Steel prices. Resultantly, we project gross margins of the company at 18% (up 1pptYoY) during 4QFY18.

For FY18, INDU’s sales clocked in at 63,068 units (up 5%YoY). As a result of price hikes and volumetric growth, we expect the topline of the company to grow by 23% (to PKR137.8bn) during the year and project the company’s FY18 EPS to clock in at PKR194/share which marks a growth of 18%YoY despite slowdown in Corolla’s sales (down 2%YoY) due to a tilt in company’s strategy towards SUV segment (Fortuner’s sales in FY18 stood at 4,186 units - up 2xYoY). The effective corporate tax rate is expected to clock in at 33% during the year (inclusive of 3% super tax likely to be booked in the outgoing quarter).

We also expect INDU to announce a final dividend of PKR45/share taking full year dividend to PKR140/share which translates into payout ratio of 72%, in-line with its historic trend.

HCAR - PKR/USD depreciation to dent GM’s: The Board of Honda Atlas Cars (Pakistan) Limited (HCAR) is meeting on July 28, 2018 to approve 1QMY19 financial results (likely to be announced on July 30, 2018). We project the company to report 1QMY19 EPS of PKR7.73, down 47%YoY and 20% sequentially. The decline in profitability is projected on account of 1) gross margin deterioration and 2) imposition of super tax. In-line with its historical trend, we do not expect the company to declare any cash dividend during the quarter.

The outgoing quarter recorded a depreciation of 11%YoY/5%QoQ in average PKR against USD and 13%YoY/4%QoQ against Japanese Yen. To incorporate the Forex swing, the company raised prices of City/Civic/BR-V by 5%/3%/1% in Apr-18. Yet we project HCAR’s gross margin to dip to 8% in 1QMY19 (down 6pptsYoY / 2pptsQoQ).

In our projections, we have assumed a Super Tax of 2% on HCAR’s 1QMY19 PBT, due to its recurring nature under Finance Act 2018-19. However in line with its historical trend, the company is likely to book Super Tax of 3% on MY18 PBT in 2QMY19 (in case the tax on MY18 is booked in 1QMY19, our EPS projection will be shaved off by ~26% to PKR5.74/share).

Revising Estimates and PT’s - Maintain Underweight: We have updated our investment case with revisions in exchange rate forecast (average PKR/USD at 132 in FY19) and higher risk free rate of 10% (from earlier 8.5%). This takes our rolled-forward INDU’s Jun-19 PT to PKR1700/share. Similarly, we slash down HCAR’s Jun-19 PT to PKR430/share (from earlier PKR480/share). While both the stocks offer upsides, we maintain Underweight stance on the sector as we eye headwinds from 1) potential economic slowdown, 2) margin attrition due to PKR depreciation and 3) loss in market share due to new entrants.


Offline Farzooq

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Re: Auto Sector
« Reply #887 on: August 03, 2018, 12:05:47 PM »
Auto sales growth solid in Jul-2018 at 9% YoY; downside risks persist for FY19
August 03, 2018 (JS Research)

We preview auto sales for the month of Jul-2018, where we expect volumes to grow by 9% YoY.
We expect volumes to remain strong during first two months of FY19, as OEMs moved up deliveries to non-filers before the June 30, 2018 deadline and hence deliveries to filers were delayed and are expected to reflect in coming two months at least.
Our view of slowdown in volumes for FY19 remains intact, where the impact of ban on non-filers is expected to weigh down auto sector demand.
Indus Motor Company (INDU) is expected to lead volumes with 18% YoY growth where election year factor could play a role in volumes. Honda Atlas Cars (HCAR) volumes are expected to grow by 10% YoY, while Pak Suzuki Motor (PSMC) unit sales could edge up by 4% YoY
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Offline Farzooq

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Re: Auto Sector
« Reply #888 on: August 13, 2018, 12:32:17 PM »
Passenger Car Sales Grow by 21%MoM Due to Low-Base Effect

·         Passenger cars have shown a robust growth of 21%MoM during Jul-18 to 18,875 units due to low-base effect. On YoY basis, sales improved by 16%. The numbers are in-line with our estimates.

·         Amongst the assemblers, HCAR showed strongest growth during the month (up 37%MoM) led by Civic and City sales (up 57%MoM). INDU registered growth of 20%MoM mainly due to sharp growth in Corolla (up 29%MoM), while PSMC posted a moderate growth of 5%MoM led by Swift and Cultus performance (up 38%MoM and 22%MoM, respectively).

·         During the year, Tractors and Pickups sales declined by 16%YoY and 18%YoY, respectively while Jeeps recorded a sales drop of 38%YoY as Election led demand came to its completion.

·         We maintain Underweight stance on the sector on the back of weakness in PKR, expected slowdown in demand, interest rate liftoff, restriction of vehicle purchase by non-filers, and upcoming entry of new players.

Low-Base Effect Drove MoM Sales Growth for Passenger Cars: As per the latest Automobile Sales numbers released by Pakistan Automotive Manufacturers Association (PAMA), Passenger Car sales grew by 16%YoY to 18,875 units, in-line with our estimates. Coming to month wise data, sales jumped by 21%MoM owing to low base due to limited production hours in Ramadan and Eid holidays.

(Please refer to the enclosed table for detailed sales numbers)

HCAR’s 37%MoM Growth Led by Civic & City: Honda Atlas Cars (HCAR) witnessed highest growth of 37%MoM amongst its peers and sold 4,981 units during the month. The growth mainly stemmed from Civic and City (4,609 units, up 57%MoM) whereas BR-V sales posted a decline of 46%MoM to 372 units. Reason for the growth can be linked with capacity enhancement. On YoY basis, HCAR posted a 10% growth on the back of 21%YoY jump in Civic and City sales.

Meanwhile Automobile sales for Indus Motors Company (INDU) also showed a growth of 20%MoM to 5,468 units. The jump came on the back of sharp growth in Corolla’s sales (up 29%MoM). On the other hand, Pak Suzuki Motors (PSMC) exhibited a growth of 5%MoM to 10,895 units due to growth in Swift and Cultus (up 38% and 22% MoM, respectively). The growth in offtakes can be attributed to low base effect due to limited production hours in Ramadan and Eid Holidays in June. On YoY basis, INDU and PSMC posted growths of 18% and 4%, respectively.

Jeeps exhibited 46%MoM Decline: During the month, Jeeps’ sales clocked in at 592 units (down 46%MoM) as Fortuner and BR-V posted a decline of 47%MoM and 46%MoM, respectively. Both incumbents also exhibited 19%YoY and 46%YoY decline too. Reason for the decline in Fortuner sales can be attributed to completion of election-year led demand cycle and decline for BR-V sales can be linked with consumer’s fading excitement after initial euphoria.

l-18 Sales Weak for Tractors and Pickups: Tractors’ sales decreased by 16%YoY to 3,872 units in Jul-18. Within this segment, Al-Ghazi Tractors’ (AGTL) sales declined by 46%YoY while Millat Tractor (MTL) exhibited a decline of 3%YoY. Reason for the decline can be linked to election year happenings taking farmers’ focus away from core agrarian activities.

Pick-ups sales declined by 18%YoY in Jul-18, but improved 6%MoM on the back of 16%MoM increase in Hilux sales.

Maintain Underweight: We maintain our skepticism on the sector as incumbent assemblers are bound to witness margin attrition, loss in pricing power and market share decline amidst a flurry of upcoming new players, interest rate hikes and ongoing PKR depreciation. Hence we maintain Underweight stance on the sector.
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