Investment Concepts & Research - ICR

Investment Concepts & Research - ICR Investment Concepts & Research-ICR provides specialized services in Asset/portfolio Management and v

Investment Concepts & Research (ICR) provides specialized services of Financial Analysis, portfolio management, asset valuation & financial modeling. Funds managed under umbrella of ICR includes Pension fund, Aggressive Growth fund, Balanced fund, Capital Protected-moderate growth fund, Retirement plans & Cash funds. Disclaimer: All investments are subject to market movements. Factors beyond control of ICR may lead significant reduction in investment portfolio.

LSM is up by 14.8% during FY21 but PSX mainboard scrips are not responding to all the positive developments. FY17 has a ...
13/08/2021

LSM is up by 14.8% during FY21 but PSX mainboard scrips are not responding to all the positive developments. FY17 has a highest ever watermarked level of PSX whereas LSM growth was mere 5.8%. Expect outperformance of LSM reflection in stocks, go into to-be-bluechips. Avoid junk even if they offer exceptional returns, observe financial discipline and Invest, do not Speculate, whatsoever.

19/03/2021

Discount rate observes status quo inline with our estimates.
Forward Looking Guideline of MPS states that Discount Rate shall remain unchanged in the near term.

17/03/2021

POL prices largely left unchanged and strengthening PKR against key currencies. We expect no change in discount rate, status quo is likely to be observed.

Happy Investing :)

12/03/2021

Monetary Policy Note:

SBP may increase the discount rate by 50 basis, it is a big 'may'. Otherwise I see no change as the impact of surge in the price of Arab Light have not been passed through as yet (keeping down the inflation). The government is decreasing its levy gradually and consistently (currently at Rs.13 per litre vs Rs.46 earlier). Hence they impact is being absorbed by government by reducing its tax collection (they have already collected too much of taxes thru POL levies).

The SBP may increase the discount rate to preempt the potential increase in inflation amid impending POL price increase and Ramazan.

The ongoing economic activity, exchange rate, and other macroeconomic factors doesn't warrant an increase, if SBP decides anyway it will not be more than 50 bps.

Hold your positions. The market is rock solid.

Happy Investing :)

21/02/2021

Agha Steel Industries Limited:

In the backdrop of economic expansion and resultant LSM growth we are inclined towards cyclical plays. In our view cements have incorporated the impact of ongoing expansionary cycle at existing capacities. Incremental capacities will derive further price performance but that is a bit far into the future before the recently announced capacities come online.

Please note that if 100 tons of cement is consumed for erecting a certain infrastructure, it'll take 20 tons of steel to make it concrete.

There are various plays in the market space which are producing rebars and billets. However, we have preference of AGHA over ASTL and MUGHAL, mainly due to its higher profitability margins amongst competitors. The aforesaid margins stems from the technology employed by the company that is called Electric Arc Furnace. It takes lower energy, is flexible, and per tons cost efficiency also adds to the good profits. The company's incremental capacities along with latest state of the art technology namely Mi-Da is scheduled to come online by Sep-21 that will make it the largest producer of rebars in the market. Presently, the market is led by ASTL, however the company is unable to perform in tandem with the capacities.

In our view steel sector especially AGHA has not performed as warranted by the market, cement offtake, LSM uptick, and overall economic growth.

Our valuations have resulted in target price of Rs.55/share for Agha Steel Industries Limited based on latest numbers. The same is likely to be revised (upwards) once we receive 1HFY21 numbers.

Scrip: AGHA
Last Close: Rs.39.45
TP: Rs.55
Upside from last close: 39%

Happy Investing :)

20/02/2021

Aisha Steel Mills Limited - ASL

The HDGS line has come online and is resulting in juicy margins for the company. The capacity utilisation is on the higher side owing to uptick in automobile sales, white good sales, and construction activity. The leverage is under control. Coverage ratios are adequate, and the discount rate is expected to remain on the lower side till May-21. The company's cumulative loss position has turned around after recent quarter close. ISL on the other hand, despite being a larger entity didn't post higher numbers in lockstep.

Incorporating latest financial indicators of ASL depicting top-line of Rs.25B and a bottom line of Rs.2.5B, we arrive at a target price of Rs.45/ share on a conservative basis.

We are at the inflection point of the business cycle. It is recommended to stay in cyclical sectors.

Summary:

Scrip: ASL
Last Close: 24.01
TP: 45
Upside from last close: 87.5%

Happy Investing :)

20/02/2021

GATM expected EPS 2QFY21: 1.50/share with a top-line of around Rs.22B.
Cumulative EPS for 1HFY21 is expected around 2.90/ share and revenues at Rs.42B.

Expect no dividends whatsoever, the undertaken expansion doesn't warrant any dividend announcements.

30/08/2020

Hub Power Generation Company Limited:

On 10-Feb-2010, HUBC was hovering around Rs.31/ share. Paid a cumulative dividends of Rs.66/ share till date. At present the stock price is ~Rs.85/share.
CAGR: 26.22% p.a.
PSX Return: 19.75% (including DY at 8% p.a.)

Stock outperformed the underlying index mainly due to higher DY.

Cash flow streams from already commissioned and upcoming projects are expected to replace the potential dent due to amendment in IPP agreements. Base plant is operating at approximately zero factor load whereas CPHGCL is generating 58% factor load. TEL, TharNova, desalination plant, and share in SECMC is likely to jack up valuations in coming months.

13/04/2017

We recommend sitting on cash unless clear visibility on the political front is witnessed. Cash never bites you, taking on position against unknown risk can lead to magnified losses.

Good Luck!

21/01/2017

We revise our estimate upside for ASL to PKR50.86/share. Suggesting an upside of 146% from previous close. Our target price comes from price multiples of relevant players of steel sector. P/E and P/BV were key variables engaged by our model along with market capitalization weighting scheme.

We reitrate our Buy call on ASL for a price target of PKR50.86/share. Entry should be executed by keeping in perspective the technical indicators. Hold it on fundamental basis.

Good Luck Investors...........

11/01/2017

Aisha Steel Limited (ASL)- A gem in the making. We recommend Buy with a TP of Rs.35 based on FY2017 financial statement projections. Detailed analysis will be shared shortly.

FABL strong Buy with a TP of Rs.28/share as per our Projections.
22/11/2016

FABL strong Buy with a TP of Rs.28/share as per our Projections.

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