Escolar Documentos
Profissional Documentos
Cultura Documentos
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Budget FY16
Content
Pakistan Economy
18
19
Budget at a Glance
20
Key Statistics
Key Sectors
Cement Positive
22
23
24
25
Fertilizer Neutral
26
27
28
10
11
13
29
14
Recommendation Sheet
32
Disclaimer
33
Capital Market
KSE: Neutral to Negative in Short - term
16
17
Contact
Contact List
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34
Budget FY16
A Cautious Walk towards Growth
Despite the government missing some tax targets, we feel intentions to keep overall expenditure growth under control should augur well in
FY16. Much of the fiscal consolidation the government is hoping will come by way of reducing current expenditures rather than the
optimistic increase in the tax revenues. Based on this, the government projects fiscal burden to come down to 4.3% of the GDP. That, in our
view, remains a far-fetched proposition as FY16 budget lacks clear and key policy reform measures, as originally envisaged, to broaden tax
net and encourage investments via incentives from companies to boost capital investments. Similarly, we do not expect massive cuts that
seem to be on the govt agenda, which could lead to cost overruns, ultimately causing the government to miss its fiscal deficit target.
Increase in tax-to-GDP:
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Budget FY16
Budget at a Glance
Revised fiscal deficit of FY15 stands at 5.0% of GDP, slightly higher than initially budgeted number at 4.9%, mainly due to tax revenues
falling short by 8%, or PKR 219bn. For FY16, the government is targeting a 4.3% fiscal deficit, or PKR 1.3trn. This is expected to be achieved
only through a combination of removal of tax exemptions, marked reduction in subsidies, and an upbeat approach to bringing more
economic resources under the tax net, in our view.
4.3%
FY16 B
13.3%
14.1%
5.0%
FY15 A
14.2%
14.4%
5.9%
FY14 A
15.2%
14.2%
7.6%
FY13 A
14.4%
12.4%
0.0%
5.0%
10.0%
15.0%
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Budget FY16
Key Statistics
PKRbn
Net Receipts
Total Outlay
- Tax Revenue
- Non-tax Revenue
Total Expenditure
Current Expenditure
- Debt Servicing
- Defence
- Subsidies
Development + net Lending
Federal PSDP
FY13 A
1,616
2,837
2,125
712
3,299
2,720
1,029
570
367
579
388
FY14 A
2,184
3,597
2,514
1,083
3,871
2,935
1,187
630
323
936
425
FY15 R
2,378
3,952
2,910
1,042
3,902
3,185
1,270
720
243
717
542
FY16 B
2,463
4,313
3,418
895
4,089
3,166
1,280
781
138
923
700
FY14 A
35%
27%
18%
52%
17%
8%
15%
10%
-12%
62%
9%
FY15 R
9%
10%
16%
-4%
1%
9%
7%
14%
-25%
-23%
28%
FY16 B
4%
9%
17%
-14%
5%
-1%
1%
8%
-43%
29%
29%
Fiscal Balance
Provincial Surplus
Consolidated Fiscal Balance
GDP
%age of GDP
Total Outlay
- Tax Revenue
- Non-tax Revenue
Current Expenditure
Development + net Lending
Consolidated Fiscal Balance
(1,683)
(62)
(1,745)
22,909
(1,687)
183
(1,504)
25,402
(1,524)
142
(1,383)
27,384
(1,625)
297
(1,328)
30,672
0%
-394%
-14%
-10%
-23%
-8%
7%
110%
-4%
12.4%
9.3%
3.1%
11.9%
2.5%
-7.6%
14.2%
9.9%
4.3%
11.6%
3.7%
-5.9%
14.4%
10.6%
3.8%
11.6%
2.6%
-5.0%
14.1%
11.1%
2.9%
10.3%
3.0%
-4.3%
7.6%
5.9%
6.0%
5.0%
4.3%
4.0%
2.0%
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FY13 A
FY14 A
FY15 A
FY16 B
Budget FY16
Gradual Move towards Direct Taxation
Revenues
The government has set a tax collection target of PKR 3.4trn for FY16, which is higher by 17.5% YoY when compared with the revised FY15
collection PKR 2.9trn. Basis of higher growth in revenues are expected to be a) 22% YoY increase in direct taxes to PKR 1.3trn, b) 17%
increase in indirect taxes to PKR 1.8trn. Non-tax revenue is targeted at PKR 0.89tn, down by 14% YoY.
The government has set a tax collection target of PKR 3.13trn for
FY16, which is 17.5% YoY higher when compared with the revised
FY14 collection target of PKR 2.9trn.
80.0%
50.0%
Tax Revenue
25%
30%
26%
21%
75%
70%
74%
79%
FY13 A
FY14 A
FY15 A
FY16 B
70.0%
60.0%
40.0%
30.0%
20.0%
10.0%
0.0%
Source: MoF, AHL Research
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Budget FY16
Tightening the Belt
Expenditures
FY15s revised total expenditure was down by 1% to PKR 3.9trn. For FY16, the government is targeting total expenditure to PKR 4.1trn or
13.3% of GDP, compared to 14.6% average during FY13-15 period.
(PKR trn)
Subsidies
Defense
Debt Servicing
2.5
2.0
1.5
0.3
0.4
0.6
0.2
0.1
0.7
0.8
0.6
1.0
0.5
1.0
1.2
1.3
1.3
FY13 A
FY14 A
FY15 A
FY16 B
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Budget FY16
More Growth-prone Expenditure the better
Public Sector Development Program
Given the better FY15 fiscal stance as a starting point, we believe government stands a good chance of enhancing Public Sector
Development Projects (PSDP) expenditure.
2.8%
2.8%
2.8%
2.7%
2.6%
2.5%
2.5%
FY15B
525
64
112
650
FY15R
542
49
109
646
FY16B
700
112
160
814
1,175
4.0%
1,188
4.3%
1,514
4.9%
%YoY
29%
128%
46%
26%
27%
2.4%
2.3%
2.2%
2.2%
2.1%
2.0%
FY13 A
FY14 A
FY15 A
FY16 B
Budget FY16
Shifting Financing from Domestic to Foreign
Deficit Financing
Financing burden is finally shifting to foreign inflows, gradually. This is expected to ease-up domestic borrowing requirement, where we
may see a systematic decline in government security issues. Moreover, lowering domestic financing would also bode well in terms of private
sector credit off-take. We think this financing mix would provide just about the right balance to support long-term objective of sustained
economic growth.
Lowering domestic burden should support long-term objective of
sustained economic growth, going forward
Privatisation
100%
90%
Domestic
External
1%
4%
75%
70%
22%
24%
26%
FY13 A
FY14 A
FY15 A
14%
80%
70%
60%
50%
64%
40%
30%
20%
10%
0%
Source: MoF, AHL Research
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Budget FY16
Key Revenue Measures
Revenue receipt: Gross revenue receipts of the federal government for FY15 are estimated at PKR 4,313bn compared to
revised figures of PKR 3,952bn for FY14, showing an increase of 9.1%.
Provinces share: Share of provinces is PKR 1,849bn, compared to revised estimate of PKR 1,575bn for FY14, an increase of
17.4%.
Net resources of federal govt: Net resources of federal government are PKR 2,463bn compared to revised estimate of PKR
2,378bn for last year.
Removing SROs: Here also, the government has focused on reducing concessions relating to customs, sales tax and income tax
of PKR 120bn compared to last years PKR 105 bn.
New Taxes: Imposition of new taxes including super tax in case earnings exceed PKR 500mn , and increase in cost of doing
business for non-filers
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Budget FY16
Key Relief Measures
Agriculture Sector
Tax Holiday for Agricultural Delivery Chain: Income Tax Holiday for 3 years is being introduced for new industrial
undertakings engaged in setting up and operating
WHT from 6% to 0%
Interest Free Loans for Solar Tube Wells: Interest free loans of up to Rs.1 Million for setting up new or replacing solar tube
wells.
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Budget FY16
Key Relief Measures
Construction Sector
Housing Credit: Mark-up on housing loans obtained by individuals from banks and other institutional lenders for construction or
buying a house to be allowed as a deduction against income up to 50% of taxable income or Rs. 1 million.
Suspension of Minimum Tax on Builders: The minimum tax on builders levied for the business of construction and sale of
residential and other buildings is being suspended for a period of three years.
Real Estate Investment Trust (REIT) Development Schemes: Capital Gains of any person who sells a property to a REIT
development scheme formed for the development of housing sector will be exempt from Income Tax up to 30.6.2018. If a
development REIT Scheme for the development of housing sector is set up by 30.6.2018, for the first three years the rate of
Income tax chargeable on dividend income of such REIT shall be reduced by 50%.
Bricks and crushed stone: Supply of bricks and crushed stone will be exempted from Sales Tax for three years up to
30.6.2018.
Reduction in customs duty on import of Construction Machinery: Customs Duty is reduced to 10% on import of construction
machinery registered with Pakistan Engineering Council and SECP.
LNG terminal: Exemption of profit and gains derived by LNG Terminal Operators and Terminal Owners for a period of 5 years
beginning from the day when commercial operations are commenced. They are also eligible for exemption from minimum tax
under section 113.
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Budget FY16
Key Income Tax Measures
Reduction in Tax Rate for Companies: Corporate tax rates further reduced to 32% for Tax Year 2016.
Exemption to Electricity Transmission Projects for a period of 10 years provided that the project is set up by June, 2018.
Tax Credit for new investment in shares: To encourage saving and investment in new companies quoted on stock exchange
the limit for individual investors is being enhanced to 1.5 million.
Tax Credit for Enlisting: To encourage enlisting of companies on stock exchange, credit is being be enhanced to 20% from 15%.
Reduction in Withholding Tax On Token Tax and Transfer of Vehicles: To encourage investment from car assemblers due to
higher demand.
Relief to Small Taxpayers: Salaried taxpayers earning PKR 400,000 to PKR 500,000 are reduced to 2% instead of 5%. NonSalaried individual taxpayers and Association of Persons earning taxable income from PKR 400,000 to PKR 500,000 reduced to
7% tax compared to 10 %.
Exemption from Customs Duty and Sales Tax: It is proposed that Customs Duty, sales tax and withholding tax in respect of
various items used in Aviation Sector may be reduced to zero subject to certain conditions
Customs Tariff Reforms: Maximum general tariff rate of 25% reduced to 20%. Substitution of 1% duty slab with 2%
customs duty.
Capital Gains Tax increased : <1 year from 12.5% to 15%; 1-2 years, from 10% to 12.5%; 2-4 years, from 0% to 7.5%
Taxation of Dividend: It is proposed that the rate be increased to 12.5%. Consequently, in case of non-filers the rate of tax is
proposed to be increased from 15% to 17.5% of which 5% shall continue to be adjustable. For Mutual Funds, the existing rate of
10% shall continue.
Small Company: Income Tax Ordinance provides a reduced rate of 25% for taxing the income of a small company as an
incentive for going public.
Payments in respect of advertisement expenses to print/electronic media: Exemption from WHT on payments to electronic
and print media in advertising services may be withdrawn.
Reduced rate for cash withdrawals by exchange companies: Cash withdrawals by exchange companies are subject to
withholding tax rate of 0.15% instead of being exempt.
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Budget FY16
Key Sales Tax and Federal Excise Duty
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Budget FY16
KSE: Neutral-to-Negative in Short-term
Between
24M-48M
7.5%
Filers
Old (FY2015)
10.0%
New (FY2016)
15.0%
Source: AHL Research, Federal Budget FY16
Non-Filers
12.5%
17.5%
Dividend Tax
20%
June
10%
-10%
-20%
16
CY15
CY14
CY13
CY12
CY11
CY10
CY09
0%
CY08
Conversely, mandatory dividend payout for companies having reserves at/over 100% of
paid-up (post cash payout in a year, otherwise taxed at incremental 10%), is positive,
though needs amendments on definition of reserves (whether total earned in a year net
of payout). Assuming reserves as profit for the year, average payout is expected to be
71% from 34% or paying additional tax will result in ~4% EPS impact (AHL Universe, see
next slide for detail). However, if reserve is declared as accumulated, companies with
huge accumulated reserves may announce one-time bonus issues to convert it into paidup (better pay 5% one-off than 10% every year for cash to be retained), which is negative.
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CY07
Further, 2.5% increase in dividend tax rate to 12.5% (though 7.5% dividend tax on power
projects/IPPs stays intact, as per certain explanations) with no relief on bonus tax (5%)
will also keep dividend/bonus-loving investors relatively at bay compared to earlier.
CY06
Increase in Capital Gains Tax (CGT) to 12.5%/15% (below 1yr/between 1-2yrs), with a new
slab introduced (7.5% on gains between 2-4yrs), is negative and may trigger
selling/booking gains by companies/individuals having gains on books older than 2 years
before the measure comes into effect from Jul-15. In addition, increase in corporate tax
rate reduction of 1% as planned while addition of 3% for 1-yr to support on-going
operation against insurgency ,called Zarb-e-Azb and FATA/IDPs, resulting in 35% for nonbanking, and 39% for banking companies - will put pressure on corporate profits (5.2% YoY
average decline in profit growth for CY15/FY16), which may impact market in short term.
CY05
CY04
Federal Budget FY16 turns out to be Neutral-to-Negative for the capital market. Major
changes in the taxes on investors 2.5% increase in Capital Gains Tax (CGT) with additional
slab of 7.5% (on 2-4yr gains), 3% additional corporate tax rate in general (for 1yr), and 4% on
banking companies in particular (for 1yr), alongside increase in dividend tax by 2.5% (to
12.5%) with no relief on bonus tax (5%) - are all expected to keep KSE on the lower side in the
short-term, though long term attraction of Pak equities remains intact.
Budget FY16
KSE: Companies with Potential Higher Dividend
AHL Universe*
INDU
PSO
ENGRO
LUCK
PSMC
KOHC
DGKC
Other KSE100 Cos.*
41.9%
23.9%
24.6%
27.6%
27.4%
25.4%
30.8%
Additional DPS
over Paid-up
59.9
38.4
21.2
19.4
17.0
8.1
1.7
Revised
Payout
92.0%
84.9%
76.7%
76.2%
74.0%
59.8%
41.4%
Payout
Base Case
Additional
DPS FY16 (PKR)
Revised
Payout
53.0%
44.8%
14.0%
40.1%
0.0%
9.1%
24.2%
14.8%
28.8%
49.6%
46.0%
0.0%
31.6%
27.9%
44.7%
23.3%
0.0%
0.0%
0.0%
114.8
85.4
82.7
27.9
32.4
28.4
21.8
25.0
15.2
7.8
4.0
19.4
10.0
10.6
0.4
2.0
3.9
2.4
2.2
96.4%
94.5%
91.1%
84.8%
77.3%
77.2%
77.0%
76.6%
72.6%
72.3%
70.9%
67.2%
66.7%
66.0%
46.9%
36.8%
29.3%
20.3%
18.6%
FY16 EPS
FY16 Payout
119.4
62.9
40.7
39.9
36.5
23.6
16.2
Last Full-year EPS^
RMPL
264.3
BATA
171.9
IDYM
107.2
SRVI
62.4
PSEL
41.9
MARI
41.6
ATBA
41.3
MUREB
40.5
SHEZ
34.7
COLG
34.3
THALL
16.3
ATRL
28.9
PKGS
28.5
ABOT
27.9
ICI
17.9
POML
15.0
BNWM
13.4
SEARL
11.9
NRL
11.7
Source: Company Financials, AHL Research
Or Additional
Tax at 10%
6.0
3.8
2.1
1.9
1.7
0.8
0.2
Additional 10%
Tax Impact on Yearly EPS
5.0%
6.1%
5.2%
4.9%
4.7%
3.4%
1.1%
Revised DY
Or Additional
Tax at 10%
Additional 10%
Tax Impact on EPS
2.9%
5.1%
9.7%
7.8%
6.9%
6.7%
4.7%
3.0%
2.8%
1.5%
4.2%
9.2%
3.4%
3.0%
2.0%
3.6%
9.3%
0.9%
0.9%
11.5
8.5
8.3
2.8
3.2
2.8
2.2
2.5
1.5
0.8
0.4
1.9
1.0
1.1
0.0
0.2
0.4
0.2
0.2
4.3%
5.0%
7.7%
4.5%
7.7%
6.8%
5.3%
6.2%
4.4%
2.3%
2.5%
6.7%
3.5%
3.8%
0.2%
1.4%
2.9%
2.0%
1.9%
Revised DY
8.6%
13.9%
10.6%
6.3%
6.2%
7.5%
5.0%
*Companies with Reserves at/over 100% of Paid-up Capital, to be additionally taxed at 10% if leftover reserves/earnings from payout clocks in at/over 100% of the Paid-up Capital
(excluding Banks, Modarabas and Public sector companies where government stake is at/over 50%). ^Assuming other KSE100 companies keeping at least same growth in profits.
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Budget FY16
Companies with Reserves over 100% of Paid-up
AHL Universe
PNSC
Pak National Shipping Corp
DGKC
D. G. Khan Cement Co.
NML
Nishat Mills Ltd.
ENGRO
Engro Corporation Ltd.
PPL
Pak Petroleum Ltd.
NPL
Nishat Power Ltd.
Other KSE100 Companies
PKGS
Packages Ltd.
IDYM
Indus Dyeing Manufacturing Co. Ltd.
ATRL
Attock Refinery Ltd.
SHEZ
Shezan International Ltd.
ATBA
Atlas Battery Ltd.
ARPL
Archroma Pakistan Ltd.
BNWM
Bannu Woollen Mills Ltd.
MTL
Millat Tractors Ltd.
IGIIL
IGI Insurance Ltd.
ATLH
Atlas Honda Ltd.
EFUG
EFU General Insurance
PSEL
Pakistan Services Ltd.
GHGL
Ghani Glass Mills Ltd.
AHCL
Arif Habib Corporation Ltd.
CHCC
Cherat Cement Company Ltd.
OLPL
Orix Leasing Pakistan Ltd.
SNGP
Sui Northern Gas Ltd.
GATM
Gul Ahmed Textile Mills Ltd.
GLAXO
Glaxosmithkline (Pak) Ltd.
JGICL
Jubilee General Insurance Co. Ltd.
SHEL
Shell Pakistan Ltd.
KTML
Kohinoor Textile Mills Ltd.
NESTLE
Nestle Pakistan Ltd.
SRVI
Service Ind.
Source: Company Financials, AHL Research
44,766
5,022
19,493
1,099
1,478
2,803
706
3,264
8,471
6,879
9,513
1,869
5,947
21,213
3,813
2,162
14,458
3,580
6,184
2,750
1,711
3,714
516
124
Reserves* to Paid-up
Ratio
16.7
9.7
9.5
3.3
2.7
1.9
51.8
27.8
22.9
15.1
8.5
8.2
7.4
7.4
6.9
6.7
5.9
5.7
4.8
4.7
3.6
2.6
2.5
2.0
1.9
1.8
1.6
1.5
1.1
1.0
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Budget FY16
Key Measures & Expected Impacts
Key Measures
Potential
Impact
Negative
New slab for investment between 2-4 years levied with CGT
at 7.5%.
Negative
Negative
Negative
Negative
Neutral
Tax rate on shares sold within a year and between 1-2 years
increased by 2.5% to 15% and 12.5%, respectively.
Neutral
Positive
Positive
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Budget FY16
Impacts on Key Sectors, Recommended Stance
Sector
Budgetary Impact
Stance
Top Picks
Cement
Positive
Overweight
Power / IPPs
Positive
Overweight
HUBC, KAPCO
Automobiles
Neutral to Positive
Market-weight
PSMC
Textile
Neutral to Positive
Market-weight
NML
Transportation
Neutral to Positive
Market-weight
PNSC
Fertilizer
Neutral
Market-weight
Telecom
Neutral
Market-weight
PTC
E&Ps
Neutral
Market-weight
POL, PPL
Oil Marketing
Natural
Market-weight
PSO
Banks
Neutral to Negative
Market-weight
UBL, MCB
Other Sectors
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Cement Positive
Budgetary Measures
Impact
Comment
Positive
Neutral
Positive
Negative
P/B
0.8
2.0
2.6
DY (%)
3.7
2.3
8.0
RoE (%)
10.2
17.9
29.1
Target Price
167.5
596.9
41.8
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Current Price
135.4
483.5
34.5
Upside (%)
23.7
23.5
21.0
22
Impact
P/B
2.6
3.3
Positive
Negative
Positive
DY (%)
11.5
10.2
Comment
The govt is targeting PKR 118bn for power subsidies (PKR 98bn
for WAPDA and PKR 20bn for KEL) during FY16, massively down
47% as compared to FY15 revised target of PKR 221bn (PKR
185bn for WAPDA and PKR 36bn for KEL). By lowering the
subsidy target, the govt will pass the actual cost to end
consumers, therefore be able to manage circular debt more
effectively, thereby helping improve IPPs liquidity positions
and positive impacts on companies payouts.
Power sector has exemptions from corporate/income tax.
However, only KAPCO is subject to corporate tax and would
have net negative 3% impact on the bottomline for FY16.
Rate of withholding tax on dividend from power projects (IPPs)
remain unchanged at 7.5%, which bodes well for the high
dividend-yielding stocks i.e. KAPCO, NCPl and NPL.
RoE (%)
33.8
35.7
Target Price
89.5
94.1
Current Price
87.0
97.0
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Upside (%)
3.0
(3.0)
23
Impact
Comment
Positive
Negative
Positive
Neutral
P/B
1.6
DY (%)
2.3
RoE (%)
19.1
Target Price
425.2
Current Price
435.1
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Upside (%)
(2.3)
24
Impact
Comment
Positive
Positive
Positive
Neutral
P/B
0.6
DY (%)
4.4
RoE (%)
7.5
Target Price
145.0
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Current Price
113.9
Upside (%)
27.3
25
Fertilizer Neutral
Budgetary Measures
Impact
Neutral
Neutral
Comment
Due to higher demand and lower production, the demand is
being met through urea imports. We estimate that govt will
be able to import 600k tons of urea from aforementioned
allocation (local prices at 15% discount to intl).
Despite stay on the bill by the court during FY15, the fertilizer
companies have been accruing (FFC, EFERT) while paying
partially (FFBL) GIDC on feed and fuel stocks. The recent
reinstatement of the bill by the Parliament and the Senate has
already been incorporated by the market.
Negative
Positive
Positive
P/E
10.0
8.1
8.9
P/B
2.1
3.0
3.4
DY (%)
2.7
6.9
10.1
RoE (%)
21.2
41.7
36.8
Target Price
411.1
110.5
61.6
Current Price
295.4
87.4
49.4
Upside (%)
39.2
26.5
24.7
26
Impact
Comment
Positive
Neutral
Neutral
P/E
8.2
6.1
8.1
P/B
1.5
1.0
2.5
DY (%)
7.3
3.9
11.5
RoE (%)
19.6
17.7
31.9
Target Price
230.4
461.2
450.8
Current Price
170.4
382.7
389.7
Upside (%)
35.2
20.5
15.7
27
Impact
Comment
Negative
Negative
Imposition should impact all the banks with this additional tax
for the year 2015 (we expect banks to charge the liability
retrospectively for full-year 2015). This should trim down
earnings by a good 4-5%, but only for tax year 2015!
Cumulative earnings impact of both the tax measures for 1yr
i.e. 35% on all income with additional 4% super tax, ranges 812%, with NBP (12%), ABL (11.5%) being the most affected,
followed FABL (9.1%), BAFL (9%), HBL (8.7%), MCB (8.3%), with
UBL (8%) being the least affected.
Neutral
P/B
2.2
1.5
DY (%)
4.8
6.5
RoE (%)
16.6
15.8
Target Price
301.5
179.0
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Current Price
272.8
169.7
Upside (%)
10.5
5.5
28
Impact
Comment
While the 10% tax is a negative for EFOODS, due to the low
proportion of processed dairy products in its sales mix, the
impact is not significant as such. On the other hand, reduction
of duty on skimmed milk will help boost margins for the
companys main brand i.e. Olpers. Similar impacts may take
place for NESTLE and UPFL.
Positive for
Foods
Positive for
Sales tax at 5% on second-hand and worn clothing value-added
and footwear has been imposed.
Textiles and
Footwear
Negative for
Media
Companies
These taxes should be a potential negative for the technologybased companies, such as TRG (internet based consultant and
call center), NETSOL (internet based consultant), SYS and AVN.
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Impact
Comment
Positive for
Marine
Transport
Positive for
Increase in FED on aerated drinks from 9% to 12%. Food &
Beverages
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Impact
Comment
Neutral for
Chemicals
Neutral to
Positive for
Electricity
Transmission
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31
Recommendation Summary
S.No
Company
Symbol
Price*
E&P
PPL
1
Pakistan Petroleum Ltd.
170.4
OGDC
2
Oil and Gas Dev Co.
187.5
POL
3
Pakistan Oilfields Ltd.
389.7
Banks
FABL
4
Fay sal Bank Ltd.
16.3
ABL
5
Allied Bank Ltd.
102.5
UBL
6
United Bank Ltd.
169.7
MCB
7
MCB Bank Ltd.
272.8
MEBL
8
Meezan Bank
45.5
BAFL
9
Bank Alfalah
26.5
HBL
10
Habib Bank Ltd^^
209.1
NBP
11
National Bank of Pakistan
55.0
Fertilizer
ENGRO
12
Engro Corporation
295.4
FFBL
13
Fauji Fert. Bin Qasim
49.4
EFERT
14
Engro Fertilizer
87.4
FFC
15
Fauji Fertilizer Co.
142.7
FATIMA
16
Fatima Fertilizer Company *
39.0
AHCL
17
Arif Habib Corporation Ltd.*
39.6
Cem ent
FECTC
18
Fecto Cement
69.5
ACPL
19
Attock Cement Ltd.
190.9
LUCK
20
Lucky Cement Ltd.
483.5
KOHC
21
Kohat Cement Company
187.5
DGKC
22
D.G. Khan Cement Co.
135.4
FCCL
23
Fauji Cement Company
34.5
MLCF
24
Maple Leaf Cement Factory
77.1
POWER
25
Pow er Cement*
8.1
Oil Marketing
PSO
26
Pakistan State Oil
382.7
APL
27
Attock Petroleum Ltd.
539.9
Autos
INDU
28
Indus Motor Company
1279.3
PSMC
29
Pak Suzuki Motor Co.
435.1
Power
KAPCO
30
Kot Addu Pow er Co.
87.0
HUBC
31
Hub Pow er Company
97.0
NPL
32
Nishat Pow er Limited
55.1
NCPL
33
Nishat Chunian Pow er Ltd.
61.2
Textiles
NCL
34
Nishat (Chunian) Ltd.
35.1
NML
35
Nishat Mills Ltd.
113.9
Chem ical
EPCL
36
Engro Poly mer & Chem.
9.3
LOTCHEM
37
Lotte Chemical Pak Ltd.
6.5
Fixed Line Telecom
PTC
20.6
36
Pak Telecom Co. Ltd**
Industrial Transporation
PNSC
108.0
37
Pak. National Shipping Corp
Cable & Electrical Goods
PAEL
72.8
38
Pak Elektron Ltd
Health Care Equipm ent & Services
39
SHFA
270.4
EPS
DPS
P/E
Targe t
Price
Dec-15
Upside/
Downside
Stance
230.4
229.3
450.8
35%
22%
16%
Buy
Buy
Buy
1,972
4,301
237
26.08
28.81
54.48
20.50
22.91
38.64
20.80
23.00
47.86
11.00
10.50
60.10
12.50
12.50
35.00
12.50
12.50
45.00
6.53
6.51
7.15
20.5
118.3
179.0
301.5
51.5
26.7
200.9
50.1
26%
15%
5%
11%
13%
1%
-4%
-9%
Buy
Buy
Hold
Buy
Buy
Hold
Hold
Hold
1,043
1,145
1,224
1,113
1,003
1,587
1,467
2,128
2.37
13.11
17.91
21.85
3.55
21.69
7.06
3.74
12.85
17.02
20.09
3.81
19.13
4.91
3.87
14.82
19.08
22.33
3.34
21.82
6.13
6.50
11.50
14.00
2.00
12.00
5.50
7.00
11.00
13.00
2.30
11.00
4.00
0.50
9.00
12.00
14.00
2.00
12.00
5.00
411.1
61.6
110.5
147.8
NC
NC
39%
25%
26%
4%
na
na
Buy
Buy
Buy
Hold
NC
NC
524
934
1,318
1,272
2,100
454
14.89
4.30
6.23
14.28
4.41
5.08
29.55
5.53
10.76
13.76
na
na
40.71
6.32
12.75
15.43
-
6.00
4.00
3.00
13.65
2.75
2.50
8.00
5.00
6.00
13.00
na
na
96.8
282.0
596.9
220.1
167.5
41.8
69.8
NC
39%
48%
23%
17%
24%
21%
-9%
na
Buy
Buy
Buy
Buy
Buy
Buy
Hold
NC
50
115
323
155
438
1,331
528
366
11.86
17.59
35.08
20.42
13.62
1.97
5.36
(0.20)
12.85
22.22
38.11
20.74
15.17
3.06
6.84
-
13.99
22.91
39.91
23.64
16.22
3.69
7.22
-
2.50
13.00
9.00
2.00
3.50
1.50
-
461.2
579.4
21%
7%
Buy
Hold
272
83
80.31
52.16
37.77
38.22
62.86
54.89
1165.0
425.2
-9%
-2%
Hold
Hold
79
82
49.28
27.22
120.83
48.09
89.5
94.1
47.5
49.7
3%
-3%
-14%
-19%
Buy
Hold
Hold
Hold
880
1,157
354
367
8.78
5.66
8.24
7.90
145.0
27%
Buy
352
8.9
37%
Buy
1,514
Shares
(mn)
Div. Yield
P/B
ROE
Indices
2014
2015
2016
2014
2015
2016
2014
2015
2014
2015
2014
2015
2014
2015
8.31
8.18
10.09
6.5%
5.6%
15.4%
7.3%
6.7%
9.0%
1.85
2.04
2.62
1.66
1.80
2.70
31.0%
35.0%
37.8%
21.1%
23.3%
26.4%
6.87
7.82
9.47
12.48
7.45
9.64
7.79
4.35
7.98
9.98
13.58
6.94
10.93
11.21
6.3%
6.8%
5.1%
7.6%
5.7%
10.0%
6.8%
6.5%
4.8%
8.7%
5.3%
7.3%
0.65
1.45
1.66
2.33
0.94
1.82
0.66
0.60
1.34
1.51
2.18
0.88
1.68
0.64
10.2%
20.4%
19.4%
20.2%
0.0%
14.7%
20.6%
9.0%
14.3%
17.5%
15.8%
16.6%
0.0%
13.1%
16.0%
5.8%
KSE100
KSE100 & BKTI
KSE100, KSE30, BKTI & MSCI
KSE100, KSE30, BKTI & MSCI
KSE100
KSE100, KSE30 & BKTI
KSE100, KSE30, BKTI
KSE100, KSE30, BKTI & MSCI
10.00
5.00
7.00
15.00
na
na
19.83
11.48
14.04
9.99
8.85
7.79
9.99
8.92
8.12
10.37
na
na
2.0%
8.1%
3.4%
9.6%
7.0%
6.3%
2.7%
10.1%
6.9%
9.1%
na
na
2.15
3.17
3.91
7.16
na
na
2.08
3.40
2.98
6.81
na
na
12.2%
28.4%
29.7%
72.0%
26.6%
9.1%
21.2%
36.8%
41.7%
67.4%
na
na
3.00
12.00
10.00
4.00
4.00
2.50
2.00
na
4.00
14.00
11.00
6.00
5.00
2.75
3.00
na
5.86
10.86
13.78
9.18
9.95
17.48
14.38
nm
5.41
8.59
12.69
9.04
8.93
11.26
11.28
na
3.6%
6.8%
1.9%
1.1%
2.6%
4.3%
-
4.3%
6.3%
2.1%
2.1%
3.0%
7.2%
2.6%
na
1.47
2.59
3.14
3.37
0.96
2.91
4.17
2.08
1.21
2.27
2.33
2.49
0.89
2.82
3.05
na
27.8%
24.7%
25.0%
43.1%
10.9%
16.6%
34.3%
-5.1%
24.5%
28.2%
21.1%
31.7%
10.4%
25.4%
31.2%
0.0%
KSEALL
KSE100
KSE100, KSE30, KMI30 & MSCI
KSE100, KSE30 & KMI30
KSE100, KSE30 & KMI30
KSE100, KSE30 & KMI30
KSE100
KSEALL
8.00
45.00
14.00
32.50
15.00
50.00
4.77
10.35
10.13
14.13
2.1%
8.3%
3.7%
6.0%
1.32
3.25
1.16
3.04
31.0%
31.1%
12.2%
22.2%
119.36
36.55
29.50
4.00
55.00
10.00
50.00
10.00
25.96
15.99
10.59
9.05
2.3%
0.9%
4.3%
2.3%
5.05
1.86
4.11
1.61
20.6%
12.1%
42.8%
19.1%
10.33
7.50
8.49
8.18
11.07
10.19
8.77
8.20
6.50
6.50
4.00
6.50
8.50
7.26
6.00
7.40
10.00
9.85
7.00
7.80
9.91
17.13
6.69
7.75
8.42
12.94
6.49
7.48
7.5%
6.7%
7.3%
10.6%
9.8%
7.5%
10.9%
12.1%
2.77
3.62
1.89
3.19
2.69
3.55
1.66
2.93
29.1%
20.6%
29.8%
40.5%
32.4%
27.7%
27.2%
40.9%
15.68
10.83
15.02
4.00
7.27
10.52
3.5%
3.5%
0.61
0.55
8.5%
5.2%
(0.73)
(0.45)
(0.17)
nm
nm
1.07
1.09
-10.6%
-7.4%
KSEALL
KSEALL
Under Review
4.00
5.00
Under Review
-
Under Review
KSE100
KSE100
KSE100 & KSE30
KSE100, KSE30, KMI30 & MSCI
KSE100
KSE100
170.0
57%
Buy
132
16.27
13.89
17.20
1.50
1.50
1.50
6.64
7.78
1.4%
1.4%
0.63
0.57
10.0%
7.7%
78.5
8%
Hold
398
5.63
6.33
7.86
1.00
1.50
12.92
11.49
1.4%
2.63
2.20
25.5%
20.8%
KSE100, KSE30
KSEALL
299.9
11%
Buy
51
9.18
11.10
17.91
3.00
4.00
5.00
29.46
24.37
1.1%
1.5%
7.23
5.94
26.7%
26.8%
KSE100, KSEALL
* Group Company , **Earning Consolidated Basis, ^based on new number of shares, Closing price as of Jun 05, 2015.
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Disclaimer
Analyst certification: The analysts for this report certify that all of the views expressed in this report accurately reflect their personal
views about the subject companies and their securities, and no part of the analysts compensation was, is or will be, directly or indirectly
related to specific recommendations or views expressed in this report.
Disclosures and disclaimer: This document has been prepared by investment analysts at Arif Habib Limited (AHL). AHL investment
analysts occasionally provide research input to the companys Corporate Finance and Advisory Department.
This document does not constitute an offer or solicitation for the purchase or sale of any security. This publication is intended only for
distribution to current and potential clients of the Company who are assumed to be reasonably sophisticated investors that understand
the risks involved in investing in equity securities.
The information contained herein is based upon publicly available data and sources believed to be reliable. While every care was taken to
ensure accuracy and objectivity, AHL does not represent that it is accurate or complete and it should not be relied on as such. In
particular, the report takes no account of the investment objectives, financial situation and particular needs of investors. The
information given in this document is as of the date of this report and there can be no assurance that future results or events will be
consistent with this information. This information is subject to change without any prior notice. AHL reserves the right to make
modifications and alterations to this statement as may be required from time to time. However, AHL is under no obligation to update or
keep the information current. AHL is committed to providing independent and transparent recommendation to its client and would be
happy to provide any information in response to specific client queries. Past performance is not necessarily a guide to future
performance. This document is provided for assistance only and is not intended to be and must not alone be taken as the basis for any
investment decision. The user assumes the entire risk of any use made of this information. Each recipient of this document should make
such investigation as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred
to in this document (including the merits and risks involved), and should consult his or her own advisors to determine the merits and risks
of such investment. AHL or any of its affiliates shall not be in any way responsible for any loss or damage that may be arise to any person
from any inadvertent error in the information contained in this report. We and our affiliates, officers, directors, and employees may: (a)
from time to time, have long or short positions in, and buy or sell the securities thereof, company (is) mentioned herein or (b) be engaged
in any other transaction involving such securities and earn brokerage or other compensation or act as advisor to such company (is) or have
other potential conflict of interest with respect to any recommendation and related information and opinions. The disclosures of interest
statements incorporated in this document are provided solely to enhance the transparency and should not be treated as endorsement of
the views expressed in the report. AHL generally prohibits it analysis, persons reporting to analysts and their family members from
maintaining a financial interest in the securities that the analyst covers.
2015 Arif Habib Limited: Corporate Member of the Karachi, Lahore and Islamabad Stock Exchanges and Pakistan Mercantile Exchange
Limited. No part of this publication may be copied, reproduced, stored or disseminated in any form or by any means without the prior
written consent of Arif Habib Limited.
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Contact
shahid.habib@arifhabibltd.com
+92 -21-3240-1930
Research Team
Khurram Schehzad
Shahbaz Ashraf, CFA
Saad Khan
Tahir Abbas
Ahmed Lakhani
Rao Aamir Ali
Ovais Shakir
k.shehzad@arifhabibltd.com
shahbaz.ashraf@arifhabibltd.com
saad.khan@arifhabibltd.com
tahir.abbas@arifhabibltd.com
ahmed.lakhani@arifhabibltd.com
amir.rao@arifhabibltd.com
ovais.shakir@arifhabibltd.com
+92-21-3246-0742
+92-21-3246-2589
+92-21-3246-1106
+92-21-3246-2589
+92-21-3246-1106
+92-21-3246-0742
+92-21-3246-1106
yousuf.ahmed@arifhabibltd.com
farhan.karim@arifhabibltd.com
farhanmansoori@arifhabibltd.com
afshan.aamir@arifhabibltd.com
atif.raza@arifhabibltd.com
azhar.javaid@arifhabibltd.com
furqan.aslam@arifhabibltd.com
usman.ta@arifhabibltd.com
+92-21-3242-7050
+92-21-3244-6255
+92-21-3242-9644
+92-21-3244-6256
+92-21-3246-2596
+92-21-3246-8312
+92-21-3240-1932
+92-21-3240-1932
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