HASCOL offers General Public IPO on 8th and 9th April 2014

HASCOL is going to offer 6.25 million shares to the General Public of Pakistan through IPO. The strike price per share is Rs. 56.50. HASCOL is involved in petroleum business and have more than 200 outlets in Pakistan.

HASCOL

General Public Portion of the issue comprises of 6,250,000 ordinary shares (25% of the issue) at an issue price of pkr 56.50/- per share (inclusive of a premium of pkr 46.50/- per share).The issue price is actually the strike price determined through the book building Bidding period dates: from march 4, 2014 to march 5, 2014 (both days inclusive) from 9:00 a.m. To 5:00 p.m.

According to SCS Trade:

While comparing HPL with industry and other peers, we see that at this price (Rs 56.5/sh) HPL seems little expensive given premium price. Based on diluted EPS HPL yields expected PE of 11.3x which is much higher than the other peers and double of industry average expected PE of 5.8x. Likewise In term of PBV comparison HPL spells out higher PBV of 3.5x much higher than the industry average PBV of 1.5x.

It is our opinion that the company is in good business term and have strong potential to achieve much in the upcoming years. It is fact that price per share is much higher but the confidence of investors have shown that the company will yield much better results than the peers.

Shell Pakistan Limited big earnings turnaround underway – FS Research

Shell Pakistan Limited big earnings turnaround underway – FS Research

By: Muhammad Fawad Khan and Syed Ali Hassan

Foundation Securities (Pvt) Limited

Initiating with an Outperform rating and TP of PKR349.67/sh

We initiate coverage on Shell Pakistan Limited, Pakistan’s 2nd largest oil marketing company having market share of ~11%, with an Outperform rating and TP of PKR349.67. We eye a strong earnings turnaround over the next three years and believe 55% stock price run-up in one-mth is yet to fully reflect the new fundamentals which warrant much higher valuation.

Key reasons for Outperform rating

#1-3x jump in bottom-line

We project 3-year earnings CAGR of 55% under conservative set of assumptions driven by four key drivers. We contend earnings turnaround is largely sustainable. We base our thesis on;

1-Strong uptick in volumes: Shell’s focus on relatively higher margin transportation fuels (HSD, MS, JP) have started to bear fruits as double digit volume growth of 13% in CY13 overshot industry growth of 10%.Medium-term outlook on these products is favorable and should help Shell to undergo 8% volume growth over three years.