IN FOCUS Maple Leaf Cement Company Limited (MLCF): On an upward trajectory! A turnaround story in the making, we expect Maple Leaf Cement Factory Limited (MLCF) to significantly outperform peers as earnings traction in FY15 confluences with dissipating risks. FY15 earnings are expected to clock in at PKR3.4bn (EPS: PKR6.5), a growth of 22%YoY on the back of i) improving gross margins (GMs) as coal prices register consistent declines, ii) lower financial charges amid continued deleveraging and iii) improved operating margins as the company focuses on curtailing its transportation costs. The strong financial performance as well as continued early debt retirement should also put to rest concerns over the financial strength of the company where we expect MLCF’s Debt / Asset to stand at 31% (D/E: 60%) in FY15 from 40% (D/E: 89%) in Mar’14. With a target price of PKR50/sh, the scrip offers an upside of 79% from current levels – BUY! Report by: Sajjad Hussain BMA Capital Management Ltd. (9221) 111 262 111 This report produced by BMA Capital Management Ltd. contains information from sources believed reliable; we do not guarantee that the matter is accurate or complete. Our Research Analysts compile this memorandum based on opinions and judgments, which may vary and be revised at any time without notice. This report is for information only and is not an offer to buy or sell, or solicitation of any offer to buy or sell the securities mentioned. It is published for the use of our clients may not be reproduced, distributed or published by any person for any purpose whatsoever. Action will be taken for unauthorized reproduction, distribution or publication. The views expressed in this document are those of the BMA Research Department and do not necessarily reflect those of BMA or its directors.
Posted on: Thu, 09 Oct 2014 07:06:04 +0000
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