Model Citizen Essay

404 Words2 Pages
Morning Shout Pakistan Daily Notes Kapco: FY11E EPS/DPS raised as 1H beats estimates Kapco announced above‐expected 2QFY11 results; up 31% YoY to PRs2.06/sh led by lower operating costs and a rising net interest income spread. This has led 1HFY11 earnings up 42% YoY to PRs4.37/sh. With maintenance cost remaining well‐lower than FY10 levels and continued positive net interest income, we increase FY11E EPS estimates by 10% to PRs7.93/sh (+37% YoY) and tweak up dividends by 3% to PRs6.50/sh. Note we target a relatively conservative 82% payout vs. 86% payout in FY10 and Kapco’s historical 5‐year payout of 97%. We await more clarity on government plans to retire intercorporate debt before we turn more bullish on payout. We maintain our PO of PRs52/sh and our Buy rating on Kapco, where we believe the market is not yet pricing in strong FY11E earnings growth and 14.8% D/Y. 1HFY11 benefits to continue in 2H – upgrade EPS/DPS estimates Kapco reported above‐expected 1HFY11 earnings and dividend on Friday, up 42% and 33% YoY respectively to PRs4.37/sh and PRs3.00/sh. With benefits of (1) lower maintenance cost; (2) better plant efficiency on account of gas supply; and (3) net positive interest earned on overdue payments unlikely to reverse in the near term, we increase FY11E earnings by 10% and dividend by 3%. We maintain our PO and Buy rating on Kapco, where we believe the market is not yet pricing in strong 37% FY11E earnings growth and 14.8% D/Y. 21 February 2011 Farrah Marwat KASB Securities Limited +92 21 111 222 000 Current Price PRs43.98 Price Objective PRs52.00 KATS KAPCO Reuters KAPCO.KA Bloomberg KAPCO PA Shares Outstanding 880.25mn Market Cap PRs38,714mn (USD453.53mn) 3m

More about Model Citizen Essay

Open Document