BF Biosciences (BFBIO): Downgraded to ‘Hold’ – By Sherman Research

Nov 18 2024


Sherman Securities


  • BF Biosciences launched its IPO on September 25, 2024, with a floor price of Rs55/share. Thanks to an overwhelming response from investors, the IPO was oversubscribed by 3.4x, closing at a strike price of Rs77/share. We initiated coverage with a ‘Buy' recommendation on its IPO (please refer our report titled ‘BF Biosciences IPO - New Diabetes Business, a game changer: Subscribe’)
  • Since its listing on October 21, BFBIO has delivered an impressive 60% return, significantly outperforming the pharmaceutical sector’s 28% gain in the same period. Thus, due to sharp rally, we are downgrading our stance to ‘Hold’. BFBIO is trading at FY25 PE of 18x
  • BF Biosciences has been a leader in life-saving drug production from its advanced facility in Lahore, focusing on treatments for cancer, hepatitis C, and other critical conditions.
BF Biosciences (BFBIO): 2QFY25 Earning Preview - By Sherman Research

Feb 25 2025


Sherman Securities


  • BF Biosciences (BFBIO) is set to announce its 2QFY25 results on February 27. The company is expected to report net profit of Rs203mn (EPS Rs2.3) compared to EPS of Rs1.31 during previous quarter.
  • We expect BFBIO to post earnings growth of 77%QoQ. The rise in profitability is likely due to improved margins, as the company shifted its sales focus to highermargin products instead of low-margin toll-manufactured products.
  • Additionally, other income from interest on unutilized IPO proceeds further contributed to earnings growth. Finance costs are also expected to decline by 29%QoQ, supported by the repayment of long-term loans and a reduction in the policy rate.
BF Biosciences (BFBIO): Analyst Briefing Takeaways – By Sherman Research

Nov 28 2024


Sherman Securities


  • BF Biosciences (BFBIO) conducted analyst briefing session today, wherein the management discussed financial results and future outlook of the company.
  • The company reported a 44% growth in net revenue for 1QFY25, driven primarily by a 39% increase in volume, with the remainder attributed to price hikes. ICON was the largest contributor to revenue, followed by RIFAXA, ERTITREGEN, and VORIF.
  • Updating on Line 2 , the management conveyed that production dedicated to pre-filled syringes, has commenced. Depreciation for this new line will be recognized starting next quarter. Meanwhile, the combination and lyophilization lines are in the validation phase.
Pakistan Pharmaceuticals: FEROZ & BFBIO: Analyst briefing takeaways – By Insight Research

Nov 27 2024


Insight Securities


  • Ferozsons Laboratories Limited & BF Biosciences held its analyst briefing to comment on their financial result and to shed light on future outlook. Highlights of the session are given below:
  • Production from BFBIO’s Line 2 which is dedicated to prefilled syringes has commenced. From the next quarter, depreciation would be realized for this line. The combo line and lyophilization line are currently in the validation phase.
  • The company emphasized that semaglutide is a highly profitable product, boasting a margin of 40-50%. To highlight, Semaglutide is not a perfect substitute for type 1 diabetes but can effectively be used for type 2 diabetes.
BF Biosciences (BFBIO): Downgraded to ‘Hold’ – By Sherman Research

Nov 18 2024


Sherman Securities


  • BF Biosciences launched its IPO on September 25, 2024, with a floor price of Rs55/share. Thanks to an overwhelming response from investors, the IPO was oversubscribed by 3.4x, closing at a strike price of Rs77/share. We initiated coverage with a ‘Buy' recommendation on its IPO (please refer our report titled ‘BF Biosciences IPO - New Diabetes Business, a game changer: Subscribe’)
  • Since its listing on October 21, BFBIO has delivered an impressive 60% return, significantly outperforming the pharmaceutical sector’s 28% gain in the same period. Thus, due to sharp rally, we are downgrading our stance to ‘Hold’. BFBIO is trading at FY25 PE of 18x
  • BF Biosciences has been a leader in life-saving drug production from its advanced facility in Lahore, focusing on treatments for cancer, hepatitis C, and other critical conditions.
United Bank (UBL): 1QCY25 EPS clocked in at PKR28.8 – Above expectation - By Insight Research

Apr 16 2025


Insight Securities


  • UBL has announced its 1QCY25 result, wherein it has posted consolidated PAT of PKR36.1bn (EPS: PKR28.8) vs. PAT of PKR16.1bn (EPS: PKR12.9) in SPLY. The result is above our expectation due to higher than estimated NII and reversal in provisioning expense.
  • Net interest income clocked in at PKR84.2bn, up by 200%/24% YoY/QoQ. The increase is attributable to favorable pricing of investment book aided by healthy volumetric growth and higher share of zero cost deposits.
  • Non markup income declined by 21%/38% YoY/QoQ despite a healthy increase of 26%/90% YoY/QoQ in fee income. The decline is primarily driven by elevated gain on securities in preceding quarters.
United Bank (UBL): Recorded highest ever quarterly earnings in 1Q2025 - By Topline Research

Apr 16 2025


Topline Securities


  • United Bank (UBL) announced its 1Q2025 result today, where the bank recorded highest ever quarterly earnings of Rs36bn (EPS of Rs28.9), up 126% YoY and 39% QoQ.
  • UBL's 1Q2025 earnings exceeded industry expectations, which ranged between Rs12.8–22.9 per share, and were also the highest ever recorded for any bank in a single quarter.
  • The significant jump in in earnings is due to increase in Net Interest Income (NII).
United Bank Limited (UBL): 1QCY25 EPS clocks-in at PKR 29.3; PAT up 1xYoY/39%QoQ - By Taurus Research

Apr 16 2025


Taurus Securities


  • 1QCY25 EPS: PKR 29.3. 1QCY25 PAT up 1xYoY. UBL also announced an interim cash dividend of PKR 11/sh. The Bank also plans to sub-divide the face value of its shares in the ratio of 2:1 subject to approval by shareholders.
  • Net Interest Income (NII): Up 2xYoY/24%QoQ, in line with expectations amid significant drop in interest expenses due to the lower cost of funds on the back of build-up in current accounts and the revised MDR regime. Deposits are up ~29% YTD.
  • Non-Markup Income (NMI): Down 20%YoY/38%QoQ, owing to ~77% drop in capital gains compared to 4QCY24
Pakistan Economy: Feb’25 LSMI down 5.9%MoM/down 3.5%YoY - By Taurus Research

Apr 16 2025


Taurus Securities


  • Large Scale Manufacturing Index (LSMI) down 5.9%MoM in Feb’25, due to decline from key sectors i.e. Furniture (-56%), Machinery & Equipment (-34%) and Chemical Products (-19%). Whereas, top contributors were Other Transport Equipment (38%), Automobiles (31%), Coke & Petroleum Products (23%) and Tobacco (18%), respectively. 8MFY25 LSMI was down 1.9%YoY.
  • Textile production declined by ~0.33%YoY in Feb’25 attributable to decline in production of jute goods, woolen & worsted cloth and woolen blankets by 36.65%YoY, 3.66%YoY and 94.76%YoY, respectively— mainly due to the lower domestic and international demand driven by a seasonal shift that reduced the overall requirement of these products. Whereas, on a monthly basis it significantly declined by ~3.24%MoM, mainly due to the decline in production of jute goods, terry & towels, woolen & carpet yarn and woolen blankets by 19.56%MoM, 7.34%MoM, 4.42%MoM and 94.21%MoM, respectively
  • Automobile production down ~5%MoM in Feb’25. Wherein, Jeeps & cars production declined by 10%MoM. Similarly, LCVs production down ~13%MoM, respectively. On a YoY basis, production of LCVs, Jeeps & Cars, Trucks and Buses went up by ~23%, 26%, 1.8x and 48% on the back of controlled manufacturing costs, stable tariffs, eased import restrictions on CKD units and recovering demand due to improving macros.
Lotte Chemical Pakistan Limited (LOTCHEM): Earnings Hold Steady as PTA Margins Remain Underwhelming - By IIS Research

Apr 16 2025


Ismail Iqbal Securities


  • We expect LOTCHEM to report a PAT of PKR 779 million (EPS: PKR 0.51) for 1QCY25, compared to LPS 0.01 in last quarter. This improvement comes as operations normalize following a one-month plant turnaround last quarter. PTA sales volumes are also anticipated to recover to typical levels. However, PTAPX margins have averaged USD 100/ton this quarter, lower than the USD 122/ton in the past six years and the long term average of USD 110/ton, largely due to global dynamics and subdued international demand.
  • Additionally, this quarter is affected by the recent gas price hike. Where, the gas price for captive power plants has increased to Rs 3,500 per MMBtu, effective February 1, 2025. While this increase poses some pressure, it's worth noting that LOTCHEM’s cost structure and margins are largely driven by international PTA-PX spreads. Notably, in CY24, only around 7% of COGS was from oil, gas, and electricity expenses. Furthermore, the company is in the process of being acquired, as AsiaPak Investments Limited and Montage Oil DMCC entered into a share purchase agreement to acquire a 75.01% stake in LOTCHEM.
Bank Al-Falah Limited (BAFL): 1QCY25 EPS to clock-in at PKR 3.3; PAT down 47%YoY/up 13%QoQ - By Taurus Research

Apr 16 2025


Taurus Securities


  • Board Meeting: Thursday, April 17, 2025
  • 1QCY25 EPS: PKR 3.3. 1QCY25 PAT down 47%YoY. BAFL is also expected to announce a cash dividend of PKR 2.0/sh.
  • Net Interest Income (NII): We anticipate net interest income to post a drop of 9%YoY/11%QoQ mainly on account of falling yields on investments and re-pricing of the loan book; partially offset by a lower cost of funds due to the rate cut in Jan’25 and the impact of revised MDR regime coming into effect Jan’25 onwards
Commercial Bank: Banking Sector’s Dividends Payouts to Persist Despite Earnings Attrition in 1QCY25 - By Pearl Research

Apr 16 2025


Pearl Securities


  • We preview 1QCY25 earnings result for commercial banks within our coverage. We expect earnings of the Pearl banking universe to witness erosion of 3.6% QoQ due to NIM compression coupled with tapering off of growth in non-core income.
  • Notably, we expect the lagged impact of asset repricing and declining asset yields amid aggressive monetary easing measures to serve as a headwind for interest income, which nonetheless should partly be counteracted by volumetric balance sheet growth.
  • Additionally, we anticipate the offsetting decline in cost of deposit to remain relatively muted compared to the previous quarter despite strategic shift into low-cost deposits by the sector, thereby resulting in core income witnessing a contraction of ~6% QoQ, according to our estimates
Technical Outlook: KSE-100; Consolidation likely above key averages - By JS Research

Apr 16 2025


JS Global Capital


  • The KSE-100 index extended the gain to close at 116,776, up 385 points DoD. Volumes stood at 479mn shares compared to 485mn shares traded in the previous session. The index is expected to revisit yesterday’s high of 117,362 where a break above targeting 118,718 level. However, any downside will find support at the 30-DMA which is currently at 115,631. The RSI and the Stochastic Oscillator have moved up, supporting a positive view. We recommend investors to ‘Buy on dips’, with risk defined below the 30-DMA. The support and resistance levels are at 116,493 and 117,210 levels, respectively.
Engro Powergen Qadirpur Limited (EPQL): 1QCY25 EPS arrive at PKR 1.19, up 1.5xQoQ - By Taurus Research

Apr 15 2025


Taurus Securities


  • 1QCY25 EPS: PKR 1.19; DPS: PKR 7.5.
  • Revenue increased 9%QoQ to PKR 3.1Bn, attributed to improved dispatches amid seasonal demand recovery. However, YoY growth remained flat due to the impact of revised PPA terms, which converted the plant's structure to a 'take-and-pay' regime, limiting guaranteed capacity payments.
  • Finance income stood at PKR 26Mn versus PKR 238Mn in 1QCY24 (SPLY), reflecting the absence of late payment surcharge (LPS) which previously contributed significantly. The decline was anticipated after the company received PKR 8.04Bn in overdue receivables under the revised PPA settlements.
Commercial Banks: 1QCY25 Result Preview: Payouts to remain intact - By AKD Research

Apr 15 2025


AKD Securities


  • AKD Banking Universe is set to announce its 1QCY25E results, where we expect profitability to decline by 12%QoQ, as contraction in NIMs and a drop in nonmarkup income are expected to outweigh the impact of lower operating expenses and reduced taxation.
  • We anticipate our banking universe to maintain dividends in the first quarter, supported by resilient capitalization amid monetary easing, recovery in macro economic variables and removal of mandated ADR based taxation during the previous quarter.
  • Profitability to take a hit from declining yields: AKD Banking Universe is set to announce its 1QCY25E results, where we expect profitability to decline by 12%QoQ to PkR75.1bn, as contraction in NIMs and a drop in non-markup income are expected to outweigh the impact of lower operating expenses and reduced taxation.
Pak Elektron Limited (PAEL): Tariff Hike on China to Unlock US Transformer Market - By Sherman Research

Apr 11 2025


Sherman Securities


  • While accessing major implications of US tariffs on Pakistani manufacturers, we found out that PAEL seems to be one of the major beneficiaries of US-China Tariff war. Despite 29% Tariff imposition on Pakistani goods to US (currently paused for 90 days), higher tariff on Chinese goods (145%) may create additional demand for PAEL’s transformers as the company has already started exporting transformers to US from March 2025.
  • Our back of the envelope working suggest that for every 10% utilization of idle capacity, transformer business to generate additional annual earnings of Rs0.6/share (11% of CY25 earnings), provided we do not see dumping of goods by China.
  • PAEL is currently trading at CY25 PE of 7.8x versus last 3-year average PE of 9.6x. We have not yet incorporated the impact of US trade war with China on PAEL’s earnings.
Pak Elektron Limited (PAEL): Tariff Hike on China to Unlock US Transformer Market - By Sherman Research

Apr 11 2025


Sherman Securities


  • While accessing major implications of US tariffs on Pakistani manufacturers, we found out that PAEL seems to be one of the major beneficiaries of US-China Tariff war. Despite 29% Tariff imposition on Pakistani goods to US (currently paused for 90 days), higher tariff on Chinese goods (145%) may create additional demand for PAEL’s transformers as the company has already started exporting transformers to US from March 2025.
  • Our back of the envelope working suggest that for every 10% utilization of idle capacity, transformer business to generate additional annual earnings of Rs0.6/share (11% of CY25 earnings), provided we do not see dumping of goods by China.
  • PAEL is currently trading at CY25 PE of 7.8x versus last 3-year average PE of 9.6x. We have not yet incorporated the impact of US trade war with China on PAEL’s earnings.
Sazgar Engineering Works Limited (SAZEW): 3QFY25 EPS to Clock in at Rs90.7 - By Sherman Research

Apr 10 2025


Sherman Securities


  • We present 3QFY25 earnings estimate for Sazgar Engineering Works Limited (SAZEW) wherein company is expected to post net earnings of Rs5.4bn (EPS Rs90.7) as compared to net earnings of Rs3bn (EPS of Rs50.2), up 81%YoY. Furthermore, SAZEW is expected to announce a cash dividend of Rs20/share (up 2.5xYoY) in 3QFY25.
  • The growth in profitability is primarily driven by higher sales of Haval HEV SUVs coupled with higher sustained gross margins expected at 29.5% (supported by tax exemptions on HEV CKD imports).
  • On cumulative basis, net earnings are expected to reach Rs12.2bn (EPS Rs200) compared to net earnings of Rs4.4bn (EPS 73.6) up by 2.7xYoY during 9MFY25
Mughal Iron & Steel Industries Ltd. (MUGHAL): Conference Call Takeaways - By Sherman Research

Apr 8 2025


Sherman Securities


  • Mughal Iron & Steel Industries Ltd. (MUGHAL) conducted conference call today. The major area of focus remained the implications of reciprocal trade tariffs announced by US on international steel prices and the update on company’s upcoming hybrid captive power plant.
  • During1HFY25, company’s earnings declined by 83%YoY on the back decrease in gross margin and elevated finance cost.
  • Segment wise earnings show that non- ferrous business dragged overall earnings downward while ferrous business improved during 1HFY25 compared to same period last year.
Auto: Car Sales to decline by 9%MoM in March’25 - By Sherman Research

Apr 8 2025


Sherman Securities


  • The sales of leading car assemblers registered with PAMA are expected to decline, reaching 10,049 units in Mar’25 (down 9%MoM). However, on a quarterly basis, sales are projected to rise to 36,035 units in 3QFY25 (up 31% YoY).
  • We believe the monthly decline in sales is primarily due to the Ramzan effect and the entry of newly launched non-PAMA models in Mar’25 (BYD & JETOUR).
  • Interestingly Indus Motors (INDU) reported 3,131 units (up 20%MoM). This growth in sales is mainly due to higher sale of Yaris, Hilux models and Fortuner.
Fertilizer: Urea Sales Almost 5 Years Low - By Sherman Research

Apr 4 2025


Sherman Securities


  • According to provisional data, urea sales during Mar’25 is expected to clock in at 308k tons, down 54%YoY. Similarly, DAP sales to decline by 61%YoY. The YoY decline is mainly due to weak farm economics amid lower support prices and higher input costs.
  • Similarly, on MoM basis, urea sales is likely to decline by 11%MoM, mainly due to seasonal impact.
  • Urea sales of Fauji Group to clock in at 187k tons versus sales of 252k tons during the same period last year, down 26%YoY. Similarly, EFERT is likely to witness sharp decline in urea sales of 60%YoY to 59k tons as compared to 148k tons during the last year.
Economy: March CPI Clocked in at 0.7%YoY - By Sherman Research

Apr 3 2025


Sherman Securities


  • CPI for March’25 is recorded at 0.7%YoY compared to 1.5%YoY during the previous month thanks to decrease in food & housing index and base effect.
  • The food index reported disinflation (i.e. down 5.1%YoY) in March’25 which is highest decline since recent history. This decrease is primarily due to decline in prices of wheat flour (down 35%), wheat (down 35%), onions (down 71%), fresh vegetables (down 32%) and tomatoes (down 54%).
  • On a MoM basis, inflation increased by 0.9%MoM primarily driven by food index (up 1.9%MoM) and slight decline in housing index (down 0.1%MoM) mainly due to decline in electricity charges (down 1.3%MoM). The uptick in inflation was largely attributed to the Ramzan effect.
Ghandhara Automobiles Ltd (GAL): Upward Revision in Earnings, 3Q Preliminary Estimates - By Sherman Research

Mar 27 2025


Sherman Securities


  • Following our January 14, 2025, report, "Breaking Monopolies: GAL Introduces JAC T9 Hunter“, we are revising our earnings forecast upward by 34-62% for FY25-26 and raising our target price to Rs705 per share, driven by the T9 Hunter’s strong market response.
  • We maintain a “Buy” stance, as the stock is currently trading at an attractive FY26 P/E of 5.1x.
  • Our earlier assessment of the T9 Hunter (in pickup market) as a monopoly breaker has proven accurate as evidenced by its overwhelming market response. T9 Hunter’s appealing aesthetics and competitive pricing has driven exceptional demand, leading the company to pause bookings and increase price by 7.7% after just two weeks of launch. The strong demand appears sustainable, with current delivery timelines extending to Sep’25 coupled with lower-cost parts compared to competitors.
Economy: Pakistan’s Trade Deficit Held Steady in Feb’25 - By Sherman Research

Mar 19 2025


Sherman Securities


  • Detailed breakdown on trade numbers released by the Pakistan Bureau of Statistics (PBS) show imports declined to US$4.8bn (down 9%MoM), during Feb’25 compared to US$5.3bn in Jan’25. Historically, imports tend to remain lower in February. This decline was primarily driven by lower imports in the petroleum, machinery and agriculture sectors on weighted average basis, while food imports remained flat.
  • During 8MFY25, import bill was recorded at US$37.9bn (up, 8%YoY) mainly due to higher imports of machinery, and textile groups, while petroleum imports remained flat. Moreover, credit to private sectors has increased to Rs13trn (up 18%YoY and 17% since in June’24), wherein manufacturing loans are up 10%YoY and textile 14%YoY.
  • Similarly, exports also declined to US$2.5bn (down 16%MoM) during Feb’24. However, during 8MFY25, exports clocked in at US$22bn (up 8%YoY), largely supported by growth in exports in the food and textile sectors.
Food & Personal Care: Sector Earnings Grew by Massive 54%YoY - By Sherman Research

Mar 13 2025


Sherman Securities


  • With falling oil prices, sharp reduction in interest rates and improvement in disposable income led by falling inflation, one sector which attracts investors’ attention is Food sector. Pakistan’s listed Food & Personal Care sector is mainly skewed towards edible oils, snacks & related, dairy products and bakery & processed as these four sector contribute 66% of the sector revenue.
  • Interestingly, Pakistan’s listed food & personal care sector has lower representation at PSX (9% of the total market capitalization) while most of the stocks are illiquid since food sector contribute only 4% of the free float market capitalization. However, with reduction in logistic cost led by declining fuel prices and falling interest rates, we may see larger participation in food sector as earning growth momentum to continue.
  • Based on our analysis of 23 listed companies, Pakistan’s combined listed Food & Personal Care industry posted robust profit of Rs13.8bn during Oct-Dec 2024 quarter compared to same quarter last year, up by massive 54%YoY. This growth is mainly led Bakery and processed sector (including MFL,BNL,NATF,GIL), Beverages & Fruit sector (SHEZ, MUREB, QUICE, MFFL), dairy sector (PREMA, FFL, FECLP, NESTLE) and personal care sector (TREET, ZIL, SCL, GLPL, COLG) as these sub sectors grew by massive 300%, 148%, 75% and 39%, respectively (see table no.2).
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