FLASHNEWS:

AKD Securities Limited – AKD Daily (January 04, 2022)

Karachi, January 04, 2022 (PPI-OT): Pakistan OMCs: APL continues to gain market share

OMC sales clocked in at 1.5mn tons for Dec’21, down 6%YoY while on MoM basis, sales witnessed a decline of 14%. The YoY decrease was led by FO sales as power production on FO has declined while MS posted an increase of 4%YoY and HSD remained flat for the month on YoY basis.

Overall, OMC volumes have increased by 14%YoY for 1HFY22 where FO took the lead with an increase of 17%YoY while MS/HSD posted increase of 10/17%YoY.

APL turned out to be the star performer for the month with an increase in total volumes of 14%YoY against a decline of 6%YoY of the industry where the difference was also visible in retail fuels segment with APL’s retail fuels’ volume increasing by 21%YoY against 0.5%YoY of the industry, taking APL’s market share to 9.0% for Dec’21 against 7.5/9.0% for Dec’20/Nov’21

APL (TP: PkR438/sh) is our top pick from the sector given i) company’s low leverage protecting it against any increase in interest rates, ii) high payout ratio of the company providing it attributes of a defensive play, and iii) improved storage network of APL expected to aid in enhancing market share.