IGI Securities Limited – Day Break

Karachi, March 19, 2019 (PPI-OT): Power Generation and Distribution – Feb-19: Generation down by 4%YoY on account of lower demand

As per latest data available on NEPRA’s website, overall power generation during the month of Feb-19 dropped by 4%YoY to 6,687Gwh. Power production through Hydel/Coal clocked in at 1,523/1,168Gwh up by +12%/+6%YoY, while generation through RFO/Gas-LNG decreased by 81%/10%YoY to 112/2,724Gwh during Feb-19,

Power generation through RFO in Feb-19 dropped by 81%YoY (down by 469Gwh) to 112Gwh, owing to no generation from GENCO I-III, AES Lalpir, Saba Power and Resham while lower generation from KAPCO Block II, Hub Plant and Narowal cumulatively dragged generation down by 173Gwh,

Gas/LNG based power generation plummeted by 10%YoY (289Gwh) to 2,724Gwh in Feb-19 on the back of a) lower generation by KAPCO Block I, II and III cumulatively down by 374Gwh and, b) lower generation from GENCO I, II and III (cumulatively down by 640Gwh) despite higher generation from QATPL, Haveli Bahadurshah and Baloki Power plants cumulatively adding 1,011Gwh,

We maintain HUBC as our top pick with our Dec-19 target price of PKR 120.23/share offering +43% upside from its last close. We are currently revisiting our investment case for HUBC. The Company is trading at FY19 P/E of 7.9x and offers dividend yield of 7.1%.

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