JS Securities Limited – JS Research Beep

Karachi, January 05, 2018 (PPI-OT): Total cement dispatches grew by 5% YoY in Dec-2017

As per APCMA, cement dispatches for the month of Dec-2017 depicted 5% YoY growth to clock in at 3.7mn tons – higher than suggested by provisional numbers. In spite of winter season, domestic sales of the industry registered a healthy growth of 7% YoY to 3.4mn tons (North/South: +7%/+5% YoY). However, exports continued their declining trend (down by 11% YoY to 328K tons), resulting in improvement in local to exports ratio by 1ppts YoY to 91:9 vs. 90:10 in the same period last year.

Cumulative total sales for 1HFY18 clocked in at 22.2mn tons, up by 12% YoY. Local sales continued its uptrend with a healthy growth of 17% YoY to settle at 19.8mn tons, while exports declined by 17% YoY to 2.4mn tons.

Going forward, we expect domestic sales to remain buoyant due to election year while decline in exports is expected to ease with addition of capacities in the southern region. We continue to like LUCK (TP: Rs826), KOHC (TP: Rs244) and CHCC (TP: Rs137) as our top pick.