AKD Securities Limited - AKD Daily (12-08-2021)

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AKD Securities Limited – AKD Daily (12-08-2021)

August 12, 2021

Karachi, August 12, 2021 (PPI-OT): MEBL, ABL and BAFL: 1HCY21 Result Previews

MEBL to post earnings of PkR4.5/sh in 2QCY21: Meezan Bank Limited (MEBL) is due to announce its 2QCY21 result today where we expect the bank to post NPAT of PkR6.3bn (EPS: PkR4.5), taking the cumulative profitability during 1HCY21 to PkR12.4bn (EPS: PkR8.7). Along with the result, the bank is expected to announce a semi-annual dividend of PkR1.5/sh, taking cumulative payout to PkR3.0/sh. On a sequential basis, earnings are expected to grow by 4%QoQ largely on the back of better non-funded income whereas the funded income is also expected to grow marginally owing to robust book growth. The scrip trades at a forward PBV of 2.3x.

ABL earnings to stand at PkR3.42/sh in 2QCY21: We forecast Allied Bank Limited (ABL) to announce 2QCY21 earnings of PkR3.9bn (EPS: PkR3.4), which will take the cumulative profitability to PkR8.0bn (EPS: PkR7.0) for the period, down 5%YoY. Bank is expected to announce 2QCY20 dividend of PkR2.0/sh, taking the total payout to PkR4.0/sh. Sequentially, earnings are expected to come off by 5%QoQ on the back of i) higher admin expenses, ii) higher effective taxation. However ABL may be able to surprise our estimates on the higher side by booking reversals (we have estimated provisioning expense of PkR200mn). The scrip trades at a forward P/B of 0.56x – BUY

BAFL EPS expected at PkR1.8 during 2QCY21: Bank Al Falah Limited (BAFL) 2QCY21 earnings are estimated at PkR3.2bn (EPS: PKR1.8), this translates into 1HCY21 earnings of PkR6.6bn (EPS: PkR3.7). Along with the result, we expect BAFL to announce cash dividend of PkR1.5/sh. On sequential basis, BAFL’s earnings are expected to recede by 6%QoQ, largely on the back of normalization of capital gains in the outgoing quarter which are expected to come off by 40%QoQ, amid high base effect. However, with BAFL maintaining and ADR of over 63%, no additional tax liability will be levied on the profitability and therefore we expect realized effective tax rate to settle around 39% . We have a BUY call on the scrip with a TP of PKR53/sh.