Karachi, February 15, 2022 (PPI-OT): HUBC, ABL and BOP: Result Previews
HUBC – 1HFY22 earnings expected at PkR11.9/sh: The Hub Power Company Limited (HUBC) is scheduled to announce its 1HFY22 financial result today. We expect the company to post a consolidated profit after tax for 2QFY22 of PkR8.1bn (EPS: PkR6.2) compared to profit after tax of PkR8.2bn (EPS: PkR6.3) during 2QFY21. This will take the cumulative earnings of the company during 1HFY22 to PkR15.5bn (EPS: PkR11.9), down 6%YoY. On sequential basis, earnings are expected to increase by ~9%QoQ during 2QFY22, owing to higher share of profit from China Power Hub Generation due to low base effect amid one-off damage caused by loss of equipment during 1QFY22. During 2QFY22 alone, sales are expected to increase by 62%YoY on the back of higher dispatches and FO prices. Another support to earnings comes from lower finance cost, down by ~12%YoY to PkR1.7bn due to lower ST borrowings during the quarter after the company received 2nd settlement tranche of outstanding receivables. The company also paid out PkR6.5/sh as specie dividend during Jan’22 therefore we expect no further payouts during the quarter. We have a buy call on the scrip with a TP of PkR134/sh.
ABL to post an earnings of PkR4.2/sh in 4QCY21: Allied Bank Limited (ABL) is set to announce its full year CY21 result on Feb 17, 2022 where we expect the bank post NPAT of PkR18.0bn (EPS: PkR15.7), marginally down 2.2%YoY. For 4QCY21, we foresee earnings clocking in at PkR4.17/sh, +10.5%QoQ but down 16.8%YoY where sequential improvement comes from potential normalization in spread on advances which underwent sharp contraction in 3QCY21 (6.40% compared to 7.42% in 2QCY21), and asset scale largely tilted towards investments (particularly in the shorter duration securities) which witnessed widened spreads to policy rate in 4QCY21. However, the improvement in core income (+15.0%QoQ) is partially offset by higher administrative costs associated with year-end spending as seen historically. Together with the result, the bank is expected to maintain its dividend payout of PkR2/sh for the quarter, taking cumulative payout to PkR8/sh for the year.
BOP to record EPS of PkR4.04 in CY21-DPS: PkR1.25/sh: The Bank of Punjab (BOP) is scheduled to hold its BoD for announcement of CY21 results on Feb 18, 2022 where we expect the bank to report NPAT of PkR10.7bn (EPS: PkR4.04) compared to PkR6.9bn (EPS: PkR2.58) in the same period last year. For 4QCY21, we expect the bank to record earnings of PkR0.78/sh, down 33.4%QoQ but +87.1%YoY where sequential decline is attributable to large repricing mismatch coming into play in 4QCY21 due to large holding of saving accounts (50.6% of the deposit mix). As a result, core income is down 12.7%QoQ which is compounded by higher realized administrative costs. Together with the result, the bank is expected to announce a dividend of PkR1.25/sh, possibly preferring to hold capital for IFRS-9 implementation.