SAZEW Posts Strong Financial Growth in 9MFY24, Expands Electric Vehicle Lineup

Karachi, SAZEW today conducted its analyst briefing to discuss the company’s financial performance for the first nine months of fiscal year 2024 and its future strategic directions. The company reported a significant increase in earnings, with a profit of PkR 4.4 billion, which is an 8.5-fold increase year-over-year. Gross margins also saw a substantial rise to 25.8% from 11.6% in the corresponding period last year.

According to AKD Securities Limited, the briefing revealed several key developments at SAZEW. The company has benefited from lower duties granted under the greenfield status of AIEDP 2021-26, which is expected to sustain unless there are changes in the duty structure. In recent quarters, SAZEW expanded its product lineup, receiving a three-wheeler electric vehicle (EV) license from the Punjab government and launching the CKD version of ‘Haval Jolian HEV’ and CBU variants of ‘Ora 3’ and ‘Tank 500 HEV’.

Management highlighted the strong market reception to the ‘Jolian HEV’, with positive pre-booking trends and the first batch expected to roll out in June 2024. Despite new introductions, sales of their ‘Haval H6’ have not been affected due to price differentiation, allowing SAZEW to capture market share in the below PkR 8 million segment.

On the manufacturing front, SAZEW’s four-wheel vehicles are currently not localized, but plans are in place to increase localization in line with current auto policies. Conversely, the EV three-wheeler segment is approximately 80% localized, with only the battery component imported.

Looking ahead, the company’s management has decided not to enter the lower segment vehicle market, citing its price sensitivity. They also noted that sales for the ‘BIAC’ remain niche, with plans for a facelift and relaunch in the future. The company maintains an exclusive manufacturing agreement with ‘GWM’ in Pakistan.

In terms of electric vehicles, the ‘Ora 3’ model and three-wheeler EVs are expected to see slow local sales due to their higher price points. However, SAZEW is actively exploring new export markets for its three-wheelers, currently focusing on Afghanistan and Japan.