Karachi, November 11, 2021 (PPI-OT):VIS Credit Rating Company Limited (VIS) has maintained the entity ratings of Cyan Limited (CL) at ‘A/A-1’ (Single A/A-One). Outlook on the assigned rating has been revised from ‘Negative’ to ‘Stable’. Previous rating action was announced on January 1, 2021.

CL is principally engaged in investment in public equities market, with an objective to pursue active returns. During the period under review (2020 and 1H2021), the company’s profitability metrics were swayed by upwards, as portfolio returns notably exceeded benchmark returns. As a result, CL’s efficiency ratio and RoAA/RoAE has depicted notable improvement.

The assigned rating is constrained by the lack of revenue stream diversification as earning profile of the company is largely dependent on dividend income and capital gains. Cognizant of the significant exposure to market risk and lack of diversification in revenue stream, the management plans to diversify its topline by providing advisory services to SME’s to get listed on newly launched GEM board of PSX. Materialization of new revenue streams will be tracked over time.

Gearing and leverage indicators stayed intact. Liquidity profile of the company remains strong, given that investment in listed equities is the mainstay of operations. Given strong profitability, and adequate retention, the company’s equity base has grown by 56% since Dec’18.

Assigned ratings continue to derive strength from strong sponsor profile (majority owned by Dawood Hercules – DH Group) and adequate corporate governance infrastructure along with the presence of qualified and seasoned professionals in the management team.

For more information, contact:
Director Compliance and Rating Analytics,
VIS Credit Rating Company Limited
VIS House, 128/C, 25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi, Pakistan
Tel: +92-21-35311861-72
Fax: +92-21-35311873
Email: bilal@jcrvis.com.pk
Website: https://www.vis.com.pk/