Equity Analysis /
Pakistan

Maple Leaf Cement: MAPLE LEAF CEMENT: Q2 18 unit revenue improves slightly, still our top pick

    Vahaj Ahmed
    Vahaj Ahmed

    Head of Industrials Equity Research

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    Tellimer Research
    19 February 2018
    Published byTellimer Research
    Maple Leaf Cement (MLCF PA) reported Q2 18 results (ending 31 December 2017) on Friday. Consolidated EPS for the period stood at PKR2.09 versus PKR2.72 in Q2 18 (24% lower yoy) and PKR2.03 in Q1 18 (3% higher qoq). The result is also accompanied with an interim cash dividend of PKR1.50/share.

    Positive surprise: 1% growth qoq in unit revenue. We estimate aggregate unit revenue was 1% higher qoq in Q2 18 at PKR7,113/tonne – this is contrary to the 3% qoq decline reported by Lucky Cement (LUCK PA) a few weeks ago (see our note). LUCK, however, may not be an apt comparable as it operates in two regions (the north as well as the south) while MLCF only sells in the north. Therefore, we await results from other cement companies (expected this week) to observe the trend in local cement prices before making any changes to our forecasts.


    We have a BUY recommendation on Maple Leaf Cement with a target price of PKR120. This implies an expected total return (ETR) of 77%. Maple Leaf is still our top pick in the Pakistan Cement sector.