tockz_123:

Cements | case-to-case outlook of middle tier players

Interest sensitive industry:
Cement industry is one of the most leveraged manufacturing industries of Pakistan
with average total debt to equity ratio of above 75%. This creates the cement industry
most interest rate sensitive industry. A slightly change in DR impact a lot on the
cement manufacturers' earnings and profitability. We expect that there will be negative
impact on the earnings due to expected increase in DR on the impending monetary
policy. We have taken total debt in consideration since many companies are resorting
to financial mismatch where their long term fixed is being adjusted through short term
financing. Only CHCC stands out as a more efficient player. Though, its debt is
expected to increase with expansion plan. Hence cement players does not present a
very attractive case on the face of financial leveraging.
Cement Dispatches: increases in cumulative terms in 5MFY14 - decreases in monthly
terms
Cement dispatches increases till 5MFY14 to 13.2mn tons as against 13.1mn tons
reported in the same period last year. As per the data released, cement dispatches
decreased by 6% MoM in Nov'13 to 2.6mn tons. The domestic demand dropped by
3% and export volumetric sales dropped by 16% on MoM.

Triggers:
Some of the impending triggers that could come include probable decrease in coal
prices. We are hearing news about decrease in coal prices. On local front, we see
government functionaries in planning division are active along with Punjab
government which is releasing funds for small schemes in local towns and districts.
We see this as good omen for cement consumption. The government in centre is
mindful about energy needs via hydel projects and hence funding is stated to be
arranged from multilateral donors and US government. However, we also see many
risks associated with political situation w.r.t. to abysmal economic indicators since

situation on ground could be adverse for the government due to spiralling inflation.
We see company wise case-to-case scenario where FECTC & CHCC remains on the
limelight owing to small capacities. CHCC presents the case of efficient financial
management.Cements | case-to-case outlook of middle tier players
Interest sensitive industry:
Cement industry is one of the most leveraged manufacturing industries of Pakistan
with average total debt to equity ratio of above 75%. This creates the cement industry
most interest rate sensitive industry. A slightly change in DR impact a lot on the
cement manufacturers' earnings and profitability. We expect that there will be negative
impact on the earnings due to expected increase in DR on the impending monetary
policy. We have taken total debt in consideration since many companies are resorting
to financial mismatch where their long term fixed is being adjusted through short term
financing. Only CHCC stands out as a more efficient player. Though, its debt is
expected to increase with expansion plan. Hence cement players does not present a
very attractive case on the face of financial leveraging.
Cement Dispatches: increases in cumulative terms in 5MFY14 - decreases in monthly
terms
Cement dispatches increases till 5MFY14 to 13.2mn tons as against 13.1mn tons
reported in the same period last year. As per the data released, cement dispatches
decreased by 6% MoM in Nov'13 to 2.6mn tons. The domestic demand dropped by
3% and export volumetric sales dropped by 16% on MoM.

Triggers:
Some of the impending triggers that could come include probable decrease in coal
prices. We are hearing news about decrease in coal prices. On local front, we see
government functionaries in planning division are active along with Punjab
government which is releasing funds for small schemes in local towns and districts.
We see this as good omen for cement consumption. The government in centre is
mindful about energy needs via hydel projects and hence funding is stated to be

arranged from multilateral donors and US government. However, we also see many
risks associated with political situation w.r.t. to abysmal economic indicators since
situation on ground could be adverse for the government due to spiralling inflation.
We see company wise case-to-case scenario where FECTC & CHCC remains on the
limelight owing to small capacities. CHCC presents the case of efficient financial
management.
SCS
SBM:
i think its time to ban scs research notes on this forum ...
uuu
or maybe we can create new thread "Jokes" and post all the funny research there