PTCL
1
WE Detailed Report
May 2013
Pakistan Telecommunication Company Ltd
PTCL - Play on Pakistan's Telecom potential
KEY DATA
KATS Code
PTC
Reuters Code
PTCA.KA
Current Price (Rs)
20.97
Year High, Low (Rs)
24.59, 15.39
Market Cap (Rs' bn)
107
Market Cap (US$ mn)
1,069
Shares Outstanding (mn)
5,100
Free Float (%)
15.5%
Source: KSE, Reuters & WE Research
We initiate the coverage of Pakistan Telecommunication Company Ltd.
(PTCL) with a Dec'13 Target Price of Rs 28.10/share, offers an upside of
+34% -BUY! Our bullish view is mainly on back of implied ICH implementation by the players as a result company's EPS to show massive upside in CY13 by +265% YoY resulting in better cash flows and dividend payout, 2) Broadband segment expansion still going on, 3) Property issue expected to resolve and 5) finally UFONE to add value in longer run post 3G license announcement.
We expect 1) topline average growth of 9% (2013-2015), 2) gross margins to average at 37% (2013-2015), 3) average market share of ICH to remain
50% (2013-2015) and 4) incoming international traffic to average at
650mn min/month. The key risks to our estimates are 1) ICH is terminated, 2) Upsurge in discount rate, 3) More than expected decline in incoming minutes and 4) No dividend payout in CY13.
PTC Financial Snapshot
CY12A
CY13E
Net Sales (Rs mn)
67,838
77,495
Profit after Taxation (Rs mn)
3,641
13,302
EPS (Rs)
0.71
2.61
Book Value (Rs/share)
20.55
23.14
DPS (Rs)
1.50
P/E (x)
29.37
8.04
P/BV (x)
1.02
0.91
P/EBITDA (x)
4.89
3.19
ROE (%)
3.47
11.27
ROA (%)
2.21
7.47
Source: Company Reports & WE Research
WE RESEARCH IS AVAILABLE ON THOMSON REUTERS, BLOOMBERG, S & P CAPITAL IQ
CY14F
82,487
14,482
2.84
24.48
1.75
7.39
0.86
2.97
11.60
7.70
CY15F
87,812
15,762
3.09
25.82
2.00
6.79
0.81
2.77
11.97
8.06
2
WE Detailed Report
May 2013
Valuation: BUY with a Target Price of Rs 28.1
We have applied discounted
WE Detailed Report
May 2013
Pakistan Telecommunication Company Ltd
PTCL - Play on Pakistan's Telecom potential
KEY DATA
KATS Code
PTC
Reuters Code
PTCA.KA
Current Price (Rs)
20.97
Year High, Low (Rs)
24.59, 15.39
Market Cap (Rs' bn)
107
Market Cap (US$ mn)
1,069
Shares Outstanding (mn)
5,100
Free Float (%)
15.5%
Source: KSE, Reuters & WE Research
We initiate the coverage of Pakistan Telecommunication Company Ltd.
(PTCL) with a Dec'13 Target Price of Rs 28.10/share, offers an upside of
+34% -BUY! Our bullish view is mainly on back of implied ICH implementation by the players as a result company's EPS to show massive upside in CY13 by +265% YoY resulting in better cash flows and dividend payout, 2) Broadband segment expansion still going on, 3) Property issue expected to resolve and 5) finally UFONE to add value in longer run post 3G license announcement.
We expect 1) topline average growth of 9% (2013-2015), 2) gross margins to average at 37% (2013-2015), 3) average market share of ICH to remain
50% (2013-2015) and 4) incoming international traffic to average at
650mn min/month. The key risks to our estimates are 1) ICH is terminated, 2) Upsurge in discount rate, 3) More than expected decline in incoming minutes and 4) No dividend payout in CY13.
PTC Financial Snapshot
CY12A
CY13E
Net Sales (Rs mn)
67,838
77,495
Profit after Taxation (Rs mn)
3,641
13,302
EPS (Rs)
0.71
2.61
Book Value (Rs/share)
20.55
23.14
DPS (Rs)
1.50
P/E (x)
29.37
8.04
P/BV (x)
1.02
0.91
P/EBITDA (x)
4.89
3.19
ROE (%)
3.47
11.27
ROA (%)
2.21
7.47
Source: Company Reports & WE Research
WE RESEARCH IS AVAILABLE ON THOMSON REUTERS, BLOOMBERG, S & P CAPITAL IQ
CY14F
82,487
14,482
2.84
24.48
1.75
7.39
0.86
2.97
11.60
7.70
CY15F
87,812
15,762
3.09
25.82
2.00
6.79
0.81
2.77
11.97
8.06
2
WE Detailed Report
May 2013
Valuation: BUY with a Target Price of Rs 28.1
We have applied discounted