§ According to the latest data released by the Pakistan Telecommunication Authority (PTA), local mobile companies manufactured/assembled 2.15mn units, up 44% Month over Month and flat year over year in September 2024.
§ This takes total locally manufactured/assembled sales for 9M2024 to 22.59mn units up 74% YoY. This significant improvement is mainly due to the import restrictions imposed last year.
§ However if we compare it with 9M2022, the growth is still 35% YoY. This growth is mainly driven by economic recovery, an increasing share of locally assembled mobile phones amid higher taxes on imported phones, and a growing population.
§ Within the locally assembled mobile phones of 22.59mn units during 9M2024, 61% (13.86mn units) are smartphones, while the remaining 39% (8.73mn units) are 2G phones.
§ Top 10 locally assembled brands during 9M2024 includes, Infinix (2.79mn units), followed by Itel (2.75mn units), VGO Tel (2.43mn units), Vivo (2.13mn units), Tecno (2.03mn units), Xiaomi (1.89mn units), Realme (1.35mn units), G’Five (1.09mn units), Samsung (0.98mn units), and Nokia (0.96mn units).
§ Tecno and Xiaomi mobiles, manufactured by Airlink, are among the top 10. On an MoM basis, Tecno recorded growth of 33% to 0.04mn units, while Xiaomi saw an increase of 117% to 0.13mn units in Sep-2024.
§ Outlook: With the current monthly run rate and imposition of 18% sales tax on all mobile phones in budget FY25, total mobile phone demand may reach 33mn units in 2024 vs 22.9mn units sold in 2023, up 44% YoY.
§ Buy stance on AIRLINK: Within the listed sector, we believe Air Link Communication (AIRLINK) is well positioned to capitalize on rising smartphone sales in Pakistan. We have a buy stance on AIRLINK, with the stock trading at an FY25F P/E of 8.5x and an FY26F P/E of 8.0x, compared to its 3-year average P/E (since IPO) of 10.0x, representing discounts of 14% and 19%, respectively.
§ Please refer to our detailed coverage initiation report, issued on Aug 03, 2024 titled ‘Air Link Communication (AIRLINK) – Buy: Well-Positioned to Capitalize on Rising Smartphone Sales in Pakistan, for more details.
Courtesy – Topline Pakistan Research
