Result review of Avanceon Limited

PKR 4.93, up 15% YoY. PAT during the quarter settled at PKR 299mn (PKR 1.41/share), compared to a PAT of PKR 439mn (EPS: PKR 2.07) SPLY, down 32% YoY.  Impressive jump in yearly earnings during CY20 is driven by a healthy jump in sales. Earnings during 4QCY20 took a sequential hit primarily on account of an exchange loss incurred during the quarter.

 Result Highlights

·        Total Revenue of the company settled at ~PKR 6,445mn during CY20, registering a 32% YoY jump while gross profit clocked in at PKR 1,842mn, up 24% YoY. Gross margins clocked in slightly lower YoY, settling at 29% vis-à-vis 30% SPLY. During 4QCY20, gross profit clocked in at PKR 835mn, registering a massive 86% QoQ jump while margins improved to 30% against 28% last quarter. The improvement in margins was fueled by a massive acceleration in revenue which saw a 74% QoQ jump, which we view, is on account of previous delays owing to COVID which have reflected now. Moreover, typically AVN portrays healthy trends in sales during 4Q of every year.

·        Admin. and Selling expenses for the company witnessed a contraction of 3% YoY while registering a notable 63% QoQ jump.

·        Other income witnessed a 48% YoY decline while posting a loss of PKR 169mn during 4QCY20 which is most likely attributable to an exchange loss.

·        Effective tax rate settled at 11.7% during CY20 against 5.3% in CY19.

Recommendation

·        We maintain our “HOLD” stance on the scrip with a Jun’21 TP of PKR 94/share.

 Courtesy -AHL Research

 
 

Sharing is caring

Leave a Reply