Treet Corporation Ltd. (TREET) held its corporate briefing yesterday to discuss its 1HFY25 financial results and future outlook. The following are the key highlights:
- The company posted an unconsolidated topline of PkR6.5bn in 1HFY25 compared to PkR5.6bn in 1HFY24, up 16% YoY, due to a 22% YoY increase in prices.
- Earnings for 1HFY25 clocked in at PkR647mn (EPS: PkR1.74) vs a loss of PkR206mn (LPS: PkR0.95) during 1HFY24. Profit of PkR594mn was recorded from the sale of TBL shares.
- The company has sold ~ a 12-13% stake in Treet Battery Ltd., and its holding currently stands at ~82-83%.
- Management reported that they currently export to 40 countries, with China, Saudi Arabia, and several African nations being key destinations.
- Additionally, the company has recently established physical presence in the Middle East and is finalizing a warehousing agreement to boost export sales.
- TBL’s revenue for 1HFY25 was PkR4.2 bn vs. PkR3.6bn in 1HFY24, up 16% YoY. This was primarily attributed to a 22% YoY increase in sales volume, reaching 350,000 units.
- Management mentioned that a study on the Lithium-Ion battery market is underway, after which a decision will be made regarding their involvement in this segment.
- Furthermore, management views solar energy as a promising growth avenue for the battery segment. With declining net metering buyback rates, more users are expected to transition to backup-based solar setups.
- Management believes that declining financing rates will drive higher sales in the automotive segment, resulting in increased demand for batteries.
- Treet’s pharmaceutical subsidiary, Renacon’s revenue for 1HFY25 clocked in at PkR801mn compared to PkR643mn in 1HFY24, up 24%YoY. The said increase is primarily attributable to a 17% YoY increase in sales volumes and a 6.4% YoY increase in average. Unit price.
- Management is registering dialysis solutions with health authorities in 10 countries to enhance exports. The newly launched production facility is also expected to help unlock further export potential.
- Renancon holds approximately 60-65% of the local market share in dialysis solutions and charges a premium compared to competitor brands.
- Renancon’s profitability over the next six months is expected to be lower due to the borrowing costs associated with the new production facility.
- The scrip is not in our formal coverage.
Courtesy – AKD Research
