Engro Polymer & Chemicals Limited (EPCL): Strong Margins and Capacity Expansion to drive earnings; Initiating Coverage with a ‘Buy’ – By Topline Research
<ul><li><span style="font-family:Arial, Helvetica, sans-serif;font-size:medium;">We initiate coverage on Engro Polymer and Chemicals Limited
(EPCL), Pakistan’s only fully integrated Chlor-Vinyl chemical complex, with a
‘Buy’ rating and a Target Price of Rs40. EPCL offers capital upside of 31% to
our TP. The stock is currently trading at a 2020E and 2021F P/E of 6.9x and
5.9x, respectively - which are at a discount of 5%/12% to the market’s
multiple. On comparison with regional players EPCL is trading at over 50%
discount.</span></li><li><span style="font-family:Arial, Helvetica, sans-serif;font-size:medium;">We believe EPCL is
setting itself up, through multiple expansions, to reap the benefits of (1)
potential pick up in housing construction activity (from both public and
private sectors), (2) low per cap...
