SHARES HAVING MORE THAN 50% UPSIDE POTENTIAL

SHARES HAVING MORE THAN 50% UPSIDE POTENTIAL

FOLLOWING ARE SHARES THOSE HAVE 50% OR MORE UPSIDE POTENTIAL.

APL POTENTIAL 54%
POL POTENTIAL 62%
PPL POTENTIAL 70%
NBP POTENTIAL 68%
ENGRO CHEM. POTENTIAL 69%
FFBL POTENTIAL 51%
HUB POWER POTENTIAL 74%
DGKC POTENTIAL 59%
LUCKY CEMENT POTENTIAL 69%

"THE BEST SHARES TO BUY PSO AND PPL"

THE BEST SHARES TO BUY PSO AND PPL


AT THE MOMENT THE BEST SHARES TO BUY ARE PSO AND PPL AS UNDER
PSO CURRENT PRICE RS. 279.99 AND FAIR VALUE RS. 510, IT MEANS PSO HAS 81% UPDSIDE POTENTIAL.


PPL CURRENT PRICE RS. 212 AND FAIR VALUE RS. 360, IT MEANS PPL HAS 70% UPDSIDE POTENTIAL.

ON THE BASIS OF ABOVE POTENTIAL, I RECOMMEND TO BUY PPL AND PSO

"FAIR VALUE OF LUCKY CEMENT" RS. 90

"FAIR VALUE OF LUCKY CEMENT" RS. 90

AS PER LATEST DEVELOPMENT AT CEMENT SECTOR AND ESPACIALLY ON LUCKY CEMENT END, WE SUGGEST LUCKY CEMENT FAIR VALUE OF RS.90. WE SUGGEST BUY.

FAIR VALUE MILLAT TRACTORS RS. 287

FAIR VALUE MILLAT TRACTORS RS. 287

AS PER LATEST DEVELOPMENT PLANS BY MILLAT TRACTORS, IT IS EXPECTED MILLAT TRACTORS FAIR VALUE IS RS. 287.

FAIR VALUE OF HUBCO RS 34

FAIR VALUE OF HUBCO IS RS 34 DUE TO HIGHEST PAYOUT

FAIR VALUE OF HUBCO RS 34

FAIR VALUE OF HUBCO IS RS 34 DUE TO HIGHEST PAYOUT

FAIR VALUE OF PPL PAKISTAN RS. 374

FAIR VALUE OF PPL PAKISTAN RS. 374

FAIR VALUE OF PPL PAKISTAN IS RS. 374 DUE TO ITS HIGHEST GROWTH AND CURRENT TREND OF CRUDE OIL PRICES

REVISED FAIR VALUE OF SHARES

WE HAVE REVISED FAIR VALUE OF FOLLOWING SHARES AS UNDER


SHARE REVISED FAIR VALUE
MCB 310
BAFL 50
AKBL 41
NIB 11.50

"BUY" SHARES" AT KSE ON FAIR "VALUE OF SHARES" BASIS

""BUY SHARES" AT "KSE" ON "FAIR VALUE OF SHARES" BASIS

"SHARES" "CURRENT PRICE" "FAIR VALUES"

"APL" 264 412
"PSO" 330 512
"OGDCL" 105 138
"POL" 265 440
"PPL" 99 287
"UBL" 69 97
"DGKC" 47.98 61


KEEPING ON THE ABOVE SAID PRICES. ACCUMULTAE THE SHARES ON THE BASIS OF "FAIR VALUE OF SHARES".


MUHAMMAD IJAZ
0321-4767244

JOBS IN PAKISTAN visit www.pakjobs2008.blogspot.com

JOBS IN PAKISTAN visit www.pakjobs2008.blogspot.com

"FAIR VALUE" OF "CRESECT STEEL" "CSAP" RS. 162

"FAIR VALUE" OF "CRESECT STEEL" "CSAP" RS. 162

Current Price: Rs. 45.98

CSAP emerges as the golden bird among the small cap scrips trading at KSE. Crescent Steel is currently trading atCY09E P/Ex of mere 1.9x (sector CY09Ex: 7x). The scrip currently offers a massive TSR of 72% (including 8%dividend yield) to the intrinsic value of Rs 162/share. Sales are expected to surge by a 3-year CAGR of 27%,based on an expected increase in steel notional capacity & increased product price. This coupled with strong otherincome in the form of dividends would support the bottom line to grow at 3-year CAGR of 35%. Major risks to ourvaluation include slump in consumers’ purchasing power & increase in discount rate. We suggest investors toAccumulate at current market price of Rs 45.98/share.

"FAIR VALUE" OF "NETSOL" RS. 174

"FAIR VALUE" OF "NETSOL" RS. 174

current Price: Rs.75.39

The company’s recent breakthrough into the European market and newly elected government is likely to increasedemand for their products. Netsol has decided to acquire 100% stake in Netsol Tech Europe (NTE) by private equityplacement amounting to Rs1.0b (10.03m shares at Rs99.85 per share) and also plans to increase its Paid-up capital by88% to 150m shares. Based on these investments coupled with appreciation of US dollar will make Netsol moreattractive for international companies looking to outsource in this area. In Jul07 US$ stood at PKR60.4 which rose toPKR67.78 in Jun’08, depicting an increase of 12.2%. Going forward, the net sales revenue of the company is expected toincrease at a 4 year CAGR of 24.3%. Keeping in mind the forecasted potential in revenue growthand appreciating dollar, we recommend investors to take long term exposure in the stock. The stock offers 56.7% TSRfrom our target price of Rs174 per share.

FAIR VALUE OF APL RS. 462

"FAIR VALUE" OF "APL" RS. 462

Current Price: Rs.331.53

APL’s two major advantages are that; it is a part of a vertically integrated group and it’s less susceptibility towardsoil price fluctuations because its volumes are driven from non-energy products and furnace oil, which are deregulatedproducts. APL has been aggressively expanding storage capacity and retail network which currently stands at 200outlets. It handles approximately 28% of NRL and ARL offtake and is expected to generate approximately Rs838m inFY’08. Future plans include building of new terminal at Karachi at cost of Rs100m, new storage capacity of 2,700tons for HSD commissioned at Bulk oil terminal at Rawalpindi & sale of LSFO Attock Gen from FY10. Stock is trading at alow forward PER of 6.49x and gross margins are expected to remain in the range of 5.0% by the end of next fiscal year.At the current price level the scrip is trading at it’s 52 week low of Rs331.53/share and from this level the scrip’s TSR is33.3% (including dividend yield of 5.1%) from our target price of Rs462/share.

"FAIR VALUE" OF PSO RS. 471

"FAIR VALUE" OF PSO RS. 471

Current Price: Rs.381.0

Superior dividend payout of 36% in FY08 & 62% in FY’09 is the key investment attraction for this stock. Also the scrip is trading at a low short term forward FY08 PER of 5.46x as against sector’s PER of 6.81x. Besides this, the company has the largest infrastructure & retail network of POL products with 69% of total market share. Going forward the inventory gains witnessed during the last fiscal year are likely to shrink and the profit margins will go down. Net margin of
the company in FY09 is likely to be around 2% Investors are advised to take short term exposure in the stock based on high dividend yield and low forward PER. From the current price of Rs381.0, the stock offers TSR of 27.1% (including dividend yield of 7.9%) from our target price
of Rs471 per share

"FAIR VALUE" "POL" OF RS. 399

"FAIR VALUE" "POL" OF RS. 399

Current Price: Rs.284.29

The main earning drivers for POL are the rising international oil prices which have helped in offsetting the decline in productionfrom major oil field, Pindori. The production outlook of the company is stable in the short to medium term due tocontinued problems at Pindori, however production from Tal block and Adhi field is likely to augment in the coming yearsdue to development plans and significant reserves of these two field which may help the production outlook for the long term toimprove to a positive stance. Other income will be an important revenue driver and is likely to contribute Rs1.3b in FY’09 dueto increased financial assets income & dividend income from associates and subsidiaries. POL holds 25.0% stake in NRL &7.0% stake in APL. Also the company is likely to book capital gain of Rs1.79b in its investment in APL having an impact ofRs9.06/share. Forward PER for FY09 is on the lower side at 7.30x. At the current price of Rs284.29, the stock is trading at TSR of35.7% (including dividend yield of 7.0%) from our target price of Rs399/share.

"FAIR VALUE" "PPL" RS. 315

"FAIR VALUE" "PPL" RS. 315

Current Price: Rs.195.50

During 9M08, 84% of PPL’s sales revenue was generated through natural gas sales. International crude oil prices, whichdetermine well head gas prices, are expected to remain around US$100 in the medium term & expiry of 2002 Sui &Kandhkot gas price agreement on Dec07, will be strong catalysts for revenue growth in FY09-FY11. About 60% of thecompany’s gas sales revenue comes from Sui & Kandkot and in 1HY09, the well head gas price is expected to increase by18% to Rs126.8/mmbtu. During Jan-Jun08 the Arab Light Crude prices have risen by 78.4% to US$104.17/bbl fromUS$58.38/bbl in the same period last year. The net income of PPL is expected to grow by 32% in FY’09 and 11.6% inFY’10. At the current price level the stock is trading at a low forward PER of 5.52xBased on the upcoming upward revision in well head gas prices and forecasted sales revenue growth of above 30% inFY09, we recommend investors to take exposure in the stock for medium term. The stock currently offers TSR of 44.0%(including dividend yield of 6.1%) from our target price of Rs315 per share.

"FAIR VALUE" OF "OGDCL" RS. 160

"FAIR VALUE" OF "OGDCL" RS. 160

Current Price Rs.105.5

OGDC’s gas reserves life is 30.7 years while that of oil is 12.3 years. The company has always had the most aggressive plantowards exploration and going forward in FY09-10 these activities are going to remain aggressive with target of 52-65wells. The company’s success ratio remained at 1:0.21 in FY08, despite a significant number of jobs carried over fromFY07, when success ratio stood at 1:0.24. The stock is trading at a low forward PEx of 6.88 based on the current stock price.Going forward the company’s net income is expected to grow at 28% in FY’09 & at a 3 year CAGR of 16% on the back oftop-line growth based on rise in production volumes and improved oil & gas prices. The dividend yield of the companyhas remained above 8.0% since FY06 and is expected to be highest in FY09 at 9.5%. At the current price of Rs105.5, the stock is trading at TSR of43.6% (including 9.5% dividend yield) from our PT of Rs160/share. We recommend investors to take long termexposure in the stock based on high dividend yield and forecasted increase in earnings

"FAIR VALUE" OF FFC RS. 145

"FAIR VALUE" OF "FFC" RS. 145

Current Price Rs.120.0

FFC offers 27% TSR (including 10% dividend yield) from our Dec 08 PT of Rs.145/share.We expect FFC to show a stable Gross profit margin of 33% during CY08-CY10, while the net profit margins areestimated to average around 16% during the same period. FFC does not have any expansion plans to its core businessin the foreseeable future, and given the cash rich nature of the company, we expect FFFC to continue maintaining 100%payout ratio in the future. Major risks to our valuation include a more/less than anticipated increase in Urea prices, shortage of Feedstock gas and change in subsidy on DAP, Urea and gas & increase in discount rate.