Kot Addu Power (KASE:KAPCO) - Share price, News & Analysis

Q: What is the Fair Price of KAPCO when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

KAPCO (PKR29.35) is trading below our estimate of [[fair value]] (PKR3040.31)

KAPCO fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	0/6
Past Performance	2/6
Financial Health	6/6
Dividends	4/6

KAPCO Stock Overview

Kot Addu Power Company Limited owns, operates, and maintains a multi-fuel fired power plant located in Kot Addu, Punjab, Pakistan.

Rewards

Trading at 99% below our estimate of its fair value

Risk Analysis

Dividend of 42.59% is not well covered by earnings

Profit margins (2.5%) are lower than last year (35.8%)

Kot Addu Power Competitors

Nishat Power

KASE:NPL

PK₨8.4b

Engro Powergen Qadirpur

KASE:EPQL

PK₨8.8b

Hub Power

KASE:HUBC

PK₨88.5b

Kohinoor Energy

KASE:KOHE

PK₨6.2b

Price History & Performance

Summary of all time highs, changes and price drops for Kot Addu Power
Historical stock prices
Current Share Price	PK₨29.35
52 Week High	PK₨40.75
52 Week Low	PK₨26.03
Beta	0.75
1 Month Change	5.31%
3 Month Change	7.43%
1 Year Change	-25.22%
3 Year Change	2.91%
5 Year Change	-59.29%
Change since IPO	-32.45%

Shareholder Returns

	KAPCO	PK Renewable Energy	PK Market
7D	6.0%	3.7%	1.6%
1Y	-25.2%	-11.4%	-15.8%

Return vs Industry: KAPCO underperformed the PK Renewable Energy industry which returned -11.4% over the past year.

Return vs Market: KAPCO underperformed the PK Market which returned -15.8% over the past year.

Price Volatility

Is KAPCO's price volatile compared to industry and market?
KAPCO volatility
KAPCO Average Weekly Movement	3.6%
Renewable Energy Industry Average Movement	5.1%
Market Average Movement	5.3%
10% most volatile stocks in PK Market	8.0%
10% least volatile stocks in PK Market	3.3%

Stable Share Price: KAPCO is less volatile than 75% of PK stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: KAPCO's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1996	535	Aftab Butt	https://www.kapco.com.pk

Kot Addu Power Company Limited owns, operates, and maintains a multi-fuel fired power plant located in Kot Addu, Punjab, Pakistan. The company’s power plant has a capacity of 1,600 MW that uses gas, furnace oil, and diesel to generate electricity. It sells its electrical energy to the Pakistan Water and Power Development Authority.

Kot Addu Power Fundamentals Summary

How do Kot Addu Power's earnings and revenue compare to its market cap?
KAPCO fundamental statistics
Market Cap	PK₨24.99b
Earnings (TTM)	PK₨2.53b
Revenue (TTM)	PK₨101.08b

10.2x

P/E Ratio

0.3x

P/S Ratio

Is KAPCO overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
KAPCO income statement (TTM)
Revenue	PK₨101.08b
Cost of Revenue	PK₨87.57b
Gross Profit	PK₨13.52b
Other Expenses	PK₨10.99b
Earnings	PK₨2.53b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	2.87
Gross Margin	13.37%
Net Profit Margin	2.50%
Debt/Equity Ratio	59.8%

How did KAPCO perform over the long term?

See historical performance and comparison

Dividends

42.6%

Current Dividend Yield

261%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is KAPCO undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for KAPCO?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for KAPCO. This is calculated by dividing KAPCO's market cap by their current preferred multiple.
What is KAPCO's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	PK₨24.99b

KAPCO key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.09x
Enterprise Value/EBITDA	0.7x
PEG Ratio	n/a

Price to Earnings Ratio vs Peers

How does KAPCO's PE Ratio compare to its peers?

KAPCO PE Ratio vs Peers

The above table shows the PE ratio for KAPCO vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	4.4x
NPL Nishat Power	2.6x	n/a	PK₨8.4b
EPQL Engro Powergen Qadirpur	6.7x	n/a	PK₨8.8b
HUBC Hub Power	3x	26.7%	PK₨88.5b
KOHE Kohinoor Energy	5.2x	n/a	PK₨6.2b
KAPCO Kot Addu Power	10.2x	n/a	PK₨25.0b

Price-To-Earnings vs Peers: KAPCO is expensive based on its Price-To-Earnings Ratio (10.2x) compared to the peer average (4.4x).

Price to Earnings Ratio vs Industry

How does KAPCO's PE Ratio compare vs other companies in the Asian Renewable Energy Industry?

Price-To-Earnings vs Industry: KAPCO is expensive based on its Price-To-Earnings Ratio (10.2x) compared to the PK Renewable Energy industry average (5.2x)

Price to Earnings Ratio vs Fair Ratio

What is KAPCO's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

KAPCO PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	10.2x
Fair PE Ratio	n/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate KAPCO's Price-To-Earnings Fair Ratio for valuation analysis.

Share Price vs Fair Value

What is the Fair Price of KAPCO when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: KAPCO (PKR29.35) is trading below our estimate of fair value (PKR3040.31)

Significantly Below Fair Value: KAPCO is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.

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Future Growth

How is Kot Addu Power forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

22.5%

Forecasted Utilities industry annual growth in earnings

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if KAPCO's forecast earnings growth is above the savings rate (10.5%).

Earnings vs Market: Insufficient data to determine if KAPCO's earnings are forecast to grow faster than the PK market

High Growth Earnings: Insufficient data to determine if KAPCO's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: Insufficient data to determine if KAPCO's revenue is forecast to grow faster than the PK market.

High Growth Revenue: Insufficient data to determine if KAPCO's revenue is forecast to grow faster than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if KAPCO's Return on Equity is forecast to be high in 3 years time

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Past Performance

How has Kot Addu Power performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

4.2%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: KAPCO has high quality earnings.

Growing Profit Margin: KAPCO's current net profit margins (2.5%) are lower than last year (35.8%).

Past Earnings Growth Analysis

Earnings Trend: KAPCO's earnings have grown by 4.2% per year over the past 5 years.

Accelerating Growth: KAPCO's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: KAPCO had negative earnings growth (-88.4%) over the past year, making it difficult to compare to the Renewable Energy industry average (-15%).

Return on Equity

High ROE: KAPCO's Return on Equity (3.8%) is considered low.

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Financial Health

How is Kot Addu Power's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: KAPCO's short term assets (PKR129.4B) exceed its short term liabilities (PKR62.4B).

Long Term Liabilities: KAPCO's short term assets (PKR129.4B) exceed its long term liabilities (PKR3.0B).

Debt to Equity History and Analysis

Debt Level: KAPCO has more cash than its total debt.

Reducing Debt: KAPCO's debt to equity ratio has reduced from 157.9% to 59.8% over the past 5 years.

Debt Coverage: KAPCO's debt is well covered by operating cash flow (157.9%).

Interest Coverage: KAPCO earns more interest than it pays, so coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is Kot Addu Power current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

42.59%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: KAPCO's dividend (42.59%) is higher than the bottom 25% of dividend payers in the PK market (3.79%).

High Dividend: KAPCO's dividend (42.59%) is in the top 25% of dividend payers in the PK market (10.88%)

Stability and Growth of Payments

Stable Dividend: KAPCO's dividend payments have been volatile in the past 10 years.

Growing Dividend: KAPCO's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its high payout ratio (260.9%), KAPCO's dividend payments are not well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its low cash payout ratio (17.5%), KAPCO's dividend payments are well covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

4.5yrs

Average management tenure

CEO

Aftab Butt

14yrs

Tenure

PK₨15,733,000

Compensation

Mr. Aftab Mahmood Butt served as a Director at Kot Addu Power Company Limited since July 2007. He has been the Chief Executive at Kot Addu Power Company Limited since August 1, 2008 and was its Executive D...

Leadership Team

Experienced Management: KAPCO's management team is considered experienced (4.5 years average tenure).

Board Members

Experienced Board: KAPCO's board of directors are not considered experienced ( 2.8 years average tenure), which suggests a new board.

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/12 00:00
End of Day Share Price	2022/08/12 00:00
Earnings	2022/03/31
Annual Earnings	2021/06/30