DOL: All-time high prices to boost earnings
Local Hydrogen Peroxide (H2O2) prices have touched all-time high of PRs70/kg as (1) global pulp & paper industry is on a roll and (2) imports have started to slow following imposition on anti-dumping duties.
Adjusting for higher selling prices, we revise DOL's FY11E EPS estimates by PRs0.29 to PRs0.83 and PO to PRs10.8/sh, though retain our estimates for going forward.
Although the recent gas price hike by OGRA was lower than expected both the utilities have moved the courts, where last year's precedence of relaxed UFG terms may support their case for increase in gas prices.
DOL has appreciated 17% since our last upgrade on 6th Dec and is currently trading at FY12E P/E of 5.6x and offers 28% upside to our PO . We reiterate Buy.
In the near-term, we see sustainability of prices at current levels and company posting first-ever quarterly profits for 2QFY11E (PRs0.2/sh) as key price triggers.
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