STAFF REPORTER
KARACHI The share price of The Hub Power Company Ltd. (HUBC) has declined by 29% from its recent high of PKR 103.2/share (Jan’20). The decline was triggered by overall rout of the equity market. In our view, the market has overplayed the sentiments and we reinstate our coverage on HUBC with a BUY stance and SoTP based (Old plants are DDM based) Dec’20 target price of PKR 140.2/ share. With an expected return of 94% from last closing, we recommend a “BUY” on the scrip. Investment thesis is premised on: Strong earnings growth, diversification in coalbased power plant, higher expected payout from FY21, and rising RoE component of the base plant. During Aug’19 the China Power Hub Generation Company (CPHGC) has achieved commercial operation date (CoD) and providing electricity to the national grid. We expect the earnings of HUBC to grow to PKR 29.0/share in 2022 from PKR 8.7/share in FY19. The rise in earnings will primarily been driven by addition of CPHGC and Thar Energy Limited (TEL). In 1HFY20, CPHGC contributed PKR 4.0/share to the earnings of the company
