N D B Securities (Pvt) Ltd,

5th Floor,
# 40, NDB Building,
Nawam Mawatha,
Colombo 02.
Tel: +94 11 2131000
Fax: +9411 2314180
Buy
We expect the counter to outperform the broader market. Recommend adding/increasing exposure to the stock at current prices.
Hold
We do not expect the counter to significantly outperform the broader market. Recommend reducing holdings of the share by 50%in case of a downgrade. Maintain
current exposure in case of an upgrade.
Underweight
We expect the counter to underperform the market and recommend reducing holdings by 90%.
Q UARTERLY FINANCIALS
6-Jan-15

14.43

Bank and Finance

10.86

Stock Tracker

mths Q TR Mkt. Price

Share s

Market

2014

Growth

Net Assets

NP (mn)
1,609.34
7,244.07
7,244.07
1,187.90
69.08
5,761.92
5,761.92
518.29
588.89
201.03
2,196.60
1,596.45
(123.23)
50.70
50.70
190.89
2,551.88
1,529.00
1,529.00
135.82
154.98
291.26
134.59
489.40
489.40
747.00
398.38
301.47
414.51
414.51

11%
8%
8%
71%
1181%
7%
7%
96%
327%
-6%
49%
24%
44%
5%
5%
45%
54%
48%
48%
8%
2%
5%
48%
-23%
-23%
44%
45%
4%
-34%
-34%

(mn)
22,605.28
69,648.60
69,648.60
45,397.90
2,629.96
63,411.59
63,411.59
6,878.61
25,735.86
1,428.52
28,218.82
13,241.30
977.28
1,019.29
1,019.29
4,604.31
33,996.05
24,674.04
24,674.04
1,302.49
2,235.59
5,304.20
4,733.31
18,282.92
18,282.92
20,950.00
4,735.31
3,467.11
3,686.83
3,686.83

16%
18%
18%
10%
77%
15%
15%
31%
21%
28%
17%
20%
-13%
7%
7%
9%
16%
13%
13%
24%
10%
8%
6%
3%
3%
11%
17%
12%
15%
15%

34.19
13.27
13.27
15.35
17.48
22.51
22.51
29.38
10.57
7.53
27.23
11.02
(2.06)
0.04
0.04
1.25
31.54
8.74
8.74
7.09
4.22
4.75
8.83
18.93
18.93
1.38
2.13
16.67
10.06
10.06

104.75
171.14
313.55
6,619.00
56.61
56.61
3,135.79
53.19
2,606.90
23.06
9.57
546.23
82.28

-51%
-216%
94%
0%
114%
114%
18%
71%
22%
-1%
149%
80%
-70%

1,849.50
11,791.93
10,068.07
4,848.00
2,689.00
2,689.00
60,404.69
1,591.47
4,163.67
853.16
923.37
7,598.16
10,336.96

6%
-3%
12%
193%
10%
10%
13%
12%
101%
5%
5%
27%
0%

6.36
(1.77)
12.79
47.20
2.56
2.56
24.70
7.14
78.72
1.53
1.51
24.64
1.25

261.10
261.10
142.60

427.85
427.85
209.86

-39%
-39%
-32%

6,826.66
6,826.66
5,154.76

7%
7%
6%

5.51
5.51
9.60

401.69
120.51
285.20
687

13,869
32,700

115.56
1,182.12

644.46
1,215.81

-82%
-3%

10,825.26
15,593.85

1%
15%

2.14
2.36

196.39
75.00
515.29
990.37
2,009.39
406.00
1,954.92
779.00
133.83

86,410
25,493
38,801
245,612
17,482
41,818
17,594
13,087
7,160

1,734.29
958.36
886.91
4,794.03
818.29
1,325.70
307.12
143.38
282.75

(242.90)
886.99
984.20
3,645.61
481.16
1,226.61
665.36
92.91
241.75

814%
8%
-10%
32%
70%
8%
-54%
54%
17%

46,949.66
24,384.85
14,759.18
126,748.50
9,514.35
32,626.20
11,083.05
7,216.61
5,028.80

8%
8%
12%
12%
18%
8%
6%
4%
11%

17.80

152.34

2,712

36.47

(72.30)

150%

1,967.05

17.30
47.90
21.90
3.30

528.46
223.73
1,099.09
1,409.51

9,142
10,717
24,070
4,651

213.48
269.19
492.46
73.48

211.29
465.06
441.33
171.81

1%
-42%
12%
-57%

3,232.70
4,316.02
5,408.68
3,891.87

2-Jan-15
251.50
175.00
128.00
220.00
48.00
195.00
154.00
166.10
90.00
43.10
250.00
100.00
26.00
1.40
0.50
25.90
237.00
98.00
60.00
46.40
84.00
164.00
302.00
1,375.00
559.00
24.80
23.80
93.00
92.50
75.00

(Mn)
104.88
809.86
55.58
265.10
101.25
321.01
80.70
69.26
475.20
50.00
160.41
230.61
67.50
1,191.77
614.07
295.04
167.91
175.98
168.98
41.55
50.00
85.71
30.00
20.00
6.41
1,560.00
363.00
25.18
46.30
8.01

Cap
26,378
141,725
7,114
58,321
4,860
62,596
12,427
11,504
42,768
2,155
40,103
23,061
1,755
1,668
307
7,642
39,795
17,246
10,139
1,928
4,200
14,057
9,060
27,500
3,586
38,688
8,639
2,341
4,283
600

NP (mn)
1,793.20
7,848.11
7,848.11
2,035.02
884.67
6,166.77
6,166.77
1,017.42
2,512.37
188.36
3,276.27
1,987.34
(69.53)
53.33
53.33
277.08
3,930.67
2,260.12
2,260.12
147.30
158.24
305.35
198.68
374.97
374.97
1,075.00
578.91
314.75
273.03
273.03

Beve rage Food and Tobacco

BFL
6
Sept
127.00
CARG
6
Sept
153.00
CCS
6
Sept
267.80
CT C
9
Sept
1,070.00
COCO
6
Sept
26.80
COCO-x
6
Sept
23.90
DIST
6
Sept
210.60
KFP
6
Sept
87.00
NEST
9
Sept
2,105.00
T SML
6
Sept
46.50
LAMB
6
Sept
62.00
LION
6
Sept
654.60
LMF
6
Sept
120.50

16.00
224.00
95.04
187.32
89.77
4.77
300.00
25.50
53.73
30.00
31.40
80.00
40.00

2,032
34,272
25,452
200,436
2,406
114
63,180
2,219
113,092
1,395
1,947
29,608
4,820

50.85
(198.51)
607.63
6,631.00
120.87
120.87
3,704.85
91.00
3,172.09
22.89
23.78
985.80
24.94

Chemical and Pharmace uticals

CIC
6
Sept
85.00
CIC-x
6
Sept
66.40
HAYC
6
Sept
173.00

72.90
21.87
29.71

6,197
1,452
5,140
11,337

Construction and Enginee ring

DOCK
9
Sept
193.00
AEL*
6
Sept
32.70

71.86
1,000.00

Diversifie d
CARS
HAYL
HHL
JKH*
RICH
SPEN
EXPO
SHL
SUN

440.00
339.90
75.30
248.00
8.70
103.00
9.00
16.80
53.50

Footwear and Textiles

MGT
6
Sept
Healthcare
AMSL
LHCL
ASIR
NHL

CFIN
COMB*
COMB-x
DFCC
CFVF
HNB*
HNB-x
LFIN
LOLC
LVEN
NDB
NT B*
PMB
SEMB
SEMB-x
PABC
SAMP*
SEYB
SEYB-x
VFIN
HASU
UAL
CT CE
CINS
CINS-x
PLC
JINS
SDB
CDB
CDB-x

6
9
9
6
6
9
9
6
6
6
9
9
6
9
9
9
9
9
9
6
9
9
9
9
9
6
9
9
6
6

6
6
6
6
6
6
6
6
6

6
9
6
6

Sept
Sept
Sept
Sept
Sept
Sept
Sept
Sept
Sept
Sept
Sept
Sept
Sept
Sept
Sept
Sept
Sept
Sept
Sept
Sept
Sept
Sept
Sept
Sept
Sept
Sept
Sept
Sept
Jun
Jun

Sept
Sept
Sept
Sept
Sept
Sept
Sept
Sept
Sept

Sept
Sept
Sept
Sept

2013

RO E

EPS

Annualised

DPS

DY

1.17
2.17
1.59
1.28
1.85
1.24
0.98
1.67
1.66
1.50
1.42
1.74
1.80
2.48
0.89
1.66
1.17
1.37
0.84
1.48
1.88
2.65
1.91
1.99
0.81
1.85
1.82
0.68
1.36
1.10

4.70
4.50
4.50
5.50
4.00
8.50
8.50
6.50
0.50
1.00
10.00
2.10
8.00
2.25
2.25
1.00
3.25
6.00
2.00
16.00
16.00
1.25
2.00
12.00
3.00
3.00

1.9%
2.6%
3.5%
2.5%
8.3%
4.4%
5.5%
3.9%
0.6%
2.3%
4.0%
2.1%
0.0%
0.0%
0.0%
0.0%
3.4%
2.3%
3.8%
2.2%
3.9%
3.7%
0.7%
1.2%
2.9%
5.0%
8.4%
12.9%
3.2%
4.0%

115.59
52.64
105.94
25.88
28.44
28.44
201.35
62.41
77.50
28.44
29.41
94.98
258.44

1.10
2.91
2.53
41.34
0.94
0.84
1.05
1.39
27.16
1.64
2.11
6.89
0.47

1.25
2.00
6.00
48.75
0.30
0.30
3.25
2.00
60.00
1.00
4.00
1.50

1.0%
1.3%
2.2%
4.6%
1.1%
1.3%
1.5%
2.3%
2.9%
2.2%
0.0%
0.6%
1.2%

16.50
15.43
12.05
18.02

72.03
72.03
173.49

1.18
0.92
1.00

1.63
1.63
6.00

1.9%
2.5%
3.5%

154.08
2,364.24

18.49
90.01
13.83

150.65
15.59

1.28
2.10

4.00
0.75

2.1%
2.3%

17.66
25.56
3.44
14.81
0.81
6.53
0.31
0.37
4.23

3,468.58
1,916.72
1,773.81
14,667.40
1,636.58
2,651.41
614.24
286.77
565.49

17.89
24.91
13.30
21.87
16.75
10.68
15.77
28.64
45.64
12.66

239.07
325.13
28.64
127.98
4.73
80.36
5.67
9.26
37.58

1.84
1.05
2.63
1.94
1.84
1.28
1.59
1.81
1.42

2.00
5.00
1.00
3.40
0.45
2.00
0.33
0.16
0.95

0.5%
1.5%
1.3%
1.4%
5.2%
1.9%
3.7%
0.9%
1.8%

4%

0.48

72.94

37.18
37.18

12.91

1.38

0.0%

14%
9%
18%
4%

0.81
1.60
0.90
0.10

426.96
358.92
984.91
146.97

25.33
21.41
29.86
24.44
31.65

6.12
19.29
4.92
2.76

2.83
2.48
4.45
1.20

1.56
1.50
0.55
0.06

9.0%
3.1%
2.5%
1.8%

Earnings
3,586.40
10,746.79
4,070.05
1,769.35
7,225.84
2,034.84
5,024.74
376.72
4,368.36
2,541.29
(139.06)
46.93
369.44
5,295.42
1,537.29
294.60
210.99
407.13
264.91
378.55
2,150.00
771.88
419.66
465.56
80.50

101.70
(397.02)
1,215.26
8,841.33
229.54
7,409.69
182.01
4,229.45
45.77
47.56
1,971.59
49.87

Annualise d

BV

PER
7.36
13.19
9.65
14.33
2.75
8.66
6.84
5.65
8.51
5.72
9.18
9.07
(12.62)
35.55
12.70
20.68
7.51
11.22
6.87
6.54
19.91
34.53
34.20
72.64
29.53
17.99
11.19
5.58
9.20
7.46

215.53
80.48
80.48
171.25
25.97
157.86
157.86
99.32
54.16
28.57
175.92
57.42
14.48
0.56
0.56
15.61
202.47
71.53
71.53
31.35
44.71
61.88
157.78
692.16
692.16
13.43
13.04
137.72
67.89
67.89

20.10
19.98
(86.32)
20.94
22.67
10.48
9.35
8.53
12.19
26.74
30.48
40.93
26.56
96.65

PBV

Research Team Sidath Kalyanaratne, Dhinali Peiris, Vaishalie Shakespeare, Raguram Raamakrishnan, Upul Atapattu

HO LD

BUY

HO LD

BUY

BUY

HO LD

Hote ls and Trave ls

mths Q TR Mkt. Price
2-Jan-15
AHPL
6
Sept
69.00

Share s
(Mn)
442.78

Market
Cap
28,780

2014
NP (mn)
774.92

2013
NP (mn)
960.21

Growth
%
-19%

Net Assets
(mn)
21,797.52

RO E

EPS

18.06
Annualised Annualise d
Earnings
PER
2,213.88
19.71

BV

PBV

DPS

DY

7%

3.50

49.23

1.40

4.00

5.8%

Sept
Sept
Sept
Sept
Sept

79.00
85.30
17.20
35.40
24.60

336.29
5.86
1,456.15
75.51
36.01

26,567
500
25,046
2,673
886

496.51
9.06
470.91
12.92
12.92

573.48
(6.37)
146.21
(92.15)
(92.15)

-13%
242%
222%
114%
114%

15,283.54
273.66
18,201.15
1,989.20
1,989.20

6%
7%
8%
1%
1%

2.95
3.09
0.95
0.23
0.23

993.02
18.13
1,383.34
17.50
8.35

26.75
27.57
18.11
152.74
106.14

45.45
46.71
12.50
17.84
17.84

1.74
1.83
1.38
1.98
1.38

1.50
-

1.9%
0.0%
0.0%
0.0%
0.0%

Investment Trust
GUAR
6
Sept
RHL
6
Sept
RHL-x
6
Sept

199.50
32.00
24.30

87.84
44.52
6.43

17,523
1,425
156

4,183.28
157.14
157.14

(653.12)
100.49
100.49

741%
56%
56%

23,828.20
2,999.69
2,999.69

38%
11%
11%

95.25
6.17
6.17

8,366.56
274.62

2.19
2.09
5.19
3.94

271.28
58.88
58.88

0.74
0.54
0.41

5.00
0.70
0.70

2.5%
2.2%
2.9%

Land and Property

CLND
9
Sept
OSEA*
9
Sept
PDL
9
Sept

37.00
26.30
98.00

199.88
843.48
66.00

7,396
22,184
6,468

(35.18)
2,174.64
288.25

6.32
1,769.03
294.36

-657%
23%
-2%

2,721.44
24,239.69
3,590.73

-2%
7%
11%

(0.23)
2.12
5.82

(46.91)
1,790.94
384.34

16.94
(157.66)
12.39
16.83

13.62
28.74
54.40

2.72
0.92
1.80

1.45
3.00

0.0%
5.5%
3.1%

11.84
11.35
7.04
8.19
(104.81)
11.20
17.55
10.16
6.65
10.84
9.01
13.42
9.50
7.04
11.04

104.48
124.32
128.19
45.91
3.54
49.57
110.21
110.05
98.41
31.23
71.25
28.92
28.92
4.35

0.73
2.75
1.12
0.89
1.39
8.05
0.81
0.89
1.19
2.53
1.54
2.26
1.68
4.87

1.00
5.50
0.14
0.38
15.00
1.50
3.00
1.00
1.65
4.00
1.30
1.30
1.30

1.3%
0.0%
3.8%
0.3%
7.8%
3.8%
1.7%
3.1%
0.9%
2.1%
3.6%
2.0%
2.7%
6.1%

AHUN
HSIG
KHL
SHOT
SHOT -x

6
6
6
6
6

Manufacturing
ACL
6
CERA
6
DIPD
6
GRAN
9
GLAS
6
LLUB*
9
KCAB
6
LWL
6
RCL
6
T YRE
6
T ILE
6
T KYO
6
T KYO-x
6
T JL*
6

Sept
Sept
Sept
Sept
Sept
Sept
Sept
Sept
Sept
Sept
Sept
Sept
Sept
Sept

76.50
120.10
144.00
41.00
4.90
399.00
89.60
98.00
116.80
79.00
110.00
65.50
48.50
21.20

59.89
30.00
59.86
60.00
950.09
120.00
21.80
54.60
110.79
80.40
53.05
222.75
111.38
655.00

4,582
3,603
8,620
2,460
4,655
47,880
1,953
5,351
12,940
6,352
5,836
14,590
5,402
13,886

201.79
255.85
526.05
(17.60)
207.79
2,188.85
96.10
402.46
596.71
352.39
217.48
1,151.44
1,151.44
445.84

190.48
64.75
483.48
135.42
376.75
1,941.78
130.43
112.24
32.68
336.14
338.15
1,209.93
1,209.93
503.58

6%
295%
9%
-113%
-45%
13%
-26%
259%
1726%
5%
-36%
-5%
-5%
-11%

6,257.94
3,729.53
7,673.71
2,754.40
3,360.02
5,948.87
2,402.49
6,008.58
10,902.89
2,510.51
3,779.80
9,664.48
9,664.48
2,849.90

7%
14%
13%
-1%
12%
51%
8%
11%
11%
29%
12%
25%
25%
27%

6.74
17.06
17.58
(0.39)
0.44
22.73
8.82
14.74
10.77
8.77
8.20
6.89
6.89
1.92

403.57
511.70
1,052.10
(23.47)
415.59
2,727.60
192.21
804.93
1,193.42
704.78
434.96
1,535.25

Motors
DIMO
UML

6
6

Sept
Sept

636.00
103.90

8.88
100.90

5,645
10,484

67.40
401.04

76.49
1,086.35

-12%
-63%

8,715.72
8,187.41

2%
10%

15.19
7.95

134.80
802.08

17.22
41.88
13.07

981.89
81.14

0.65
1.28

10.00
12.00

1.6%
11.5%

O il Palms
BUKI
6

Sept

715.40

102.00

72,971

1,123.75

(569.64)

297%

29,527.88

8%

22.03

2,247.50

32.47
32.47

289.49

2.47

3.00

0.4%

Plantations
BALA
KGAL
KVAL
NAMU
MASK
T PL
WAT A
KOT A
BOPL
ELPL

Sept
Sept
Sept
Sept
Sept
Sept
Sept
Sept
Sept
Sept

26.60
93.00
73.00
88.50
12.80
33.00
18.50
31.40
12.00
23.60

23.64
25.00
34.00
23.75
53.95
23.75
236.67
40.00
83.75
72.87

629
2,325
2,482
2,102
691
784
4,378
1,256
1,005
1,720

14.27
108.32
7.45
108.97
(52.40)
91.72
262.14
(333.85)
114.68
161.27

98.05
214.46
191.82
158.41
(205.46)
101.12
98.58
(337.87)
(35.46)
86.39

-85%
-49%
-96%
-31%
74%
-9%
166%
1%
423%
87%

2,770.82
3,542.80
2,662.28
2,184.19
1,356.86
1,518.83
4,362.13
2,770.86
1,029.88
3,069.58

1%
6%
0%
10%
-8%
8%
12%
-23%
23%
11%

0.81
8.67
0.29
9.18
(1.94)
5.15
2.22
(16.69)
2.74
4.43

19.03
216.63
9.93
217.93
(104.81)
122.29
524.28
(667.69)
229.35
322.54

10.35
33.04
10.73
249.93
9.64
(6.59)
6.41
8.35
(1.88)
4.38
5.33

117.23
141.71
78.30
91.97
25.15
63.95
18.43
69.27
12.30
42.13

0.23
0.66
0.93
0.96
0.51
0.52
1.00
0.45
0.98
0.56

1.00
13.50
3.50
10.50
3.00
0.75
2.50
0.10
0.75

3.8%
14.5%
4.8%
11.9%
0.0%
9.1%
4.1%
8.0%
0.8%
3.2%

Powe r and Ene rgy

HPWR
6
Sept
VPEL
6
Sept
VLL
6
Sept
LIOC
6
Sept
LGL
6
Sept
LGL-x
6
Sept

18.50
7.50
5.70
60.70
42.20
37.70

125.20
747.11
477.27
532.53
335.00
52.00

2,316
5,603
2,720
32,325
14,137
1,960

(62.23)
619.31
181.28
2,336.45
822.89
822.89

194.12
497.33
137.48
2,834.93
890.21
890.21

-132%
25%
32%
-18%
-8%
-8%

2,450.69
2,611.68
1,300.78
18,580.64
7,277.29
7,277.29

-5%
54%
30%
26%
23%
23%

(0.99)
1.66
0.76
8.77
4.25
4.25

(124.45)
1,238.63
362.56
4,672.89
1,424.64
221.14

7.54
(18.61)
4.52
7.50
6.92
9.92
8.87

19.57
3.50
2.73
34.89
18.80
18.80

0.95
2.15
2.09
1.74
2.24
2.00

1.40
0.60
0.10
2.00
2.00
2.00

7.6%
8.0%
1.8%
3.3%
4.7%
5.3%

Telecommunications
DIAL*
9
Sept
SLT L
9
Sept

13.30
51.30

8,143.78
1,804.86

108,312
92,589

4,619.49
5,043.00

4,078.30
3,897.00

13%
29%

42,045.18
63,257.00

14%
11%

0.70
3.73

5,700.64
6,724.00

16.17
19.00
13.77

5.16
35.05

2.58
1.46

0.58
0.85

4.4%
1.7%

108.00
59.00
119.50

70.88
35.99
125.21

7,655
2,123
14,963

942.76
75.70
464.56

363.30
84.80
370.11

159%
-11%
26%

15,199.50
1,732.39
5,115.61

13%
9%
12%

26.60
4.21
4.95

1,885.52
151.40
619.41

9.31
4.06
14.02
24.16

214.45
48.14
40.86

0.50
1.23
2.92

0.50
3.00
2.50

0.5%
5.1%
2.1%

Trading
BRWN
CWM
SINS

9
6
9
6
6
9
6
6
6
6

6
6
9

Sept
Sept
Sept

* Forecast EPS
** EPS adjuste d for cyclicality
Annualised results are considere d in all other case s

1,257.60

HO LD

BUY

HO LD
HO LD

BUY

HO LD

HO LD

Recommendations
JKH - Hold
JKH group PBT grew by 39.0% and profit attributable to the equity holders grew by 29.0% in Q2FY14/15 over the previous year. The property sector recovered in Q2FY14/15 due to higher
revenue recognition at the residential apartments whilst Consumer foods and Retail, Financial Services and Information Technology sectors performed exceptionally well. However, City
hotels to the leisure segment contribution have been below par whilst transport segment continue to struggle amidst stiff competition. Hence, we continue to recommend HOLD.
GLAS - Hold
Revenue growth in FY14/15H1 was a marginal 3.0% YoY while net profits grew significantly by 348.4% mainly due to the contribution of Rs 267 Mn from a land sale. The positive trend in
the domestic market continued during the 2nd Quarter with an increase of 18.0% being achieved. The company continued its upward momentum in productivity, by surpassing the
production volume during this half year as against that of the corresponding period of the last financial year. Amidst the substantial cost escalations, the increase in productivity helped
the company to better its profitability.
TJL - Buy
TJLs performance in 2QFY14/15 as anticipated recovered from the set back in the previous quarter due to drop in sales volumes to the US caused by abnormal weather. The top line and
bottom line in 2QFY14/15 grew YoY for by 7.5% and 7.2% respectively. The decline in cash balance by 31.7% from the prior quarter was partly due to capital expenditure and dividend
payments of USD 4.1 Mn and USD 2.7 Mn respectively. The new investment in the multi-fuel boiler and power plant successfully completed the construction phase as expected in
2QFY14/15 and is to be fully in operation in the quarter to follow. TJLs strong ROE, consistently high dividend payout, strong balance sheet position and expected profit growth tickers
down to an intrinsic value with a potential upside of 16.8%. Therefore we reiterate a BUY.
OSEA - Buy
Revenue grew 25.8% YoY due to a significant growth in the revenue from apartment sales of 34.0% as a result of the revenue recognition policy in respect to apartment sales from phase 2.
Gross margins remained intact despite the increase in cost of sales. Meanwhile, the bottom line grew at 15.4% YoY. Amidst falling treasury yields coupled with companys growth
prospects, the counter continues to show a notable upside.

NTB - Hold
NII increased QoQ by 20.0% to LKR 2.4 Bn for Q3FY14. Profit after tax increased QoQ by 35.0% to LKR 830.0Mn for Q3FY14. The bank continued to pursue high yielding income segments
whilst CASA increased to 30.0% of deposits by end Q3FY14. Therefore, bank NIM increased to 5.9% in Q3FY14/15 quarter compared to 5.7% witnessed in Q2FY14/15. The loan book
recorded a 10.0% increase for the nine months and a 15.0% YoYincrease. Despite the promising medium to long term growth prospects, coupled with attractive P/E valuations, we remain
cautious on the short term prospects.
KHL - Hold
Revenue for Q2FY14/15 recorded QoQ growth of 14.4% as opposed to the 33.2% decline recorded in the previous quarter. GP margin has thus improved to 65.2%. Finance expense has
shown a substantial QoQ reduction of 25.6% mainly due to Rs 726.6 Mn of interest bearing borrowings retired during the quarter. Profit after taximproved to Rs 344.7 Mn from Rs 250.1 Mn
recorded in the Q2FY13/14. Net profit margin improved from the previous quarter to 12.9%. Considering Q3 and Q4 being the best quarters for the hotel sector and hence KHL, we expect
this counter to post improved results in the quarters to follow.
LLUB - Hold
The revenue for FY14Q2 experienced a 11.0% YoY growth to Rs.3 Bn while cost of sales increased at a slower momentum of 3.0% YoY to Rs.1.8 Bn, resulting in a growth in the gross
margin by 23.0%. Despite a significant decline in finance income by 63.0% YoY a net profit growth of 23.0% was witnessed due to falling operational expenses. The construction of
Chevron Lankas USD 15 Mn blending plant in Sapuguaskanda is scheduled for completion this year. Despite the healthy quarterly performance, given the long term future prospects, we
would continue to maintain HOLD.
COMB - Hold
NII declined marginally by 0.2% to LKR 6.7Bn QoQ in Q3FY14, whilst bottom line increased 20.9% to LKR 3.3 Bn for the concerned period. Similar to the sector, COMBs other income grew
QoQ by 42.4% in Q3FY14 whilst the gain from financial investments was LKR 1.3 Bn. However, NIMs continued to drop to 3.8% in Q3FY14 in comparison to 4.1% registered in Q2FY14.
Therefore, considering the high trading multiples and short term sector competition, we dont expect the counter to offer a significant upside potential in the short term.

AEL - Buy
AELs top line and bottom line in 2QFY14/15 grew QoQ by 29.2% and 19.2% respectively. The engineering segment had QoQ growth of 37.0% and 25.9% respectively. The growth in
revenue was mainly due to the commencement of the construction of phase two of the Henamulla housing project, with the order book now totaling approximately Rs 101 Bn. Bottom line
growth was a result of AELs order book increase its concentration in high margin water and waste management projects. Sathosa motors saw its revenue decline marginally by 0.5% QoQ
due the drop in the number of Isuzu sales. Despite the 18.1% revenue growth experienced by Access Realities, the bottom line dipped 14.7% QoQ.
LIOC - Hold
LIOCs performance for 2QFY14/15, the bottom line saw a 23.6% YoY decline mainly due to declining gross profit margins, despite revenue increased marginally by 7.6% YoY. With the
recent significant decline in global oil prices we expect improved earnings in the quarters to follow. Therefore we maintain a HOLD.
HNB - Buy
NII declined by 5.0% QoQ to LKR 6.1 Bn for Q3FY14 whilst loan book improved marginally by 4.4% as at Septtember Q3FY14 from Q2FY14. Due to reprising of the portfolio and high
exposure towards high yielding SME, Micro and retail segment, the NIM improved to 4.6% in Q3FY14 compared to 4.1% witnessed in Q2FY14.
Pawning portfolio exposure continued to reduce to 7.4% in Q3FY14 compared to 9.1% in the previous quarter. Despite the drop in top line, the bottom line improved by 7.0% to LKR 2.5Bn
partially due to 72.0% increase in other operating income and collective impairment reversal of LKR 320Mn for the quarter. Considering the robust growth prospects, the counter remains
attractive.
SAMP - Buy
SAMP group net interest income declined by 8.5% to LKR 4.2Bn for Q3FY14 whilst profit for the period increased by 30.2% to LKR 1.1 Bn. Due to prudent management of the pawning
portfolio, the impairment charge for the quarter declined by 55.8% whilst other operating income increased by 128.8%. SAMP continued to reduce pawning exposure to 10.9% in Q3FY14
from 13.2% in Q2FY14 whilst growing the loan book by 5.8%.
Furthermore, the NIM improved significantly to 4.0% by Q3FY14, compared to 2.8% in Q2FY14. Therefore, considering the expected pick up in the credit growth coupled with improving
margins, the stock remains undervalued.

NDB Securities (Pvt) Ltd

Mrs. Prasansani Mendis

Chief Executive Officer

prasansini@ndbs.lk

Sales

Branches

Head Office

CSE

Mr. Gihan R. Cooray

011 2131005

Mr. Sujeewa Athukorala

sujeewa@ndbs.lk

011 3135495

Mr. Jayantha Samarasinghe jayantha@ndbs.lk 011 2131011

Mrs. Shiromi De Silva

shiromi@ndbs.lk

011 2335054

Mr. Aroos Faleel

aroosfaleel@ndbs.lk011 2131012

Kiribathgoda

Mr. Taamara De Silva

taamara@ndbs.lk

011 2131018

Mr. Gayan Pathirana

gayan@ndbs.lk

011 2907515

Mr. Imran Reyal

imran@ndbs.lk

012 2131021

Galle

Mr. Ramesh Anthony

ramesh@ndbs.lk

011 2131023

Mr. Upul Hettiarachchi

upul@ndbs.lk

091 2225447

gihan@ndbs.lk

011 2131010

Mr. Nimal Kumara

kumara@ndbs.lk

011 2131022

Kaluthara

Mr. Sanjaya Prabath

sanjaya@ndbs.lk

011 2131024

Mr. Ranganath Wijethunge

ranganath@ndbs.lk

034 2221589

Mr. Akram Thadani

akram@ndbs.lk

011 2131025

Mr. A A Jeewantha

jeewantha@ndbs.lk

034 2221589

Mr. Ishanka Fernando

ishanka@ndbs.lk

011 2131054

Jaffna

Mr. Harsha Sritharan

harsha@ndbs.lk

011 2131017

Mr. C Padmanathan

chandru@ndbs.lk

021 2224978

Mr. Sajed Sallay

sajed@ndbs.lk

011 2131019

Mr. S. Vibushan

vibusha.@ndbs.lk

021 5671155

Mr. Stefan De Alwis

stefan@ndbs.lk

011 2131015

Ampara

Mr. Lavan Shakya

shakya@ndbs.lk

011 2131028

Mr. Ravi De Mel

ravi@ndbs.lk

063 2224245

mail@ndbs.lk

011 2131000

Operations

Contact Us

NDB Securities (Pvt) Ltd

5th Floor, NDB Building,
40, Nawam Mawatha, Colombo 02

Disclaimer
This document is based on information obtained from sources believed to be reliable, but NDB Securities
(Pvt) Ltd., (NDBS) accepts no responsibility or makes no warranties or representations, express or
implied, as to whether the information provided in this document is accurate, complete or up-to-date.
Furthermore, no representation or warranty is made by NDBS as to the sufficiency, relevance, importance,
appropriateness, completeness or comprehensiveness of the information contained herein for any specific
purpose. Prices, opinions and estimates reflect our judgment on the date of original publication and are
subject to change at any time without notice. NDBS reserves the right to change their opinion at any point
in time as they deem necessary. There is no guarantee that the target price for the stock will be met or that
predicted business results for the company will be met. NDBS accepts no liability whatsoever for any
direct or consequential loss or damage arising from any use of these reports or their contents. References
to tax are based on our understanding of current law and Inland Revenue practices, which may change
from time to time.
Any recommendation contained in this document does not have regard to the specific investment
objectives, financial situation and the particular needs of any specific addressee. This document is for the
information of addressee only and is not to be taken as substitution for the exercise of judgment by
addressee. The information contained in any research report does not constitute an offer to sell securities
or the solicitation of an offer to buy, or recommendation for investment in, any securities within Sri Lanka
or any other jurisdiction. The information in any research report is not intended as financial advice.
Moreover, none of the research reports is intended as a prospectus within the meaning of the applicable
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the distribution of such research report is unlawful. Past results do not guarantee future performance.
NDBS cautions that any forward-looking statements in any research report implied by such words as
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