External broker reports(aggregated public sources), Topline Securities

Topline Securities

External broker reports(aggregated public sources)

Topline Securities is one of the fastest growing brokerage houses in Pakistan. It has strong equity brokerage, economic / equity research, mutual fund distribution, commodity trading and corporate finance & advisory functions. Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Macroeconomics

<ul><li>As per news inflows, the Ministry of Petroleum has unveiled a comprehensive settlement framework before the Cabinet Committee on Energy (CCOE) to address the mounting circular debt in the oil and gas sector.</li><li>As per the news details, the government plans to resolve liabilities amounting to Rs1.49trn out of the total Rs3.6trn gas sector circular debt.</li><li>To fund this Rs1.49trn settlement plan, the government plans to generate Rs540bn through higher dividend payouts from state-owned E&P giants (OGDC, PPL, and GHPL), while Rs270bn is expected to be recovered via Petroleum Development Levy (PDL) collections.</li></ul>

As per news inflows, the Ministry of Petroleum has unveiled a comprehensive settlement framework before the Cabinet Committee on Energy (CCOE) to address the mounting circular debt in the oil and gas sector.As per the news details, the government plans to resolve liabilities amounting to Rs1.49trn out of the total Rs3.6trn gas sector circular debt.To fund this Rs1.49trn settlement plan, the government plans to generate Rs540bn through higher dividend payouts from state-owned E&P giants (OGDC, PPL, and GHPL), while Rs270bn is expected to be recovered via Petroleum Development Levy (PDL) collections.

Pakistan Economy - Gas Sector Circular Debt Settlement Doing Rounds Again

Equity Bottom-Up

Sui Northern Gas Pipelines Limited / Equity Bottom-Up

Sui Northern Gas Pipelines Limited (SNGP PA)

<ul><li>Management plans to install 300,000 RLNG connections in FY25 and 600,000 connections annually in subsequent years. They noted that the average cost of RLNG is 30% lower than LPG, in addition to being more convenient and safer. As a result, the market response has been strong, with 50,000 RLNG connections already provided within 1.5–2 months.</li><li>Management noted that their payout has decreased temporarily due to the circular debt situation; however, with the resolution of circular debt, they expect the payout ratio to improve. KPMG has been hired as a consultant for the resolution of circular debt, and serious efforts are being made.</li><li>We maintain our BUY stance on SNGPL. The company is currently trading at an FY26E PE of 6.4x</li></ul>

Management plans to install 300,000 RLNG connections in FY25 and 600,000 connections annually in subsequent years. They noted that the average cost of RLNG is 30% lower than LPG, in addition to being more convenient and safer. As a result, the market response has been strong, with 50,000 RLNG connections already provided within 1.5–2 months.Management noted that their payout has decreased temporarily due to the circular debt situation; however, with the resolution of circular debt, they expect the payout ratio to improve. KPMG has been hired as a consultant for the resolution of circular debt, and serious efforts are being made.We maintain our BUY stance on SNGPL. The company is currently trading at an FY26E PE of 6.4x

Topline Flash Note: Sui Northern Gas Pipeline (SNGP): Corporate Briefing Key Takeaways

Cross Asset Strategy

<ul><li>Background of Iran sanctions: Although US economic sanctions on Iran date back to the 1979 Iranian Revolution, the United Nations passed a resolution imposing sanctions in 2006.</li><li>Pakistan Trade balance with Iran peaked in FY10: Prior to the tightening of international sanctions on Iran in 2012, bilateral trade between Pakistan and Iran was significantly higher, with total trade peaking over US$1.2bn in FY10.</li><li>Way forward: Pakistan and Iran have committed to take the potential trade flows of US$10bn through the operationalization of Special Economic Zones (SEZs) at the border region and greater economic engagement.</li></ul>

Background of Iran sanctions: Although US economic sanctions on Iran date back to the 1979 Iranian Revolution, the United Nations passed a resolution imposing sanctions in 2006.Pakistan Trade balance with Iran peaked in FY10: Prior to the tightening of international sanctions on Iran in 2012, bilateral trade between Pakistan and Iran was significantly higher, with total trade peaking over US$1.2bn in FY10.Way forward: Pakistan and Iran have committed to take the potential trade flows of US$10bn through the operationalization of Special Economic Zones (SEZs) at the border region and greater economic engagement.

Pakistan Strategy: What If Iran Sanctions Are Lifted; Implications For Pakistan From A Historical Perspective

Thematic (Sector/Industry)

<ul><li>As per our channel checks and based on the invitation notice circulating on social media, the signing ceremony of the financing facility agreement for circular debt resolution is scheduled for Wednesday (Tomorrow), 24th September 2025, at the Prime Minister’s Office.</li><li>Previously, the government finalized a plan to borrow Rs1.25-1.275 trillion from banks to retire the power sector’s circular debt.</li><li>News flow suggest this Rs1.25tn will include restructuring of existing debt of Rs683bn held in balance sheet of Power Holding Limited (PHL) at KIBOR plus 2%, as per our channel checks and news reports.</li></ul>

As per our channel checks and based on the invitation notice circulating on social media, the signing ceremony of the financing facility agreement for circular debt resolution is scheduled for Wednesday (Tomorrow), 24th September 2025, at the Prime Minister’s Office.Previously, the government finalized a plan to borrow Rs1.25-1.275 trillion from banks to retire the power sector’s circular debt.News flow suggest this Rs1.25tn will include restructuring of existing debt of Rs683bn held in balance sheet of Power Holding Limited (PHL) at KIBOR plus 2%, as per our channel checks and news reports.

Topline Flash Note: Pakistan Power - Power Circular Debt: Financing Facility Signing Ceremony Will Take Place Tomorrow

<ul><li>MSCI released an update on its Quarterly Index Review, notifying of 3 additions for Pakistan in the MSCI Main Frontier Market Index.</li><li>All changes will be implemented as of the close of Feb 29, 2024.</li><li>The new additions to the MSCI Main Frontier Market include Bank AL Habib (BAHL), Interloop (ILP), and Sui Northern Gas Pipelines (SNGP).</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

MSCI released an update on its Quarterly Index Review, notifying of 3 additions for Pakistan in the MSCI Main Frontier Market Index.All changes will be implemented as of the close of Feb 29, 2024.The new additions to the MSCI Main Frontier Market include Bank AL Habib (BAHL), Interloop (ILP), and Sui Northern Gas Pipelines (SNGP).Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

MSCI Quarterly Index Review: 3 additions to MSCI Pakistan Frontier Main Index

Pakistan

SNGPL is the largest integrated gas company serving more than 7.22 million consumers in North Central Pakistan through an extensive network in Punjab, Khyber Pakhtunkhwa and Azad Jammu & Kashmir.

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Sui Northern Gas Pipelines Limited (SNGP PA)

Pakistan Economy - Gas Sector Circular Debt Settlement Doing Rounds Again

As per news inflows, the Ministry of Petroleum has unveiled a comprehensive settlement framework before the Cabinet Committee on Energy (CCOE) to...

Topline Securities

Topline Flash Note: Sui Northern Gas Pipeline (SNGP): Corporate Briefing Key Takeaways

Management plans to install 300,000 RLNG connections in FY25 and 600,000 connections annually in subsequent years. They noted that the average...

Topline Securities

Pakistan Strategy: What If Iran Sanctions Are Lifted; Implications For Pakistan From A Historical Perspective

Background of Iran sanctions: Although US economic sanctions on Iran date back to the 1979 Iranian Revolution, the United Nations passed a...

Topline Securities

Topline Flash Note: Pakistan Power - Power Circular Debt: Financing Facility Signing Ceremony Will Take Place Tomorrow

As per our channel checks and based on the invitation notice circulating on social media, the signing ceremony of the financing facility agreement...

Topline Securities

MSCI Quarterly Index Review: 3 additions to MSCI Pakistan Frontier Main Index

MSCI released an update on its Quarterly Index Review, notifying of 3 additions for Pakistan in the MSCI Main Frontier Market Index. All changes...

Topline Securities

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