AHL Research has released a brief report on Kohat Cement Co Ltd, highlighting the company’s entry into the real estate business and its stock split. According to a notice from the Pakistan Stock Exchange (PSX), the Board of Directors of Kohat Cement (KOHC) has approved the establishment of a wholly-owned subsidiary, Ultra Properties (Private) Ltd, which will focus on real estate development, marketing, and rental operations.
This initiative marks the company’s official entry into the property development sector, pending the necessary regulatory approvals. As part of this strategy, Kohat Cement plans to lease one of its existing investment properties to the newly formed subsidiary.
The subsidiary is expected to develop multi-story commercial buildings designed to generate rental income. To support this endeavour, the Board has authorised an investment of up to PKR750m (US$2.6m), which may be provided in the form of equity and/or interest-bearing loans.
Stock split
The Board has also approved a stock split, reducing the par value of the company’s shares from PKR10 per share to PKR2 per share, resulting in a 5:1 split. This move is expected to improve share liquidity.
AHL Research is optimistic about Kohat Cement’s performance, citing several positive factors, including an anticipated recovery in local cement demand, the upcoming addition of a coal-based captive power plant that is likely to enhance energy efficiency and profit margins, and KOHC’s cost advantage stemming from lower raw material costs compared to manufacturers based in Punjab.
by Abdul Rab Siddiqi, Pakistan
