Hub Power sells 50% stake in Mega Motor Company

Pakistan's Hub Power Company Ltd (HUBC) has announced the sale of a 50% stake in Mega Motor Company to Mega Conglomerate (Private) Ltd (MCPL).

Hub Power Holding, a wholly-owned subsidiary of HUBC, entered into a shareholders agreement with MCPL on Thursday. Following this transaction, HUBC will maintain a 50% ownership in Mega Motor, as reported in a recent bourse filing.

MPCL, a prominent holding company, has diversified investments across various sectors in Pakistan, including energy, real estate, dairy, communications, and aviation.

Mega Motor has secured a strategic supply and manufacturing agreement, along with a technical license agreement, with BYD Auto Industry, the world’s largest electric vehicle manufacturer.

In a significant move to introduce BYD vehicles in Pakistan, Mega Motor finalized a distribution agreement in June.

BYD, a renowned Chinese multinational, reported a remarkable sales performance in 2023 with 1.57 million battery electric vehicles sold, marking a 73% year-over-year increase. Additionally, BYD sold 1.44 million plug-in hybrid vehicles during the same period.

Expanding its global footprint, BYD has also revealed plans to establish a car production plant in Pakistan. The partnership with Mega Motor will see the introduction of three new models in the local market.

A report by Arif Habib Limited suggests that, assuming an average price of PKR 11.1 million per unit and 10% net margins, HUBC’s earnings could see a significant impact, ranging from PKR 2.1 per share to PKR 4.3 per share, with expected sales volumes of 5,000 to 10,000 cars annually.

Furthermore, BYD has announced plans to open three flagship stores and experience centers in Karachi, Lahore, and Islamabad. The company aims to launch two SUV models and a sedan in Pakistan by the fourth quarter of this year.