⚡ Flash Summary

First National Equities Limited (FNEL) reported a loss after tax of PKR 78.68 million for the year ended June 30, 2025, a significant decrease from the profit of PKR 497.90 million in 2019. Gross revenue decreased substantially to PKR 19.75 million compared to PKR 23.48 million in 2024 and PKR 6.75 million in 2019. The company’s operations were temporarily affected by transitioning its license framework, which involved a trading closure in September 2024 and a resumption in June 2025. Despite the losses, FNEL is pursuing strategic growth opportunities, including investments in its subsidiary and diversification into the pharmaceutical sector.

📌 Key Takeaways

• 📉 FNEL reported a loss after tax of PKR 78.68 million in 2025, a sharp reversal from a profit of PKR 497.90 million in 2019.
• 📉 Gross revenue significantly decreased to PKR 19.75 million in 2025 from PKR 23.48 million in 2024.
• ⚠️ Operating revenues decreased to PKR 8.56 million in 2025 from PKR 33.92 million in 2024.
• ⛔️ Administrative expenses remained high at PKR 41.77 million despite reduced revenue.
• 🏦 The company is transitioning its license framework, causing a trading halt in September 2024.
• ✅ Operations resumed in June 2025 under a trading-only broker status.
• 💰 FNEL is pursuing strategic growth opportunities, including investments in its subsidiary FNE Developments.
• 💊 The company intends to diversify into the pharmaceutical sector, potentially investing up to PKR 500 million.
• 🏢 The KSE-100 Index closed June 2025 at a historic high, but FNEL experienced volatility.
• 💼 The company divested its 20% equity stake in Kingbhai Digisol for PKR 280 million.
• 🚫 Auditors highlight non-compliance with corporate governance regulations, including vacant key positions.
• Chairman mentions FY2026 GDP growth of 3.6%, an improvement compared to -0.4% the year before

🎯 Investment Thesis

Based on the current financial performance and highlighted risks, a SELL recommendation is appropriate for FNEL. The company faces significant challenges related to the temporary operations closure. A turnaround is uncertain, and the lack of profitability makes investment unattractive. Even though the divestiture from Digisol could eventually have a positive impact, the investment comes with a high amount of uncertainty in the near term. The risks associated with the regulatory compliance and operational efficiency remain significant