FFLM

⚡ Flash Summary

First Fidelity Leasing Modaraba reported a loss of Rs. 1.633 million for the year ended June 30, 2025, compared to a loss of Rs. 23.261 million in the previous year. Revenue decreased to Rs. 13.264 million from Rs. 12.157 million. The company’s performance is heavily reliant on the recovery of its major investment in a corporate tower and subsequent deployment of funds into revenue-generating activities. Legal cases are ongoing to recover funds from Enplan (Pvt) Limited, the entity constructing the corporate tower.

📌 Key Takeaways

• 📉 Sustained a loss of Rs. 1.633 million in 2025, improved from Rs. 23.261 million loss in 2024.
• Revenue increased to Rs. 13.264 million in 2025 from Rs. 12.157 million in 2024.📈
• Per certificate loss decreased to Rs. 0.06 in 2025 from Rs. 0.88 in 2024. 📜
• Major investment locked in Enplan (Pvt) Limited’s corporate tower project. 🏗️
• Recovery of Rs 35.0 million Morabaha Finance is currently being re-heard by a tribunal, with the next hearing scheduled for December 2, 2025. 🗓️
• Lahore High Court case for Rs 204.0 million recovery has Enplan’s right to defend closed; a decision favoring Modaraba is expected soon.⚖️
• Likely to recover decretal amounts from auction of mortgaged land and building. 🏦
• One female director included, showing steps towards gender diversity. 👩
• Provident fund value as of June 30, 2025, stood at Rs. 384,006. 💰
• Auditors offered themselves as auditors for the fiscal year ending June 30, 2026. 🧑‍💼
• Management visualizes brighter future prospects upon realization of real estate investments. ✨
• Directors approved financial statements on November 5, 2025. ✅
• Independent auditors gave a qualified opinion due to the matters described in the Basis for Qualified Opinion section of the report. ✍️
• Auditors highlighted short term investments under Murabaha arrangements and Ijarah rentals receivable as a key audit matter. 🔍
• Asset portfolio partially insured via conventional companies, recommended that it should be fully transitioned to Takaful as soon as possible. ☂️

🎯 Investment Thesis

Based on the available information, a HOLD recommendation is warranted. The company has shown some improvement by reducing losses, but it remains unprofitable and heavily reliant on the resolution of legal cases and real estate projects. A BUY recommendation is not justified due to ongoing risks and uncertainties. A SELL recommendation is also not appropriate given the potential for recovery from current legal battles and future real estate investments. Current outlook suggests the Modaraba should continue to improve by managing risk and liquidating investments in progress. The price target will hinge on a successful resolution of its legal battles.

⚡ Flash Summary

First Fidelity Leasing Modaraba (FFLM) announced a corporate briefing session for the financial year 2024-2025 scheduled for November 27, 2025. The announcement, dated November 18, 2025, was made in compliance with PSX notices. A review of historical data shows fluctuating revenue, with a recent dip in 2025, and a net loss. Investors should review the briefing for insights on strategy for future performance and risk management.

📌 Key Takeaways

• 📅 FFLM will hold a corporate briefing session for FY 2024-2025 on November 27, 2025.
• 📜 The announcement complies with PSX notices No. PSX/N-92 and PSX/N-249.
• 📉 Revenue decreased to PKR 13.264 million in 2025 from PKR 24.40 million in 2020.
• 💔 Operating loss before taxation and management fee was PKR 1.467 million in 2025, a significant downturn from a profit of PKR -4.06 million in 2020.
• 🏚️ Fixed assets decreased to PKR 251.906 million in 2025 from PKR 284.4 million in 2020.
• 💸 Total assets decreased to PKR 335.440 million in 2025 from PKR 377.98 million in 2020.
• 📉 Certificate holders’ equity decreased to PKR 297.628 million in 2025 from PKR 335.35 million in 2020.
• 📉 Earning Loss per certificate decreased to PKR -0.06 in 2025 from PKR -0.18 in 2020.
• 📊 Break-up value per certificate decreased to PKR 12.70 in 2025 from PKR 12.73 in 2020.
• 💼 The Modaraba is managed by Fidelity Capital Management (Pvt) Ltd.
• 🏢 The Modaraba’s registered office is in Gulberg II, Lahore.
• 🗓️ FFLM commenced operations on December 5, 1991.
• 📃 The Modaraba is engaged in ijarah, musharika, and morabaha financing.
• 🔒 Business growth faces challenges due to policy uncertainty and political instability.
• 🌱 Management aims to utilize resources in core activities like Ijarah and Morabaha.

🎯 Investment Thesis

Based on the current financials, a HOLD recommendation is appropriate. While the company is taking steps to manage resources, the financials indicate significant challenges. The corporate briefing session may provide further insights. The price target is a hold, with a price target equal to the current market value, but no upside at this time until financials improve.