The number of mobile phones manufactured and assembled in Pakistan clocked in at 13.1 million units in the first five months of calendar year (5CY24), a whopping increase of 168% when compared with the same period of the previous year, said brokerage house Topline Securities, citing data by the Pakistan Telecommunication Authority (PTA). As per the latest data, local mobile companies have manufactured/assembled 2.23 million units in May 2024, an increase of over 55% as compared to numbers achieved in May 2023. “This improvement is mainly led by import restrictions last year coupled with gradual economic recovery,” said Topline Securities. As per the brokerage house, Pakistan now fulfils 95% of its mobile phone demand through local manufacturing/assembly, compared to the last five-year (2019-2023) average of 67% and 8-year (2016-2023) average of 47%. “As per channel check, all mobile brands except iPhones are now being manufactured/assembled in Pakistan,” said Topline Securities. As per the brokerage house, Pakistan has undergone a significant shift from imported mobile phones to local manufacturing and assembly in recent years. “This transformation followed the government’s announcement of a local mobile manufacturing policy in 2020 aimed at encouraging international mobile players to establish assembly plants in Pakistan. “The shift towards locally manufactured/assembled mobile phones is also driven by their affordability, offering a price gap of 15-20% compared to imported mobile phones of the same build quality,” said Topline. Back in 2016, 0.29 million units of mobile phones, which makes up only 1%, were assembled locally in Pakistan, while the remaining 99% or 21.36 million units were imported. “However, in 5MCY24, Pakistan imported only 5% i.e. 0.75 million units of its mobile phones, while local manufacturing/assembly accounted for 95% i.e. 13.08 million units,” read the report. As per Topline, during 5MCY24, 62% or 8.1 million units of smartphones were assembled, while the remaining 38% i.e. 4.98 million units were 2G phones. The brokerage house was of the view that based on the current monthly run rate and the recent imposition of an 18% sales tax on all mobile phones in Budget FY25, total mobile phone demand may reach 30- 35 million units in 2024 against 22.9 million units sold in 2023. “Within the listed sector, Air Link Communication (AIRLINK) stands out as the major beneficiary of the expanding market size and growing share of local mobile phones. Air Link is currently trading at an FY24E PE of 8.4x and FY25F PE of 5.4x. “Similarly, 7% of Lucky Cement’s (LUCK) consolidated revenue comes from its mobile business, which will also benefit from the rising local demand for mobile phones. The LUCK is trading at an FY24E PE of 4.1x and FY25F PE of 3.6x,” Topline added.