VIS reaffirms entity ratings of Cyan Limited

January 22, 2025 (MLN): VIS Credit Rating Company Limited (VIS) has reaffirmed entity ratings of Cyan Limited (PSX: CYAN) at ‘A/A1’ (Single A /A One).

Medium to long term rating of ‘A’ denotes good credit quality, and protection factors are adequate.

Risk factors may vary with possible changes in the economy.

Short-term rating of 'A1' indicates a strong likelihood of timely repayment of short-term obligations with excellent liquidity factors.

Outlook on the assigned ratings remains ‘Stable’.

The previous rating action was announced on January 24, 2024.

Cyan Limited, a Dawood Group Company, is a Public Limited Company incorporated in Pakistan on April 23, 1960, under the Companies Act, 1913 (now Companies Act, 2017).

The Company is a subsidiary of Dawood Corporation (Private) Limited (the Parent Company) and is listed on the Pakistan Stock Exchange (PSX).

The registered office of the Company is situated in Karachi.

CYAN is an investment management company with two principal lines of business namely; Investment in listed equities, and Strategic advisory services.

The assigned ratings reflect CYAN's association with the Dawood Group, one of the largest conglomerates in the country.

The group has a diversified presence in key sectors such as fertilizers, PVC, food, power generation, coal mining, LNG storage, and private investments.

CYAN’s management plans to continue its current investment strategy, emphasizing high-dividend-yielding and growth-oriented stocks in the banking, oil & gas exploration, and technology sectors.

With continued structural reforms and anticipated declines in interest rates, there is potential for improved business conditions and sustained equity market performance.

While the Company’s preferred investment sectors are expected to perform well, the portfolio remains vulnerable to market volatility and sector-specific risks.

Any significant shifts in market conditions or economic policy could affect the portfolio’s performance, especially given the limited diversification across asset classes.

The ratings are sensitive to market risk management along with the maintenance of capitalization indicators.

CYAN has achieved satisfactory results, however, navigating market volatility and economic shifts will be key to sustaining the profitability.

Given its conservative financial strategy, CYAN’s liquidity and capitalization profiles are expected to remain stable.

Going forward prudent management of liabilities and sustained profitability will be important for the assigned ratings.

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