PACRA Maintains the Entity Ratings of Select Technologies (Pvt.) Limited

Select Technologies (Private) Limited (hereafter referred to as ‘SELECT’ or ‘the Company’) is a wholly owned subsidiary of Air Link Communication Limited. The Company specializes in manufacturing, assembling, and selling smartphones and related accessories in Pakistan under renowned mobile phone brands. SELECT has established itself as a key player in Pakistan’s technology sector, backed by a sustainable business model and strong support from its parent company. In 2022, SELECT partnered with Xiaomi Inc., becoming its official assembly partner in Pakistan. This collaboration resulted in the creation of a state-of-the-art assembly line in Lahore, with a current capacity of 2.7mln units per annum in a single shift. Xiaomi remains one of the world’s leading smartphone manufacturers, known for delivering high-quality products at competitive prices. In 2024, Xiaomi shipped over 169mln smartphone units globally (CY23: 153mln), capturing ~14% share of the global smartphone market. In China, Xiaomi holds the third-largest market share (15.7%), following Vivo (18%) and Huawei (16.3%). The strategic partnership between Xiaomi and SELECT is designed to drive revenue growth through efficient supply chain management, a competitive pricing strategy, and an expanding market presence in Pakistan’s telecom sector. The local industry is advancing steadily, fueled by expanding network coverage, a wide array of mobile devices, increasing technological demand, and the widespread adoption of mobile phones among Pakistan’s ~225mln population. The market is rapidly shifting from feature phones to smartphones. Moreover, the local assembly industry has experienced substantial growth, increasing from 11.7mln units in CY19 to a record 31.8mln units in CY24 (CY23: 21.3 million). This surge has been supported by the implementation of the Device Identification Registration and Blocking System (DIRBS), which has curtailed illegal imports, fostering domestic production and exports. According to the Pakistan Telecommunication Authority's (PTA) latest statistics, SELECT holds ~13% market share of the local smartphone assembly and ~8% of total mobile devices manufactured (including 2G). During 1HFY25, the Company’s revenue declined by ~13.7% to PKR 27.7bln compared to the same period last year, mainly due to a temporary dip in demand caused by higher taxes. However, as per the management’s representation market price adjustments are now assimilated, and volumes are once again rising. SELECT operates with a leveraged capital structure, primarily relying on short-term borrowings to fulfill the cash margin requirements for opening LCs for the import of mobile parts and components. The Company’s financial risk profile is characterized by an efficient working capital cycle, strong coverage ratios, and robust cash flows.
The rating depends on the Company’s ability to sustain its relative position amidst changing industry environment and its sustainable business partnership with global brand. With topline growth, prudent financial discipline - particularly in working capital structure and leverage, will remain imperative.

About the Entity
Select Technologies (Pvt.) Limited was incorporated in Pakistan on October 13th, 2021, as a private limited entity. Its registered head office is located at Quaid-e-Azam Industrial Area Kot Lakhpat, Lahore, Pakistan. The Company’s ~99.999% financial stake rests with AIRLINK (parent company). The board of SELECT comprises five members, including Mr. Muzzaffar Hayat Paracha (Group CEO / Director) and Mr. Adnan Aftab (CEO of SELECT), both individuals are associated with the group for over two decades and hold related industry experience. They are being assisted by a qualified team.