Al Ahly Pharos

Pre-Trading Thoughts

March 01, 2023 Al Ahly Pharos
Al Ahly Pharos
Pre-Trading Thoughts
Show Notes

Planning Minister: Egypt and Qatar are considering establishing a joint investment fund.

Prime Minister during talks in Doha: Egypt is on its way out of its economic crisis and the currency shortage witnessed over the past year is almost at an end. Qatari investors will be allowed to repatriate profits and pledged not to introduce capital controls on FDI.

Egytpt's CDS rates rose 55 basis points to 1,047, the highest this year, which led Egyptian international bonds to lose 2-3% of their value yesterday.

EFID 4Q22 attributable net profit climbed YoY by 43% to reach EGP343 mn. FY22 bottom-line nearly doubled YoY to reach EGP1,025 mn (+93.9% YoY). EFID is trading at 2023 P/E of 11.2x and an EV/EBITDA of 6.7x.

SUGR FY22 net profit surged to reach EGP850 mn compared to EGP385 mn in FY21, due to demand being favorable, allowing the company to start selling since the start of the season which led to cash flow availability, declining overdrafts, and in turn lower interest expenses, elevating the pressure off the bottom line. Also, the trickling down of healthy revenue growth and gross profitability supported the bottom line. SUGR is trading at a FY22 P/E of 4.4x.  

COMI (FV: EGP69, OW) is now offering monthly 5.25% certificates of deposit in SAR, QAR, AED, USD, and EUR.

CANA (FV: EGP16.50, OW) 4Q22 net profit recorded EGP305 million (+34% y/y,-35% q/q), bringing 2022 net profit to EGP1,040 million (+72% y/y), on the back of: 1) strong top-line growth, 2) strong non-interest income growth on a sequential basis, and 3) lower provisions. Bank needs capital increase. CANA is currently trading at P/E23 of 3.4xand a  P/B23 of 0.3x.

EXPA (FV: EGP14.00, OW) released 4Q22 financial indicators where net profit after taxes recorded EGP 346 million (-7% q/q, +86% y/y). FY22 bottom line recorded a strong EGP1,339 million, 114% higher than the 2021 bottom line. The annual significant increase is attributed to robust margins and lower effective tax rate and potentially lower provisions and OPEX.  Bank needs capital increase. EXPA is currently trading at P/E23 of 6.6x, P/B23 of 0.7x, with an ROAE of 11%. 

BINV aims to inject new investments worth EGP1.0 bn over the coming period, through the implementation of a group of acquisitions in several sectors and part of these deals will be financed from the proceeds of the sale of recent exits.

QIA’s negotiations to acquire a stake in Vodafone Egypt, adding that the two parties would agree during the coming period on an EGP valuation; with an equivalent USD payment. Market speculations suggest a stake size of 30-35%, according to the local press.

EFIH is negotiating with a strategic investor to participate in the capital increase of an EFIH subsidiary, with no further details available. EIFH plans to expand into the microfinance, micro insurance, and consumer finance segments in 2023, according to the local press.

 MPs yesterday voted to slash customs duties and eliminate development fees on imported mobile phone components in a bid to boost manufacturing and localize the industry. 

 “Tally Solutions” launched its digital platform in Egypt, with investments of EGP 500m. The company aims to provide digital services to banks and their customers, such as issuing cards digitally and digitizing services offered by institutions specialized in granting credit and installment facilities.

The Saudi Arab Company for Trade, Production, and Transportation Services launched yesterday a factory for the Chinese "King Long" buses and vehicles production with an investment cost of more than EGP1 bn and initial capacity is 250 buses per annum. 

A steel supply crunch has pushed prices up by EGP2k to reach EGP29-30k, due to manufacturers focusing on exports. 

ATQA released FY22 earnings of EGP234.7 million, 134% higher than the EGP100.4 million recorded in FY21, due to the rise in prices.&nb