Al Ahly Pharos

Pre-Trading Thoughts

March 07, 2023 Al Ahly Pharos
Al Ahly Pharos
Pre-Trading Thoughts
Show Notes

The SFE’s pre-IPO fund is set to offer stakes in 2-3 state-owned companies to strategic investors or via public share sales in April. Stake sales in 11 of the 32 companies in the government’s privatization program will be managed through the pre-IPO fund.

Strategic investors from the Gulf could spend USD4 billion to buy into local firms in a first phase of stake sales. Qatari investors are eyeing logistics, containers, fertilizers, and export sectors.

The government will make an announcement on stake sales in the seven hotels it bundled into one company ahead of a sale, within days. The company will offer a 20% stake to strategic investors, followed by an offering of 5% on EGX.

The Ministry of Finance is planning to sell a 10% of its stake (80%) in Telecom Egypt.

ESRS raised the price of rebars by EGP2,300/ton to EGP29,285 (including VAT) as of March 7, 2023, 8.5% higher than the EGP26,985/ton in mid-January 2023.

EGAL (FV:EGP39.53, EW) released its budget for FY2023/24 targeting net profit after tax of EGP3.51 billion vs. EGP2.50 billion recorded in FY2021/22 and an estimated figure of EGP3.45 billion in FY2022/23. Revenues are targeted to reach EGP26.6 billion, 184% higher than the EGP14.5 billion recorded in FY2021/22 and 130% higher than the estimated revenues of EGP20.5 billion in FY2022/23. The budget is planned on average an average exchange rate of EGP30/USD, with exports capturing 62% of total sales.

PACH issued preliminary 2Q22/23 results. Net profit after taxes amounted to EGP11 million, compared to EGP8 million in 1Q22/23 and a net loss of EGP14.48 million in 2Q21/22. During 1H22/23, bottom recorded a net profit of EGP20 million, compared to a net loss of EGP13 million in 1H21/22. PACH is trading at 2023f P/E of 19.24x and EV/EBITDA of 24.8x.

The FRA will allow companies to sell bonds and sukuk without first acquiring a credit rating, making it less expensive for firms to raise capital for growth and development.

ARAB (FV: EGP0.65, OW) reported 4Q22 net loss of EGP37.0 million, compared to 4Q21 net profit of EGP2.0 million, bringing FY22 net loss to EGP18.0 million, compared to FY21 net profit of EGP93.0 million. The Board proposed the distribution of 1:10 stock dividends. ARAB also received an offer from a company interested in buying ARAB's entire stake in its subsidiary, Amer Syria, for USD18.0 million.

ELSH Board proposed cash dividends of EGP0.05/share as an initial distribution (DY of 0.7%).

According to local media, the Prime Minister discussed ways to boost yacht tourism with TMGH.

Al Amal Company, the local agent for Lada, BYD, and King Long, will stop their production by the middle of March due to the complete depletion of their inventory and production components, and the inability to obtain new ones.