Al Ahly Pharos

Pre-Trading Thoughts

May 23, 2023 Al Ahly Pharos
Al Ahly Pharos
Pre-Trading Thoughts
Show Notes

Oman and the Sovereign Fund of Egypt are looking into establishing a joint investment fund, which would participate in the state offering program and invest in projects across Egypt, with plans to inject USD5 billion in investments in Egypt over the next 3 years.

Egypt's exports of liquefied natural gas recorded about 600 thousand tons during the month of April 2023, bringing the total exports during the first 4 months of 2023 to 2.5 million tons (c.USD1 bn).

Egypt is getting a EUR60 mn facility from the EU and the French Development Agency to help the government expand its wheat silos' capacity by 420k tons or a 12% increase on the current 3.5 mn tons capacity. 

The European Investment Bank (EIB) aims to provide financing for the electrical interconnection project between Egypt and Saudi Arabia.

The yield on Egypt's sovereign bonds due in June 2025 fell to 18.799% at the end of trading on Friday, compared to 24.146% on May 16, while the yield on bonds due in November 2023 decreased to 10.8%, after it had exceeded 20% two weeks ago.

Suez Canal Economic Zone (SCZone) delegation is in China and Hong Kong this week to meet with local business leaders and investors in a bid to raise interest in investment opportunities in Egypt. 

The General Authority for Investment and Free Zones has received applications from 20 Arab and foreign companies to obtain a golden license to set up projects, and it is expected to decide on them by the end of next June.

The Egyptian Tax Authority stipulated joining the electronic invoice system, in order to deal with the Customs Authority starting from July 1, 2023.

The government is studying adding AMOC to its privatization program list. The list could also include offering an additional stake in EXPA, ABUK, and SKPC. (Al-Mal)

EXPA 1Q23 consolidated bottom line recorded a strong EGP 564 million (+87% y/y), supported by: 1) strong margins, and 2) robust fees and commissions and gains from FX deals, 3) lower provisions (-36% q/q) and lower effective tax rate (-1.0 pps q/q). We updated out FV of EXPA to 20.00/ share. EXPA is trading at P/E23 of 4.8x and P/B23 of 0.7x. 

MCQE reported 1Q23 consolidated financial results with attributable net earnings of EGP66 million in 1Q23 (+10% YoY, +94% QoQ). Solid bottom line was triggered by revenue growth and healthy levels of operating margins despite the surging financing costs post the cancellation of the CBE’s 8% industry-support initiative. Stock dividend distribution at a ratio of 1:3 financed from the company’s retained earnings. MCQE is trading at FY23e P/E of 4.6x and EV/EBITDA of 3.5x.

AXPH released 9M22/23 financial results. The bottom line recorded EG108.2 million in 9M22/23 (+34.7% YoY). On a quarterly basis (3Q22/23), net profit recorded EGP35.5million in 3Q22/23 (+53.1% YoY). AXPH is currently trading at FY22/23 P/E of 4.7x and EV/EBITDA of 2.9x.

Head of the Federation of Egyptian Industries’ pharma division stated that the pharma industry’s reserves of raw materials are currently enough for 2 months, down from the ideal 3-4 months, due to low availability of foreign currency.