Al Ahly Pharos

Pre-Trading Thoughts

February 07, 2024 Al Ahly Pharos
Al Ahly Pharos
Pre-Trading Thoughts
Show Notes

*Key news articles for today*

Planning Minister and Sovereign Fund of Egypt (SFE) Chair Hala El Said said that investors have 48 hours to submit their final bids for Wataniya.

The government will finalize the 580-MW Gabal El Zeit wind farm stake sale before the end of March.

The government is studying increasing the number of floors allowed for hotel buildings to expand the number of hotel rooms and units. The government's plan is to increase the number of tourists to 30 million by 2028. Thus, it needs to increase the number of hotel rooms from 220k currently to 400k rooms.

The Ministry of Finance is planning to increase the tax exemption limit on intercompany transactions from EGP8 million to EGP50 million. 

Gulf of Suez Petroleum Company (GUPCO) targets investing USD586 million during FY24/25 and to increase its daily production rate from 66k bbl to 72k bbl of crude oil per day. The company plans to dig 12 wells.

HSBC Bank Egypt has signed an agreement with GAFI to attract more foreign direct investments to Egypt.

TMGH (FV: EGP42.95, OW) achieved FY23 sales of EGP140.0 billion, up 321.7% y/y. It is not clear if this EGP140.0 billion figure includes sales made for non-TMGH entities for which TMGH receives commissions.

ORHD (FV: EGP20.38, OW) achieved FY23 sales of EGP18.6 billion, up 67.4% y/y.

OCDI (FV: EGP37.56, OW) reported solid 4Q23 sales of EGP10.5 billion, up 10.2% y/y and down 10.1% q/q, bringing FY23 sales up 42.1% y/y to EGP30.3 billion. Sales exceeded our FY23 sales expectation of EGP24.8 billion. Our EGP37.56/share valuation conservatively assumes a FY24 sales projection of EGP27.3 billion, which, in light of actual FY23 sales of EGP30.3 billion, we expect to be exceeded, especially since we generally expect real estate sales to grow y/y in FY24, fueled by the current macro environment prompting people to resort to real estate as a store of wealth. We maintain our Overweight recommendation of OCDI based on our FV of EGP37.56/share.

EMFD (FV: EGP5.66, OW) achieved FY23 sales of EGP30.2 billion, up 67.2% y/y.

HELI (FV: EGP18.84, OW) plans to invest EGP3.0-4.0 billion in New Heliopolis over the next five years.

EFIC released 4Q23 unaudited standalone results posting an increase of 77% YoY (+982% QoQ) in net profit to EGP347.9 million. So that FY23 net income increased by 19% YoY to EGP582 million. EFIC is currently trading at 2024e PE of 6.1x.

SKPC's BoD approved a cash dividend distribution of EGP1/share, implying a dividend yield of 2.7%. In addition, it will distribute bonus shares at a ratio of 1:5. The BoD also approved the payment of USD180k towards the capital increase of the Egyptian Bioethanol Company, increasing the company's share to USD3.18 million which is 7.5% of the total issued capital.

German conglomerate ThyssenKrupp will help revamp state-owned Delta Fertilizers and restart operations at its ammonia and urea factories under an agreement inked between the two. The plan is to boost production at both factories to their full capacity of 1.4k tons a day.

ORAS (FV: EGP233.65, OW) declared an interim cash dividend of USD0.19/share (EGP5.88/share) for 9M23. Distribution date is February 22, 2024. Record date is February 15, 2024. This implies a dividend yield of 3.0% and payout ratio of 18.2%. Shareholders on the EGX will be paid in EGP at the USD/EGP exchange rate announced by the CBE on February 5, 2024.

Contact Financial Holding is considering launching its operations in the UAE, mainly to serve Egyptian expats there.

Samsung wants to increase its annual exports of locally made electronic devices, that currently amount to USD 700 mn, by 50% in the coming period.