Pre-Trading Thoughts

The IMF’s first and second reviews of Egypt’s USD3 billion loan program are in their final stages and are expected to be completed in a few short weeks, according to the IMF Managing Director. 

MPs are meeting today to discuss and vote on the EGP180 billion social support package announced last week by the presidency. 

The House will also discuss and vote on a number of agreements that include:

• A EUR500 million grant from the European Investment Bank to support the Environment Ministry's Sustainable Green Industry project.
• A EUR80 million grant from Germany to support the Environment Ministry's solid waste management program, build 25 technological schools and centers, and support the central bank’s financial risk management program.

60% of ships passing through the Suez Canal have diverted to South Africa by circumnavigating Africa. The tonnage passing through the Suez Canal decreased during the first 6 days of February to 12.8 million tons, compared to about 18.9 million tons during the same period in January, a monthly decrease of 32.5%. 

Minister of Finance stated that tax revenue collection rates increased by 42% during the first 7 months of the current fiscal year.

The New Urban Communities Authority signed an MoU with the UK to form a task force that will support Egypt’s efforts to build sustainable infrastructure and cities.

Visa signed an MoU with the Egyptian Banks Company (EBC) to introduce new features in a bid to facilitate remittance transfers by Egyptian expats.

COMI (FV: EGP100.00, OW) recorded a strong set of results where 4Q23 net profit post-minority interest recorded EGP7,229 million (-13% q/q, +83% y/y), bringing FY23 bottom line to EGP29,635 million (+84% y/y, and +6% higher than Al Ahly Pharos estimates of of EGP27,903 million). The stock is trading at P/E 2024 of 7.2x and P/B 2024 of 2.2x.

Philip Morris has hiked the price of cigarettes by up to 18%, the company said in a press release yesterday. It also raised the price of its heated cigarettes range by 14%.

EAST is looking to secure USD400 million in credit facilities through local banks to be used as LCs for the company's suppliers to import the needed raw materials. The company is also looking to secure USD200 million through foreign banks as letters of guarantee.

PHAR announced that its revenues exceeded EGP5 billion in 2023, where initial estimates indicate exports revenues of USD54 million, representing around 30% of Egypt’s pharmaceutical exports to Africa. The company expects EIPICO 3 to begin trial operation in 2Q24. 

CPCI released 2Q23/24 financial indicators. Net profit surged by 443.8% YoY and 3.7% QoQ to record EGP61.3 million in 2Q23/24. Net profit recorded EGP120.5 million in 1H23/24 (+141% YoY). CPCI is currently trading at 23/24f P/E of 6.8x and EV/EBITDA of 7.7x.

ALCN released 2Q23/24 amended financial indicators. Net income recorded EGP1.2 billion in 2Q23/24 (+7.2% YoY, +23.9% QoQ). Net income recorded EGP2.2 billion in 1H23/24 (+21.9% YoY). ALCN is currently trading at 23/24f P/E of 19.7x and EV/EBITDA of 19.2x.

ALCN’s BoD approved FY22/23 dividends of EGP2.4/share, implying payout ratio of 81.5% and dividend yield of 4.1%.

Regarding HELI’s (FV: EGP18.84, OW) plan to offer 84 residential units in New Heliopolis and Sheraton for sale through auction, the company is holding the auction on 2 March 2024.

Acwa Power has begun conducting feasibility studies to develop its large-scale, two-phase green hydrogen and ammonia project in the Suez Canal Economic Zone (SCZone).

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