Pre-Trading Thoughts

Al Ahly Pharos

Egypt's external debt declined during the third quarter of last year by about USD720 million, to record USD154.98 billion, which is the second consecutive quarterly decline.

Egypt joining the BRICS’ New Development Bank is raising hopes that this might help reduce demand for USD in the economy, as bank members can use their local currencies in bilateral trade.

ORHD achieved stellar 4Q22 sales of EGP3.8 billion, up 28.6% y/y, bringing FY22 sales to ORHD’s highest-ever annual sales of EGP11.1 billion, up 20.7% y/y. Hospitality performance was strong in 4Q22, with occupancy rate in El Gouna reaching 73%, compared to 69% in 4Q21. ORHD is trading at a 2023 P/E of 5.6x and 2023 EV/EBITDA of 3.4x.

ABUK released positive 2Q22/23 net profit after taxes at EGP4,457 million (+60% QoQ, +133% YoY). Net profit of 1H22/23 came in at EGP7,234 million (more than 2x). Weaker local currency compensated for the drop in Urea prices. ABUK is currently trading at FY22/23 EV/EBITDA of 3.7x and P/E of 5.3x.

MICH's net profit in 1H22/23 registered EGP281 million compared to EGP96 million in 1H22/22.

The Minister of Petroleum announced the establishment of the Egyptian Company for Soda Ash with investments of USD500 million and an annual production capacity of 600k tons.

FRA approved extending National Paint's offer to buy Pachin's shares for 60 more days.

CCAP approved a new ESOP equal to 5% of the company's issued shares, over six years.

I Check, for converting cars to work with natural gas, will IPO 25% of its shares in EGX at the end of 2023 or early 2024.

OLFI recorded an attributable net profit of EGP135.8 mn for the quarter, 42.3% higher YoY and a 6.8% decline QoQ. OLFI is due for a valuation review that will bring their FV higher by 10-15% to a range of EGP9.6 to EGP10.0. OLFI’s BoD approved dividends distribution of EGP0.95/share, DY of 9.8%. OLFI is currently trading at a FY23 P/E of 5.5x and an EV/EBITDA of 3.8x.

Chinese “Hisense” is negotiating with the government to manufacture its appliances in Egypt.

ALCN released 2Q22/23 net profit rise of 197% YoY and 69% QoQ to record EGP1.1 billion in 2Q22/23, mainly driven by weaker local currency. ALCN is currently trading at 22/23f P/E of 7.7x and EV/EBITDA of 8.5x.

Maha Capital, the investment arm of Qatar Investment Authority, offers to acquire more than 50% of Port Said Container Handling and Damietta Container Handling.

CLHO shareholders approved cancelling treasury shares (154 million shares, worth EGP77.28 million), bringing the company's paid in capital to EGP722.72 million. CLHO is currently trading at 2023f P/E of 19.5x and EV/EBITDA of 10.0x.

ISPH announced signing a distribution and promotion agreement for the Sandoz over-the-counter (OTC) portfolio of products.

Weekly Commodities Update

Brent, USD/bbl 86.7 -1.1%

Diesel-HSFO Spread, USD/ton 575.2 -8.9%

Egypt Urea, USD/ton 445.0 -11.4%

Polyethylene, USD/ton 1,110.0 0.9%

Polypropylene, USD/ton 1,000.0 0.0%

Steel/Iron Ore Spreads, USD/ton 469.9 1.0%

LME Aluminum Cash Price, USD/ton 2,591.5 0.4%

LME Copper Cash Price, USD/ton 9,242.2 -0.7%

Egyptian Retail Cement, EGP/ton 1,920.0 0.0%

Steam Coal, USD/ton 358.1 2.0%

SMP, USD/MT 2,842.0 0.1%