Pre-Trading Thoughts

Al Ahly Pharos

Egypt, the UAE, Jordan, and Bahrain signed agreements to establish nine joint industrial projects at an investment cost of USD 2 bn.

AUTO consolidated attributable net income in 4Q22 amounted to EGP8,714 mn compared to EGP413 mn in 4Q2. FY22 bottom-line recorded EGP9,985 mn compared to EGP1,408 mn recorded in FY21. The sharp incline was backed by the MNT-Halan divestment (EGP8.2 billion). We have upgraded our FV for AUTO earlier to EGP7.56/share with GB Capital 78.8% of our FV. AUTO is currently trading at a 2023 P/E of 2.4x and an EV/EBITDA of 3.7x.

MCQE reported 4Q22 attributable net earnings recording EGP33 million (-15% YoY, +3.5-folds QoQ), bringing FY22 attributable earnings to EGP96 million (-34% YoY). Top-line surged with prices, but operating margins shrank. DPS is EGP0.5/share (DY 2.2%) in addition to a stock dividend of 1:3. MCQE is trading at FY23e P/E of 15.9x, EV/EBITDA of 6.1x and EV/ton of EGP627.

MBSC reported FY22 losses of EGP146 million representing almost half the legal compensation related to the contractual dispute with CCAP’s subsidiary ASEC. Net cash position inched up to EGP1.2 billion on December 31, 2022, representing c. 50% of the stock’s market cap. MBSC is currently trading at FY23e P/E of 29.5x, EV/EBITDA of 9.4x, and EV/ton of EGP430.

We upgrade our fair value for ECAP to EGP17.23/share with a valuation gap of 19.0%, with Equalweight. ECAP is currently trading at 2023f P/E of 6.2x and EV/EBITDA of 3.4x.

MNHD achieved solid 4Q22 sales of EGP3.7 billion, up 325.1% y/y, bringing FY22 sales to EGP11.2 billion, up 224.4% y/y. Net profit in 4Q22 reached EGP202.4 million, up 517.1% y/y, bringing FY22 net profit up 160.5% y/y to EGP736.7 million. DPS is EGP0.15/share with DY of 4.3%. The Board also approved a EGP35.0 million capital increase to fund the company’s ESOP.

The Real Estate Development Chamber is calling for fixing the interest rate on land liability payments and including real estate development in the 11.0% subsidized interest rate program.

MFPC standalone net profit after taxes in FY22 amounted to EGP3.835 billion which is up by 148% YoY. MFPC is trading at 2023 consolidated P/E of 5.3x and EV/EBITDA of 3.0x.

MICH issued the net profit figures for January 2023, attaining a net profit of EGP68 million compared to EGP15 million in January 2022. MICH is trading at 2023 P/E of 3.5x.

EFIH signed a cooperation agreement with “Giesecke+Devrient G+D”, specialized in banking cards and electronic payment solutions, to extend their cooperation on card issuance and digital payment services in Egypt.

Around 70 pharmaceutical companies submitted repricing requests to the Egyptian Drug Authority.

Norwegian renewable energy developer Scatec proposed a new electricity (3GW) interconnection project between Egypt and Europe.

Consumer financing in Egypt hit EGP26.8 billion in 11M2022, up from EGP15.2 billion in 11M2021.

Aman Holding intends to expand in new markets, including Saudi Arabia, and is considering issuing Sukuk at a value of EGP500 million, in addition to securing new banking facilities worth EGP4 billion.

Weekly Commodities Update

Brent, USD/bbl 83.2 0.2%

Steel/Iron Ore Spreads, USD/ton 487.6 5.0%

Diesel-HSFO Spread, USD/ton 438.0 4.1%

Egypt Urea, USD/ton 391.0 2.9%

LME Aluminum Cash Price, USD/ton 2,285.0 -2.6%

Polyethylene, USD/ton 1,180.0 0.9%

Polypropylene, USD/ton 1,055.0 -0.5%

Egyptian Retail Cement, EGP/ton 1,883.0