Pre-Trading Thoughts

ORHD| A Dollar-Denominated Asset That Is Still Cheap. ORHD offers solid sales, exposure to the revival in tourism, diversified revenue mix (real estate, hotels, town management), sizable recurring income (hotels, town management), large residual land bank (around 25.0 million sqm), unique product offering (El Gouna, Makadi Heights, Taba Heights), solid development track record, and the shortest installment schedule and highest selling price among sector coverage offered in El Gouna. The stock is a key beneficiary of EGP depreciation on the asset side given land and units in El Gouna are priced in USD.  ORHD’s market cap/sqm is currently at USD11.4/sqm which is heavily discounted compared to historical land transaction sales prices of USD120-375/sqm in El Gouna. At the current market price, the stock offers 104.5% upside potential to our FV of EGP15.32/share.ORHD is trading at a P/E 2023 of ​4.7x and EV/EBITDA 2023 of ​2.9x.

Imports worth more than USD 1.5 bn were cleared from our ports between 18-23 January.

Banque Misr and the National Bank of Egypt are cancelling the offering of the one-year, 25% certificates of deposit after the end of January. 

Minister of Electricity and Renewable Energy decided to extend the implementation of the decision not to implement an increase in electricity prices for an additional 6 months, ending on June 30, 2023. 

The Public Authority for Industrial Development approved granting a free grace period of an additional six months to industrial projects that exceeded the implementation timetable, while exempting them from 50% of delay fines for previous periods.

Sovereign Fund of Egypt revealed that 7 foreign consortia are examining 7 state-owned hotels, with the aim of increasing their capital, to acquire a 30% stake.

AMOC released impressive 2Q22/23 financial indicators showing a 240% YoY and 52% QoQ growth in net profit before minority interest, recording EGP605 million. AMOC is trading at FY22/23 P/E of 4.9x and EV/EBITDA of 4.5x. At current FX assumptions, stock should yield a FV of EGP10.50/share.

Mopco has appointed Mohamed El Sayed Sobhy Mansour Amer its new chairman and managing director.

The Sovereign Fund, through its sub-fund for health services and pharmaceutical industries, signed two agreements to invest EGP 2 billion, in partnership with B Investments Holding Company, in the field of specialized health care services, and pharmaceutical distribution and trade services in Egypt.

ORAS declared a second cash dividend distribution of EGP5.54/share for FY2021, bringing the year’s dividend yield to 10.0%. The dividend is to be distributed on February 9, 2023 for shareholders of record on February 2, 2023.

The Ministry of Electricity and Renewable Energy has taken the first steps to implement the electrical supply project for the El Alamein-Sokhna high-speed electric train project, at a cost of nearly EGP10 billion. 

ADCI released 2Q22/23 initial indicators. Bottom-line came in at EGP25.5 million in 2Q22/23 (+7.3% YoY, -7.9% QoQ), bottom-line recorded EGP53.2 million in 1H22/23 (+7.5% YoY). ADCI is currently trading at FY22/23f P/E of 5.9x and EV/EBITDA of 3.9x

PHDC is establishing the GEMS British International School of Badya in its Badya project in partnership with Egypt Education Platform. 

Hilton signed its second property in Marsa Alam, encompassing 282 rooms.

SVCE appeal against Reliance Heavy Industries Co. was postponed till February 27, 2023.