Pre-Trading Thoughts

UAE’s Masdar, Infinity Power, and Hassan Allam Utilities will set up USD900 million worth of solar power plants in Upper Egypt with a combined capacity of 1 GW after the government greenlit the move, according to media. 

Tunisian-owned oil and gas company HBS International plans to invest USD65 million in gas development and production in the southwest El Alamein area of the Western Desert this year.

Tax revenues increased during the first two months of the current fiscal year by 25.6% y/y to EGP216 billion.

Clothing exports increased 19.2% y/y to USD1.6 billion in the first seven months of 2024.

An additional 8.5 million beneficiaries of Takaful and Karama and informal workers in the construction sector will be added under the national health insurance umbrella.

According to the Head of the General Authority for Freezones, the private sector has the chance to invest in the healthcare, tourism, and education sectors through public-private partnerships.

EAST released 4Q23/24 financial results, reporting bottom line of EGP4,001 million (+69.4% YoY, +76.2% QoQ). FY23/24 net profit recorded EGP9,181 million (+20% YoY). The company is currently trading at FY24/25 P/E of 5.9x and EV/EBITDA 5.9x.

According to local media, EAST secured letters of credit from several banks amounting to nearly USD400 million to import raw materials.

We slightly downgraded our FV for ABUK from EGP81.21/share to EGP76.79/share, maintaining our Overweight recommendation for the stock. Our updated FV is based mainly on: 

• Lower revenue growth as we still see instability in the natural gas supply in Egypt, 
• However, the coming quarters are going to better reflect the full effect of the EGP floatation especially with the enhancement in levels of sales volumes.

ABUK is proposing a cash dividend distribution of EGP5.0/share, implying a dividend yield of 8.2%.

ABUK is currently trading at FY24/25e P/E of 5.1x and EV/EBITDA of 4.7x.

As part of the restructuring of ownership of some subsidiaries of EKHO, the shares held by the Internation Financial Investments Company (a wholly owned subsidiary of EKHO) in the share capital of Sprea Misr for Production of Chemicals and Plastics has been transferred to another subsidiary, SPREA CHEMICALS B.V. ( a wholly owned subsidiary of EKHO). 

SKPC's general assembly approved increasing the company's issued and paid-in capital from EGP1.5 billion to EGP1.8 billion with an increase worth EGP302.4 million distributed over 756 million shares through the distribution of free shares at a ratio of 1:5. 

CLHO issued neutral 2Q24 results. Attributable net income recorded EGP143 million, down 22% QoQ but up 48% YoY. 1H24 attributable net income amounted to EGP325 million (+70% YoY). CLHO is currently trading at FY24 P/E of 15.1x and EV/EBITDA of 7.7x.

The consortium of ORAS (FV: EGP344.18, OW), Hitachi, and French firm Colas Rail will start working on developing Metro Line 1 in October for a 64-month period. The development will come with a EUR800 million price tag, of which ORAS's share is 35%.

According to local media, contrary to previous reports, BINV is looking to either fully exit or increase its stake in its subsidiary Gourmet.

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