Pre-Trading Thoughts

Al Ahly Pharos

CCAP: What Does One Year Forward Look Like? In light of the potential debt settlement deals and restructuring plans of CCAP, we ran an exercise to examine the impact on the FV of the stock if the announced plans succeed. According to our assumptions and calculations, CCAP’s debt will go down to EGP9,376.5 million (EGP2.35/share) by the end of 2024, while the number of shares will increase to 3,991.4 million shares, based on a capital increase of around USD231 million. We also updated the relative valuation for CCAP’s subsidiaries and applied a conglomerate discount of 20% which resulted in a FV of EGP3.00/share (compared to EGP3.10/share in our previous update before the restructuring). Thus, we believe that the debt settlement and restructuring process including the capital increase will not erode CCAP’s FV.

Government sources said that some local and foreign investors intend to acquire varying percentages of the Egypt Aluminum and Delta Steel companies. The sources added that there are other offers to acquire two other companies owned by the Holding Company for Pharmaceuticals, explaining that the dollar amounts targeted to be collected from these deals range from USD2.5 billion to USD3 billion.

The government is studying a World Bank recommendation for the creation of a new entity to which the ownership of all state-owned companies would be gradually transferred.

Minister of Finance said that the first draft of the new income tax law will be prepared in six months, to be subject to dialogue with the private sector and business stakeholders.

COMI (FV: EGP100.00, OW) recorded a strong set of 1Q24 results where net profit post-minority interest recorded EGP11,924 million (+65% q/q, +97% y/y).

BTFH announced that its wholly-owned subsidiary, Beltone Leasing and Factoring, has signed a sale and leaseback agreement and factoring facility totaling EGP400 million with a real estate development company in Egypt.

CNFN’s subsidiary, Contact Pay, has inked a strategic partnership with e-payments firm Damen to work together to build a comprehensive digital payment ecosystem.

Banque Misr’s Misr Digital Innovation (MDI) has so far invested EGP2.5 billion in Onebank, which is set to be the country’s first digital bank.

The International Finance Corporation (IFC) has agreed to grant Banque du Caire USD100 million in financing to be on-lent to micro, small, and medium enterprises, and female entrepreneurs.

CCAP sent a release regarding the debt purchase offer submitted by QHRI. The FRA decided to extend the period of participation in the debt purchase to the shareholders on 27 May 2024.

Qatari state-owned oil and gas company QatarEnergy is set to acquire a 40% working interest in ExxonMobil’s Cairo and Masry offshore concessions under a farm-in agreement inked by the two parties.

According to local media, TMGH (FV: EGP73.80, OW) achieved 1Q24 sales of EGP63.5 billion.

According to local media, PHDC (FV: EGP7.11, OW) achieved 1Q24 sales of EGP28.9 billion, up 326.6% y/y and up 18.0% q/q.

According to local media, MASR (FV: EGP5.24, OW) achieved 1Q24 sales of EGP14.8 billion, up 725.5% y/y and down 1.6% q/q.

HELI (FV: EGP18.84, OW) Board proposed the distribution of EGP1.34/share cash dividends, implying a DY of 14.3%.

EFID signed an eight-year tenor loan with a value of EGP990 million to finance new production lines to boost capacity.

Egypt's ceramics exports dropped 33% YoY to USD24 million in 1Q24 due to geopolitical instabilities in the region.