KEY THEMES
Global shares were a mixed bag, after a set of weak economic data, which pushed Chinese policy makers to once more ease monetary policy. Meanwhile, Brent oil prices clinched a 3-year high, trading near USD86.7/bbl. Higher oil prices came on the back of tight supply concerns, with traders shrugging off the potential impact of the Omicron variant on global demand.
Elsewhere, Juhayna Food Industries [JUFO] has released its belated Q3 2021 financials yesterday. JUFO registered a bottom line after minority of EGP173mn (+14% y/y), as the company managed to grow its revenues by 23% y/y to EGP2.4bn (+23% y/y), mostly driven by volume growth. Despite solid top line growth, GPM deteriorated by 5pp y/y to 27%.
JUFO’s management attributed margin contraction as a result of higher raw materials (i.e. raw milk) and packaging material prices, due to global supply chain disruptions. However, management expects margins to gradually improve later as JUFO started to gradually pass on the cost hikes to the consumer. We note that JUFO’s stock price has rallied 76% since its bottom recorded last May. However, given projected earnings growth, JUFO could still offer a decent upside from current levels as it is still trading at a considerable discount to regional peers.