Today’s Top News & Analysis
Egypt joins the BRICS
A new head for the EGX
Hotel prices to increase in 2023 and 2024
SWDY Q2 2023: Strong earnings quality
TAQA to increase investments in Mozambique
MACRO
Egypt joins the BRICS
The BRICS has agreed for Egypt, among six other countries including the UAE, Saudi Arabia, Iran, Ethiopia, and Argentina, to join the bloc starting 2024. The new members will increase the bloc’s share to almost 30% of global GDP and 43% of total oil production. (Enterprise)
A new head for the EGX
The Cabinet appointed Mr. Ahmed Elsheikh as the new head of the Egyptian Exchange, following Mr. Ramy Eldokany. (Enterprise)
Hotel prices to increase in 2023 and 2024
Hotel prices will increase by at least 35% y/y in 2023 to cover the increasing demand in Egypt’s tourism industry. Meanwhile, forecasts indicate that hotel prices may increase by 30% y/y in 2024. (Enterprise)
CORPORATE
SWDY Q2 2023: Strong earnings quality
Elsewedy Electric's [SWDY] consolidated H1 2023 net profits came in at EGP5.6bn (+195% y/y, in line with Prime Research estimates) on revenues of EGP66.6bn (+78% y/y, in line with Prime Research estimates). The revenue mix was as follows:
· The wires & cables segment recorded revenues of EGP37.8bn in H1 2023 (+100% y/y, in line with Prime Research estimates), contributing 54% of total sales.
· The turnkey projects segment recorded revenues of EGP23.7bn in H1 2023 (+44% y/y, -10% vs. Prime Research estimates), contributing 34% of total sales.
· Turnkey projects backlog reached EGP133bn, with EGP23bn of new awards during H1 2023.
· Other business segments recorded revenues of EGP8.1bn during the period (+125% y/y, +8% vs. Prime Research estimates), contributing the remaining 12% of total sales.
A wider gross margin: GPM reached 18.5% (+5pp y/y, overall in line with Prime Research estimates), supported by the increase in the wires & cables margins which reached 20.8% (+7.6pp y/y, +9.5pp vs. Prime Research estimates). GPM for the turnkey segment increased slightly to 10.6% (same as last year, -9.2pp vs. Prime Research estimates). Other electrical products and renewables segments maintained the highest margins at 54% and 52%, respectively.
We have an Overweight rating on SWDY with a 12MPT of EGP36.2/share. The stock is currently trading at a TTM P/E of 5.0x. (Company disclosure)
TAQA to increase investments in Mozambique
TAQA Arabia’s [TAQA] BoD approved a USD200,000 increase in the company’s investments in Mozambique. Meanwhile, its BoD requested additional financial information from management in order to fully evaluate the proposed petroleum station expansion plan. (Company disclosure)
Key Dates
27-Aug-23
SPMD: OGM / Approving financial statements ending 31 Dec. 2022.
28-Aug-23
ZMID: Cash dividend / Deadline for eligibility for a dividend of EGP0.150/Share.
30-Aug-23
ORAS: Financial results Announcement / Q2 2023 financial results' announcement.
31-Aug-23
ZMID: Cash dividend / Payment date for a dividend of EGP0.05/share (1st installment).
PHAR: Cash dividend / Payment date for a dividend of EGP1.00/share (2nd installment).
1-Sep-23
MSCI / MSCI's August 2023 Quarterly Index Review Effective Date.
5-Sep-23
Egypt PMI / August 2023 reading.
6-Sep-23
ELSH: OGM / Approving the decisions of the company’s board of directors in its meeting held on 15/6/2023.
ELSH: EGM / Amending some articles of the Company's bylaws.