1. Today’s Trading Playbook
TABLE OF CONTENTS
KEY THEMES
Zahraa Maadi Investment & Development [ZMID] has seen some insane rally on its stock price, reaching to a high of EPG26.7/share, before closing yesterday at EGP23.72/share, gaining 268% since last April! ZMID, which is 20.3%, owned by aiBank, has now a market cap of EGP6.3bn, which would imply a value for aiBank of EGP1.3bn. Despite the surge in ZMID stock price, we note that the market hasn’t priced the effect on EFG Hermes [HRHO], as it has recently announced the acquisition on 51% of aiBank shares.
That being said, given ZMID market price, we see attributable value for HRHO of EGP650mn, or c.EGP0.71/share, which represents 6% of Monday’s close. This makes us think that the market is still lagging the pricing of HRHO’s aforementioned announced stake in aiBank. We remind you that we have an Overweight recommendation over the name, with 12-month price target (12M PT) of EGP14.8/share (+30%). HRHO is currently traded at a forward P/E of 7.9x, and forward P/B of 0.7x, whereas 2021e ROAE is at 9%.