KEY THEMES
Eastern Company [EAST] is looking to monetize some of its unutilized assets that include land plots located in Alexandria and Giza. EAST, one of Egypt’s main MSCI EM index members, slipped some 9.5% ytd. The decline in EAST’s share price is the product of different factors which include but are not limited to: (1) Negative sentiment overall towards large caps, (2) Weaker participation from foreigners in Egyptian equities, and (3) Consumer-related names having not made their comeback yet since the beginning of pandemic.
On the other hand, EAST possesses one of the strongest balance sheets, with its net cash position representing c.32% of its market cap. With the stock slumping ytd, EAST’s expected dividend yield is solidly in the low- to mid-teens. During a 9M 2020/21, EAST managed to grow its earnings by 24% to EGP3.9bn, where 2020/21 bottom line is estimated to hover around EGP5bn, bringing EAST forward P/E to a modest 5.3x.