Today’s Top News & Analysis
Alexandria Containers & Cargo Handling Co. — Core Coverage Report
CBE is no longer responsible for the subsidized loans initiatives
Maha Capital is looking to invest in Damietta Port
GB Auto to sell a 7.5% stake of MNT Investments to Chimera
Contact mulls entering the green finance market
EFG Hermes closes a securitization bond issuance
Cairo Educational Services to pay cash dividend
NEW RESEARCH
Alexandria Containers & Cargo Handling Co. — Core Coverage Report
Gateway of the North: A simple, yet effective business model; initiate at OW/M
· A play on Egypt’s trade recovery: Alexandria Containers & Cargo Handling Co. [ALCN] is one of the five captains of Egypt’s sea terminal companies operating on the north shore. ALCN operates in Egypt’s largest gateway ports, Alexandria and El-Dekheila terminals, with a combined market share of 50.5% of total handled cargo in both ports. Strategically located within the European and American sea trade with easy road access to the Delta region and Cairo, ALCN is a play on the recovery of Egypt’s trade which we expect to grow by a 5y CAGR of 8.5%. Also, ALCN enjoys some key strength points: (1) It operates as a free zone company, with no tax burden on its earnings. (2) Its revenues are linked to USD, while costs are mostly denominated in EGP. (3) It has exposure to a high-margin business with a five-year average gross profit margin (GPM) of 68%. (4) A stable dividend payer with a high dividend yield.
· Overweight/Medium Risk, 12MPT EGP16.9/share (+30%): We valued ALCN using a five-year discounted cash flow approach that produced a fair value of EGP14.4/share and a 12-month price target (12MPT) of EGP16.9/share, hence our Overweight rating. Our 12MPT offers an upside potential of 30%, implying a 2022/23e P/E of only 9.7x.
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MACRO
CBE is no longer responsible for the subsidized loans initiatives
The Prime Minister has issued a decree in the Official Gazette stating that the CBE will no longer be responsible for the previously launched initiatives of subsidized loans. Instead, the responsibility of such initiatives will be transferred to Ministry of Housing, Ministry of Finance, and Ministry of Tourism. (Official Gazette)
Maha Capital is looking to invest in Damietta Port
Maha Capital, a subsidiary of Qatar Investment Authority (QIA), is interested to invest in the new projects that are expected to take place in Damietta Port. (Al-Mal)
CORPORATE
GB Auto to sell a 7.5% stake of MNT Investments to Chimera
GB Auto’s [AUTO] BoD approved selling a 7.5% indirect stake of MNT Investments to the UAE based Chimera Investments for total proceeds of USD60mn, with an earnout component that could potentially lead to total proceeds of USD71.3mn. AUTO will keep a 49.5% indirect stake post the deal. We note that a fair value study conducted by Alpha Capital has indicated a valuation for MNT Investments at EGP17bn. (Company disclosure)
Contact mulls entering the green finance market
Contact Financial Holding [CNFN] is reportedly looking to launch number of green financing products, with a targeted portfolio of EGP1.25bn in 2023. The products will focus on solar energy and modern irrigation systems. (Arab finance)
EFG Hermes closes a securitization bond issuance
EFG Hermes Holding [HRHO] has completed the third securitization bond issuance for Pioneers Properties [PRDC] with a value of EGP292.5mn. This issuance is a part of a program worth EGP3.0bn. (Mubasher)
Cairo Educational Services to pay cash dividend
Cairo Educational Services [CAED] BoD approved the suggestion to distribute cash dividends of EGP1.15/share, implying a 6% in dividend yield. (Company disclosure)
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