Ghazl El-Mahalla Football Co. [GMFC]: IPO Update
Subscription period extended, subscription ceiling raised
Ghazl El-Mahalla Football Co. [GMFC]
Egypt / Consumer Discretionary / Pre-IPO Note update
IPO Price (including issuance fees) EGP1.02/share
Implied Market Cap EGP200mn
Investment Rating: Not rated | Risk Rating: Not rated
Subscription period extended:
In view of summer holidays and the long Eid Al-Adha vacation in July, the subscription period for Ghazl El-Mahalla Football Co.'s [GMFC] EGP98mn capital increase has been extended through 14 August 2022. This should provide ample time for potential investors to consider the credentials of the investment.
Subscription ceiling raised:
Simultaneously, subscription ceiling has been raised from 2mn shares to 15mn shares. Hence, the maximum amount of shares that any investor can subscribe is now 7.5x the initial amount.
Revenues and earnings assumptions recap:
As previously stated in our Pre-IPO Note published on 14 June 2022:
• Revenues to grow at a 7-year CAGR of 13% to EGP155mn by 2030.
• EBITDA to grow at a 7-year CAGR of 27% to EGP70mn by 2030.
• Net income to grow at a 7-year CAGR of 22% to EGP67mn by 2030.
Valuation:
The company’s projections (as per its prospectus) imply the following valuation multiples at the subscription price:
• 2023 EV/revenues of 1.1x (vs. 7-year CAGR of 13%),
• 2023 EV/EBITDA of 5.5x (vs. 7-year CAGR of 27%), and
• 2023 P/E of 11.8x (vs. 7-year CAGR of 22%).
As such, GMFC’s PEG ratio (P/E vs. earnings growth) as implied by the subscription price is 0.5x.
Nada Wagdy
Equity Analyst
T +202 3300 5726