1. Today’s Trading Playbook
KEY THEMES
Misr Chemical Industries [MICH] posted its 7M 2020/21 indicators, showing a bottom line of EGP93mn. This implies a monthly net income for January of c.EGP11mn vs. EGP10mn in December. We note that net earnings for January and December are below the 7-month average for 2020/21 of EGP13mn. However, this is still conforming with the view of normalization in selling prices during H2 2020/21. We remind you that our projections for MICH bottom line is EGP141mn this year. Unless a surprising rebound in selling prices took place in Q3 2020/21 on the back of the situation with a second wave of COVID-19, we believe MICH is on the road to hit our target earnings for the year. At the current market price, MICH 2020/21 forward P/E and EV/EBITDA are in the space of 5.6x and 3.1x, respectively. We remind you that we have an Overweight investment rating on the name, with a 12M PT of EGP13.9/share (ETR +29%).
Positive
MICH: The likelihood of continuing stable performance throughout the entirety of 2020/21.
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