Today’s Trading Playbook
Nouran Ahmed | Equity Analyst
KEY THEMES
Ibnsina Pharma [ISPH] held a conference call on Monday concerning its Q1 2022 results and discussed El-Shorouk Hospital acquisition. Here are our key takeaways:
Improved operating performance: ISPH’s witnessed a double-digit growth in both net profit and revenues, where net profits came in at EGP58.8mn (+17% y/y) and top line reached EGP5.3bn (+12% y/y). Meanwhile, EBITDA came in at EGP180mn (+7% y/y), while operating expenses-to-sales ratio declined to 4.1% (-0.2pp). On the other hand, GPM slid slightly to 7.4% (-0.4pp).
The call for forward integration: ISPH inked the agreement to acquire a 100% stake of El-Shorouk Hospital, worth EGP430mn (EGP200mn in cash, while EGP230mn as a previous debt settlement) in a central location between El-Shorouk, Badr, Madinaty, and Canal line cities. The hospital is built on a 10,000 sqm land and is expected to serve 4.5-5mn people.
Hospital’s operational readiness: El-Shorouk Hospital has an initial license to operate in addition to a license to receive blood in its blood bank; however, the quality assurance license is expected somewhere between July-September. The hospital might need additional capex spending worth EGP50mn, in order to be operational by end of 2022. ISPH management will stay away from managing the hospital, leaving managerial reasonability to a team of professionals specialized in hospital management.
Valuation: ISPH is currently traded at TTM P/E of only 6.3x, below market average and very far from ISPH’s own historical levels.
Now, on to the top news and analysis for the day.
Top News & Analysis
MACRO NEWS
Egypt hopes to finalize a fresh assistance program with the IMF within two months. (Enterprise)
The International Islamic Trade Finance Corporation (ITFC) has raised the ceiling for its financing agreement with Egypt to USD6bn from USD3bn.(Enterprise)
The government will hold public consultations regarding privatization plans over three months. (Cabinet)
CORPORATE NEWS
Elsewedy Electric [SWDY] announced its Q1 2022 results where net profits reached EGP761mn (+8.7% y/y). Gross profits came at EGP2.3bn (+26.1% y/y) while GPM decreased to 12.5% compared to 15% in Q1 2021. Similarly, revenues rose to EGP18.6bn (+51% y/y). (Company disclosure)
TMG Holding [TMHG] released its Q1 2022 unaudited financial indicators, achieving consolidated net profit after tax of EGP553.9mn (+27.5% y/y) vs. EGP434.6mn a year earlier (Company disclosure)
Sidi Kerir Petrochemicals [SKPC] preliminary Q1 2022 figures showed net earnings of EGP251mn compared to EGP152mn a year earlier (+65% y/y). (Company disclosure)
Commercial International Bank [COMI] reportedly will offer two new product CDs. A 14% p.a. yield for 4 years, while the other is 13.5% p.a. for 3 years. (Amwal alghad)
Cairo poultry [POUL] announced its Q1 2022 results; reporting a slight increase in net profits, reaching EGP53mn (+1.1% y/y). (Company disclosure)