Today’s Top News & Analysis
Offering of Wataniya and Safi to kick start this Wednesday
FRA considers launching a pool for short selling
Government to release USD2bn of goods from ports within 10 days
CBE denies any negative impact on Egyptian banking system from SVB crisis
CICH 2022: Profits at an all-time high
RAYA 2022: Lower earnings despite higher revenues
RACC 2022: Higher revenues and extraordinary net profits
ValU intends to enter Saudi Arabia in 2023
Macro
Offering of Wataniya and Safi to kick start this Wednesday
The Egyptian government announced that the procedures for the offering of National Co. for Natural Water (Safi) and National Petroleum Co. (Wataniya) will start this Wednesday through an advisor as a kick-off to the planned government offerings program. (Al-Mal)
FRA considers launching a pool for short selling
The Financial Regulatory Authority (FRA) is considering the launch of a lending pool of stocks licensed for short selling. The potential pool will be managed by Misr for Central Clearing & Depository (MCDR). FRA is also preparing for the launch of the forwards exchange within six months. (Al-Borsa)
Government to release USD2bn of goods from ports within 10 days
Prime Minister estimated the current worth of goods still congested at ports at USD3.9bn, USD2bn out of which to be released within the next 10 days. He also added that since the beginning of March 2023, USD2bn of goods were cleared. (Al-Mal)
CBE denies any negative impact on Egyptian banking system from SVB crisis
The Central Bank of Egypt has denied any negative impact on the Egyptian banking system from the Silicon Valley Bank collapse, assuring that Egyptian banks don't have any deposits or accounts with the aforementioned bank. (Al-Mal)
Corporate
CICH 2022: Profits at an all-time high
CI Capital Holding’s [CICH] 2022 results showed a bottom line after minority of EGP796mn (+17% y/y), the highest ever in the company’s history. This robust growth was backed by a strong top line growth of EGP3.9bn (+6% y/y) .Top line performance saw the company’s NBFS vehicles achieve total revenues of EGP3.2bn, whereas its IB platform recorded revenues of EGP730mn.
· NBFS operations were bolstered by strong leasing activities, as Corplease achieved a bottom line of EGP515mn on the back of new bookings of EGP7.2bn (+25% y/y) and with a market share of 18.3%. Meanwhile, CICH’s microfinance arm Reefy achieved a 66% y/y growth in bottom line to EGP333mn on expanding its footprint by adding 27 new branches to reach a network of 132 branches. We note that total lending portfolio is now at EGP18.5bn.
· On the IB platform front, CICH’s brokerage arm saw its market share grow to 13.8%, achieving a top line of EGP334mn (+35% y/y). Meanwhile, CI Asset Management ended 2022 with AUMs reaching a record high of EGP53.5bn (+254% y/y). Furthermore, the IB advisory business concluded eight transactions in 2022 with an aggregate deal size of EGP15bn and EGP58mn in total revenues.
CICH is currently traded at 2022 P/E and P/BV of 6.8x and 1.4x, respectively, with an ROAE of 21.5%. (Company disclosure)
RAYA 2022: Lower earnings despite higher revenues
Raya Holding for Financial Investments [RAYA] announced the full consolidated results for 2022. Net profit after minorities fell 29% y/y to EGP347mn despite a 39% y/y increase in revenues to EGP4.1bn. This was due to:
(1) 32% y/y higher SG&A to EGP2.6bn.
(2) 62% y/y higher financing expense to EGP651mn.
(3) A high base year effect from gains from excluding subsidiary investments last year of EGP328mn against a loss of EGP11mn in 2022.
On a separate note, RAYA’s BoD approved the following:
(1) Raising the paid-in capital of Raya Distribution by EGP250mn to EGP670.9mn.
(2) Establishing a franchise for its fintech arm Aman Holding for Non-Banking Financial Services Technology & Electronic Payments in Saudi Arabia with an expected capital of at least SAR20mn.
(3) Increasing Aman Holding’s paid-in capital by EGP450mn to reach EGP1.065bn. (Company disclosures: 1, 2)
RACC 2022: Higher revenues and extraordinary net profits
Raya Customer Experience [RACC] reported 2022 net profits of EGP46mn (+121% y/y) on higher revenues of EGP1.23bn (+54% y/y) (including government support).
· Revenue growth was driven by expansions in operations and the EGP devaluation.
· Gross profit margin decreased by 2pp y/y to 32% due to the impact of salaries and wages expenses (+63% y/y).
· FX gains recorded EGP23mn compared to FX loss of EGP3mn in 2021.
Meanwhile, Q4 2022 net profits grew to EGP36mn (+1743% y/y) on higher revenues of EGP372mn (+58% y/y) due to increasing the offshore revenues (USD) by 87% y/y to EGP247mn, while gross profit margin slipped by -0.2pp y/y to 34%. (Company disclosure)
ValU intends to enter Saudi Arabia in 2023
ValU, the consumer finance arm of EFG Hermes Holding [HRHO], unveiled its intention to enter the Saudi market in 2023 after obtaining the required permits. (Al-Mal)
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