Misr Chemical Industries: Another Chapter of Strong Annual Growth
Overweight and 12M PT maintained
Misr Chemical Industries [MICH]
Egypt / Materials / Q3 2021 Results
12M PT EGP13.9 (+21%)
as of 25 Nov 2020
Investment Rating: Overweight | Risk Rating: High
Factory maintenance weighs on performance q/q: Misr Chemical Industries’ [MICH] earnings performance continued to impress with 9M 2020/21 registering a bottom line of EGP108mn vs. only EGP28mn a year earlier. Sound earnings performance is the product of substantial margin improvement; GPM came in at 46.9% vs. 30.9% a year earlier. Q3 2020/21 results alone, while still impressive from a y/y perspective, point to a sequential weakening. MICH achieved a top line of EGP107mn in Q3 2020/21 (+17% y/y, -12% q/q), whereas its bottom line came in at EGP25mn (+79% y/y, -37% q/q). Such a q/q decline in performance indicators is attributed to weaker sales volumes during the quarter on the back of some factory maintenance, resulting in softening top line. Also, a higher effective tax rate in Q3 2020/21 further contributed to the sequential decline.
Mohamed Saad
Equity Analyst
T +202 3300 5719