Misr Chemical Industries [MICH]:Nice While It Lasted
Downgrade to Neutral on recent price rally
Egypt / Materials / Q4 2020/21 Results
12M PT: EGP13.9 (+11%)
set on 25 Nov 2021
Investment Rating: neutral | Risk Rating: High
Stunning earnings momentum in 2020/21, thanks to a weak comparable base: Misr Chemical Industries’ [MICH] earnings performance in 2020/21 was one of a kind, as MICH achieved a bottom line of EGP133mn vs. only EGP64mn a year earlier (+109% y/y). The main drivers behind the stellar earnings performance are significantly higher revenues of EGP480mn (+31% y/y), coupled with substantial margin improvement; GPM came in at 46% vs. 37% in 2019/20. MICH’s pretax income in 2020/21 came in at EGP178mn, only +2.5% vs. Prime Research estimates (PRe). Meanwhile, a higher-than-projected effective tax rate of 25% caused bottom line to slightly miss PRe of EGP141mn by some 5%.
Mohamed Saad
Senior Equity Analyst
T +202 3300 5719