KEY THEMES
Misr Chemical Industries’ [MICH] BoD held on 26 January 2022 announced that last December’s bottom line came at EGP16.7mn. This brings H1 2021/22 bottom line for MICH to EGP96.5mn (+17% y/y). While the period of H1 2020/21 is considered an already a strong base, MICH was able to prevail it, thanks to rallying global caustic soda prices. In general, we believe MICH will be able to achieve a double-digit earnings growth in 2021/22, taking into consideration that H2 2021/22 will not be as strong as the first half. We note that MICH is one of the 15 stocks we picked in our annual STANDPoint strategy report published on 30 January 2022. We have an Overweight rating on MICH with a 12MPT of EGP13.9/share (ETR +36%). MICH is currently traded at a 2022e P/E of only 5x.
Elsewhere, a set of economic data were released this morning. For a starter, Egypt’s PMI fell from 49.0 in December 2021 to 47.9 in January 2022 as both output and new orders sub-indices weakened. Moreover, the central bank released the Balance of Payment (BoP) data for Q1 FY22. Until we publish our MACROView note, here are our main takeaways. First, CAD widened by 44% y/y to USD4bn, but it shrank on a quartile basis by 22% q/q. Second, travel balance more than doubled y/y mainly due to the surge in tourism revenues of USD2.8bn vs. USD801mn in the comparable period. Third, transfers grew by 1.5% y/y, recording USD8bn. Fourth, FDI increased by 3.7% y/y, recording USD1.6bn.