NEW RESEARCH
Egyptian International Pharmaceutical Industries Co. (EIPICO) [PHAR]: A Pharma Master
Egypt’s leading drugmaker: Egyptian International Pharmaceutical Industries (EIPICO) [PHAR] is one of Egypt’s leading drug manufacturers with a market share of 3.12% in 2022. PHAR has a wide range of drugs, led by antibiotics and serving c.25 therapeutic classes. Currently, PHAR has two operating factories (EIPICO I and EIPICO II), with its third factory (EIPICO III) expected to be launched by Q3 2024.
Overweight / Medium Risk, 12MPT EGP66/share (+155%): We valued PHAR using the discounted cash flow (DCF) approach which yielded a fair value of EGP43/share and a 12MPT of EGP66/share, offering an upside potential of 155% and hence our Overweight rating. We expect PHAR’s earnings to grow at a 10y CAGR (2022-32) of 18%.
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Today’s Top News & Analysis
Customs Regulation Reforms
Egypt’s natural gas production falls to a three-year low in 5M 2023
Building material exports increased 6% y/y in H1 2023
Egypt buys USD28.3mn worth of sugar; growing fears of an Indian export restriction on sugar
MTIE to increase capital through a 25% stock dividends
EZDK obtains 6 year joint loan
FRA greenlights Beltone's due diligence on Cash Micro Finance
OFH mulls applying for the digital bank license
Heliopolis H&D denies recieving any offers
Banque Misr to launch a new digital payments subsidiary
CI Capital concludes an EGP700mn bond issuance for Reefy
MACRO
Customs Regulation Reforms
Egypt's Minister of Finance announced amendments to the Customs Law. The aim is to streamline procedures to reduce customs clearance times. The changes include the introduction of electronic customs declarations immediately upon unloading imports, unless stored in licensed customs areas or warehouses. These measures aim to expedite customs clearance, facilitate direct transit trade, and encourage acceptance of insurance documents as customs guarantees instead of cash or bank guarantees. The amendments also provide exemptions to petroleum companies from fines and allow adjustments to exported quantities within 72 hours based on actual loading, as opposed to before transportation. (Cabinet statement)
Egypt’s natural gas production falls to a three-year low in 5M 2023
Egypt’s natural gas production in 5M 2023 declined by 9% y/y and 12% vs. 5M 2021, according to the Joint Organisations Data Initiative (JODI). (Reuters)
Building material exports increased 6% y/y in H1 2023
Egypt's exports of building materials, metals, and refractories reached USD4bn in H1 2023 vs. USD3.7bn in H1 2022. (Economy Plus)
Egypt buys USD28.3mn worth of sugar; growing fears of an Indian export restriction on sugar
The Egyptian Sugar and Integrated Industries Co. (ESIIC) reportedly bought c.50,000 tonnes of raw sugar in an international tender which closed on 5 August 2023. The sugar will be delivered as a single shipment during October at an estimated cost per metric ton CIF (cost, insurance, and freight agreement) of USD565.4. Meanwhile, commodity traders are concerned that India might be on the verge of restricting sugar exports, given that production is expected to fall to 30.6mn tonnes (-3.4% y/y) in 2023/24 due to a lack of rainfall. India had just recently placed an export ban on certain types of rice in an effort to control domestic prices. (Zawya, Asharq Business)
CORPORATE
MTIE to increase capital through a 25% stock dividends
MM Group for Industry & International Trade [MTIE] OGM and EGM approved raising its paid-in capital by c.EGP150mn to EGP749mn (a 25% increase). The capital increase will take place through distributing 25% stock dividends, offering 241.7mn new shares. (Company disclosure)
EZDK obtains 6 year joint loan
Al Ezz Dekheila Steel Co. (EZDK) [IRAX] obtained a 6 year loan from several foreign banks to finance the government’s exit. The full value of the loan was not disclosed, but it is expected to be in the realm of USD150mn. The value of the loan will be surrendered in its entirety to the Egyptian banking system. (Company disclosure)
FRA greenlights Beltone's due diligence on Cash Micro Finance
Beltone Financial Holding [BTFH] announced that the Financial Regulatory Authority (FRA) has approved the due diligence on Cash Micro Finance for the purposes of an acquisition. (Company disclosure)
OFH mulls applying for the digital bank license
Orascom Financial Holding [OFH] is considering applying for a new digital banking license. However, neither the partners nor the financing scheme have been determined. (Company disclosure)
Heliopolis H&D denies recieving any offers
Heliopolis Housing & Development [HELI] has denied the media news about receiving an offer from a Saudi investor to buy the Heliopark land plot for USD400mn. (Company disclosure)
Banque Misr to launch a new digital payments subsidiary
It has been reported that state-owned Banque Misr is preparing to launch a new digital payments subsidiary by next October in partnership with Banque de Caire [BQDC]. (Al-Borsa)
CI Capital concludes an EGP700mn bond issuance for Reefy
CI Capital Holding [CICH] announced concluding the first securitized bond issuance for its microfinance arm Reefy Microfinance for EGP700mn as part of a 3-year program with a total of EGP3bn. (Company disclosure)
Key Dates
10-Aug-23
MSCI / MSCI's August 2023 Quarterly Index Review Announcement.
ISPH: BoD meeting / Discussing financial results.
13-Aug-23
EKHO: BoD meeting / Discussing financial results.
CANA: OGM / Approving increasing the issued capital.
14-Aug-23
ETEL: Financial results Announcement / Q2 2023 financial results' announcement.
16-Aug-23
DOMT: EGM / Amending Articles No. 3 & 4 of the company's bylaws.
RMDA: EGM / Approving increasing the issued capital & amending Articles No. 6 & 7 of the company's bylaws.
17-Aug-23
EGTS: OGM / Approving financial statements ending 31 Dec. 2022.
20-Aug-23
BINV: Cash dividend / Deadline for eligibility for a dividend of USD0.032/Share.
21-Aug-23
BINV: Cash dividend / Ex-dividend date for USD0.032/Share.
23-Aug-23
BINV: Cash dividend / Payment date for a dividend of USD0.032/Share.
MTIE: Stock dividend / Last date for eligibility for a 0.25-for-1 stock dividend.
24-Aug-23
MTIE: Stock dividend / Date for distributing a 0.25 for-1 stock dividend.
27-Aug-23
SPMD: OGM / Approving financial statements ending 31 Dec. 2022.
28-Aug-23
ZMID: Cash dividend / Deadline for eligibility for a dividend of EGP0.150/Share.
31-Aug-23
ZMID: Cash dividend / Payment date for a dividend of EGP0.05/share (1st installment).
PHAR: Cash dividend / Payment date for a dividend of EGP1.00/share (2nd installment).