Nearly all EGX 30 constituents have already published their CQ4 2020 financials. With the exception of Qalaa Holdings [CCAP] and excluding Orascom Investment Holding [OIH] and its spinoff Orascom Financial Holding [OFH], a total of 28 companies of the EGX 30 constituents have published their quarterly results for CQ4 2020 ended 31 December 2020. Judging from this 28-company sample, we note below some takeaways that we find interesting concerning EGX 30 and its constituents during CQ4 2020:
• Banks still dominate earnings, contributing c.28% to the index’s bottom line, followed by Real Estate (c.15%) and Consumer Staples (12%). However, we note that banks’ contribution to the index’s profitability has come down drastically when compared to CQ4 2019 when it was c.39%.
• Compared to CQ3 2020, Industrials (+59% q/q) and Non-Banking Financials (+51% q/q) were at the top of the ladder in terms of earnings growth. Meanwhile, Health Care (-31% q/q) and Real Estate (-23% q/q) were the ones to witness the biggest earnings slump.
• Compared to CQ4 2019, Consumer Discretionary (+99% y/y) and Telecom Services & IT (+35% y/y) were the highest in terms of earnings growth. On the other hand, Real Estate (-43% y/y) and Energy & Utilities (-27% y/y) have seen the largest slippage in earnings.
• Singling out names in CQ4 2020, we note that GB Auto [AUTO] achieved the highest earnings growth (+557% y/y), while TMG Holding [TMGH] (-82% y/y) experienced the widest earnings tumble. Also, out of the 28 companies, from a y/y perspective, only Sidi Kerir Petrochemicals [SKPC] turned to profitability. On the other hand, both Heliopolis Housing & Development [HELI] and AMOC [AMOC] drifted into losses in CQ4 2020.
• If CQ4 2020 figures were to be annualized, sectoral P/E ratios indicate that Banks and Consumer Discretionary have become the cheapest from q/q and y/y perspectives, respectively. Meanwhile, Real Estate appreciated the most of all others. Using annualized CQ4 2020 figures, the EGX 30’s P/E ratio stands at 7.4x vs. 8.3x in CQ3 2020 and 9.8x in CQ4 2019.