Pre-Trading Thoughts

Al Ahly Pharos

Egypt is looking to welcome some 15.5-16.5 mn tourists this year, Tourism Minister said. The Ministry has revised its initial target of 17-18 mn due to geopolitical tensions.

There will be no increase to income tax rates or brackets, Finance Minister, in response to media reports that claimed otherwise.

The government is looking to launch a telecom-focused sub-fund under the Sovereign Fund of Egypt (SFE) within weeks.

The Ministry of Environment is preparing a package of projects worth close to USD15 billion to confront climate change, to be delivered soon to international development institutions.

Seven Turkish ready-made clothing companies have requested to move their factories to Egypt.

Bonds worth USD1.25 billion that were issued by the government in 2020 are due today. There is another bond repayment next November with a value of USD1.35 billion.

Finance Minister recently issued a decision to enhance the “Primary Dealers” system for government debt instruments. This move aims to stimulate activity in the secondary market.

GBCO released 1Q24 results:

Consolidated attributable net profit recorded EGP626 million (+482.1% YoY, +1.0% QoQ). GB Auto’s net profit spiked by 742.6% YoY to recorded EGP380 million. GB Capital net profit improved by 30.8% YoY yet dipped by 57.0% QoQ to record EGP248 million, this sequential decline came on the back of a high-base effect driven by significant securitization gains realized in 4Q23. GBCO is currently trading at a FY24 P/E of 3.9x.

ORWE reported solid 1Q24 results:

Attributable net profit of EGP427 million (+4.1% YoY, -3.6% QoQ). The sequential decline came on the back of FX losses in addition to the one-off high income tax, due to distortion by dividends distributed from group entities. ORWE is currently trading at 2024f P/E of 4.7x.

PHDC achieved stellar 1Q24 results, with 1Q24 sales soaring 376.6% y/y and 31.8% q/q to a remarkable EGP32.3 billion, driven by Badya and the launch of P/X, the company’s latest project next to Palm Hills October. PHDC is comfortably on track to exceed our FY24 sales forecast of EGP66.2 billion.

HELI declared EGP1.34/share cash dividends (DY of 12.9%). Record date is 10 Jun-24. Distribution date is 13 Jun-24.

ARCC reported 1Q24 attributable net income of EGP152.6 million (-37% YoY, -23% QoQ). Bottom-line drop was mainly backed a FX loss hit on the company’s P&L. ARCC is trading at FY24 P/E of 5.3x.

MCQE reported 1Q24 attributable net income of EGP31.5 million (-52% YoY, -61% QoQ). Operating margins were adversely affected by high exchange rates as the Group depends mainly on imported coal as its main source of energy to operate its plants. MCQE is trading at FY24e P/E of 16.8x.

CICH 1Q24 net attributable profit recorded a strong EGP940 million (+220% q/q, +194% y/y), mainly boosted by FX gains, which recorded EGP1,039 million. CICH is currently trading at P/E24 of 3.0x.
CICH has announced its intentions to set up an on-the-ground presence for its investment bank in Saudi Arabia and the UAE.

Some 200 pharma products could be subject to price hikes ranging from 5-20% starting next week. The price hikes will eventually hit a total of 1.5k products over the coming 12 months.

RMDA announced the launch of Ramelact, Egypt's first Lactase Enzyme supplement for the treatment of Lactose Intolerance.

ADQ’s AD Ports has inked an MoU with Egyptian shipping giant Transmar and ORAS to explore the possibility of setting up a green methanol storage and export facility targeting maritime transport.

ElSewedy Cement increased its stake in CCAP from 3.85% to 5.51% through at an average price of EGP2.44/share.

KIMA received the FRA's approval to invite shareholders to subscribe to the remaining shares of the capital increase amounting to 3.4 million shares.&