Pre-Trading Thoughts

Al Ahly Pharos

The Electricity Ministry has completed its study on increasing electricity prices, with plans to introduce the hike in September following cabinet approval.

Foreign investments in treasury bills increased last May by about USD2.04 billion, reaching USD37.5 billion at the end of May, compared to USD35.46 billion at the end of April.

The Ministry of Electricity is satisfied with the existing “gas, steam, and combined cycle” thermal electricity generation plants and plans to not add any new projects of this type until 2030.

Nissan Egypt is planning to invest USD55.9 million in the Egyptian market until 2026, according to a cabinet statement.

According to local media, PHDC (FV: EGP7.11, OW) achieved stellar 2Q24 sales of EGP33.2 billion, up 157.7% y/y and 2.9% q/q, bringing 1H24 sales up 233.1% y/y to EGP65.5 billion.

According to local media, ORHD (FV: EGP26.26, OW) intends to launch Touban in El Gouna in September 2024. The project is expected to generate sales of EGP45.0 billion over a five-year period.

The Housing Ministry approved a fixed pricing system for land offerings, replacing the previous competitive bidding process.

ARAB Board approved a EGP617.9 million capital increase through rights issue.

The government is set to sign contracts with eight local-foreign consortiums to produce a total of 1.7 bn Kw/h of electricity from municipal solid waste across a number of governorates. The firms and bodies involved in the projects include ORAS (FV: EGP344.18, OW) and SWDY (FV: EGP45.69, EW) among others.

We raised our FV of MTIE to EGP8.20/share and maintain our Overweight recommendation. In our valuation update, we factored in:

• Improved WC dynamics on the back of higher local products contribution to the company’s distribution portfolio,
• Reflected developments across business lines, namely Telecoms, Automotive, Consumer Electronics, and NBFS,
• Adjusted the valuation to the new number of shares post bonus shares distribution, and
• Rolled over the model and updated our macro assumptions.

MTIE is currently trading at 2024f P/E of 7.8x and EV/EBITDA of 6.0x.

According to local press, MNOs are currently conducting technical tests for the “WiFi Calling” service in preparation for its launch before the end of this year in Egypt. The service will be at the same price as traditional calls according to the system of accounting for each subscriber.

DOMT released 2Q24 financial results, reporting net profit of EGP87.8 million (-13.0% YoY, -42.8% QoQ), bringing 1H24 net profit to EGP241 million (-4.4% YoY). DOMT is currently trading at 2024f P/E of 5.1x and EV/EBITDA of 4.0x.

ALCN (FV: EGP35.86, EW) issued its preliminary 4Q23/24 results. Bottom line came in at EGP2.055 billion, up 8.7% QoQ and 71.9% YoY, bringing FY23/24 bottom line recorded EGP6.140 billion compared to EGP4.388 billion in FY22/23 (+39.9% YoY).

BTFH released 1H24 results. Net attributable income reached EGP817 million compared to a loss of EGP146 million in 1H23.

OIH released 1H24 financial results. Net income expanded by 244% y/y, recording EGP296.2 million versus EGP86.1 million last year.

CANA sold its entire 39.7% stake in El Sherif Markets to home appliances manufacturer Fresh in a EGP95.2 million transaction.

Petrojet targets finalizing the implementation of a new project for LPG and naphtha production in Suez during 4Q24 with investments worth EGP1.3 billion.

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