Report
Victor Dima
EUR 37.08 For Business Accounts Only

Guinness Nigeria (SELL, TP NGN 50/share) - Revising upwards our estimates post gross margin improvement in Q3 17A but maintain SELL on limited visibility


  • We upgrade our FY 18e/19e EPS by 45%/19% and TP to NGN 50/share (from NGN 40/share) post surprisingly strong Q3 17A numbers.
  • Company reported strong Q3 17A, helped by unexpected improvement in gross margin (54.7% vs. 24.6% in Q2 17A), driving beat across the numbers vs. our estimates.
  • We maintain our SELL recommendation as visibility remains low despite a sudden improvement in gross margin to record levels. Subdued consumer demand, FX scarcity and high inflation persists in Nigeria as well as pending rights issue (NGN 40bn at NGN 58/share) could weigh on stock performance in the ST.


Underlying
Guinness Nigeria PLC

Provider
Arqaam Capital
Arqaam Capital

Established in 2007, Arqaam Capital is a specialist emerging markets investment bank, bringing regional and international product offerings to the emerging markets. Arqaam Capital combines international best practice with expertise in the markets in which we operate. Our primary role is to provide financial intermediation and create investment opportunities for frontier and emerging markets investors looking to invest in their own markets and abroad, as well as international investors seeking opportunities in target frontier and emerging markets. Arqaam Capital is headquartered in the Dubai International Financial Centre (DIFC), with additional offices in Libya, Lebanon, Egypt, and South Africa. 

Arqaam Capital's research platform provides the largest coverage footprint of MENA equities and one of the largest on the African continent with a total of 300 stocks under coverage. Arqaam Capital is ranked as one of the leading research providers in the region - a reflection of its broad coverage universe, its in-depth and high quality research, as well the compelling investment ideas that the team generates. The analysts closely analyze their sectors and issue in-depth company and sector research while the strategy team connects the micro with the macro, focusing on index analysis, macroeconomics and strategy research. 

Analysts
Victor Dima

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