Avior Capital Markets - Metair Investments Ltd. (1059) Metair | In need of a strong earnings catalyst

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Avior Capital Markets

Mpho Mokotso

Metair | In need of a strong earnings catalyst

Metair (MTA) released a better than expected set of H1 '18 results as dHEPS grew by 16% h/h to 132cps. Good performance from Automotive Components and Mutlu AkÃ¼ (the Turkish subsidiary) supported earnings growth despite a 17% TRYZAR devaluation. MTA management must work to restore confidence through improved capital allocation. Further, MTA must increase earnings from the earnings catalysts identified by more than the TRYZAR devaluation. The deep discount MTA currently trades at versus the quality of its businesses in SA leads to an OUTPERFORM rating.

03/09/2018 15 EN

Underlying

Metair Investments Ltd.

Metair Investments Limited is a South Africa-based company, which manages an international portfolio of companies that manufacture and supply automotive components, and energy storage solutions for local and export automotive and industrial markets. It operates through two segments: energy storage and automotive components. The energy storage segment manufactures batteries for use in the automotive, telecoms, utility, mining, retail and materials/ products handling sectors. The automotive components include original equipment (OE) components used in the assembly of new vehicles by original equipment manufacturers (OEMs), as well as spare parts and other products used in the automotive aftermarket. Its manufacturing locations include South Africa, Romania and Turkey and it exports products directly from these locations into Africa, Middle East, Russia and Europe.

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ZAE000090692 Johannesburg Stock Exchange South Africa

Provider

Avior Capital Markets

Avior is a globally recognised capital markets research and trading firm, with the broadest research coverage within the region, with 100+ SA and 20+ SSA companies under coverage. Avior services clients from offices in London, Cape Town and Johannesburg.

Our research quality is consistently recognised in local and global surveys, with 18 analysts currently rated in their respective sectors (FM 2017). Value add through in-depth, innovative, high quality and consistent research with comprehensive underlying fundamental modelling supported by regular analyst and roadshow interactions.

Avior has proven that by working closely with our clients we can mutually develop dominant positions in certain sectors, going from strength to strength. Avior has a dedicated ESG team, having been ranked #1 in Corporate Governance research since 2008.

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Analysts

Mpho Mokotso

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