CI Capital - United International Transportation Co. Ltd. (4260) Upgrade to Neutral on valuation grounds; remain cautious on risks

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CI Capital

Ahmed Soliman

EUR 22.10 For Business Accounts Only

Upgrade to Neutral on valuation grounds; remain cautious on risks

Upgrade to Neutral on share price drop, deleveraging. We upgrade our rating to Neutral given the 16.7% share price drop y-t-d. We maintain our DCF-EV unchanged at SAR2.1bn, but raise our TP by 4.2% (based on the adjusted number of shares post the 1:6 share dividends in April 2017) to reflect the cSAR100mn of net debt reduction in 4Q16. Budget trades on a 2017e P/E of 9.6x, c23% below global peers, which we justify through its unfavourable risk profile and its subpar EPS growth of 3.8% over 2016-18e vs. peers’ 6.7%.

07/05/2017 4 EN

Underlying

United International Transportation Co. Ltd.

United International Transportation is engaged in the leasing and rental of vehicles. Co. operates under the brand name "Budget Rent a Car". Co. leases and rents passenger cars and trucks, commercial vehicles and specialized vehicles.

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SA000A0MWH44 Saudi Stock Exchange Saudi Arabia

Provider

CI Capital

CI Capital is a diversified financial services group and Egypt’s leading provider of leasing, microfinance, and investment banking products and services.

Through its headquarters in Cairo and presence in New York and Dubai, CI Capital offers a wide range of financial solutions to a diversified client base that include global and regional institutions and family offices, large corporates, SMEs, and high net worth and individual investors.

CI Capital leverages its full-fledged investment banking platform to provide market leading capital raising and M&A advisory, asset management, securities brokerage, custody and research. Through its subsidiary Corplease, CI Capital offers comprehensive leasing solutions, including finance and operating leases, and sale and leaseback, serving a wide range of corporate clients and SMEs. In addition, CI Capital offers microfinance lending through Egypt’s first licensed MFI, Reefy.

The Group has over 1,700 employees, led by a team of professionals who are among the most experienced in the industry, with complementary backgrounds and skill sets and a deep understanding of local market dynamics.

CI Capital has been recognized as the “Best Investment Bank in Egypt” by EMEA Finance for four years running from 2013-2016, and by Global Finance in 2014 and 2015.

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Analysts

Ahmed Soliman

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Upgrade to Neutral on valuation grounds; remain cautious on risks

BUDGET AB | Trading at demanding valuation; Downgrade to UW

Maintain Neutral on meagre growth outlook

Egypt banks | Higher RRR: A manageable headwind; flag CAE

The Pulse | Cityscape Egypt 2022: Positive vibes

EKHO EY | EGP listing offers ideal currency hedge

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