Growing efficiently; initiate with Overweight
Positive outlook on undemanding valuation. We initiate coverage on Agthia, UAE’s leading F&B provider, with an Overweight rating. Ongoing efforts to enhance profitably (12.4% net margin in 2015 versus 7.5% in 2011) and Al Bayan acquisition in 3Q15 are key growth drivers, with further organic and inorganic expansions providing upside. 2Q16 earnings could act as a share price trigger, with us expecting 11% y-o-y growth in net income. The stock trades on a 2017e P/E of 15x, at an unjustified discount to peers’ 17x, despite its resilient nature. Key catalysts are any M&A or capacity additions, supporting Agthia’s 2020 target to double top line; our forecast is 31% short of this guidance.
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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