Growth constrained; initiate at Neutral
Decent yield, but low visibility on growth. We believe Air Arabia, the secondlargest low-cost carrier (LCC) in MENA with a 2.2% share of passengers flown in 2014, could be subject to airport capacity constraints, as well as pressure to lower its fares given that regional LCCs should benefit more than Air Arabia from lower oil prices. Our 12M target price of AED1.40/share implies c14% upside and a 2016e P/E of 11.4x, 5.4% below LCC peers, due to a moderate 2016-18e EPS CAGR of 9.6%. The stock’s dividend yield is attractive, at 8% in 2016e—vs. an industry average of 2.8% and the DFM average of 2.9%.
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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