Upgrade to OW on scope for ticket increases
Raise 12M TP by 14% to AED1.60/share. We raise our 2017-19 EBITDA forecasts by an annual average of 15%, despite increasing fuel costs, to reflect 5 aircraft additions in 2018 and 15% ticket fare increase in 2017. We expect a DPS of AED0.11 for 2016, yielding 8.1% vs. industry and DFM averages of 3.3% and 3.9%, respectively. Our TP implies a 2017e P/E of 10.2x, in line with the industry average, but 11% below LCC peers due to moderate 2017-19e EPS CAGR of 10% (vs. 18% for LCCs). Our previous rating was Neutral.
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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