Short-term outlook lacks catalysts, downgrade to Neutral
Unlikely to see fee hikes this year. We cut our TP by 22% to account for lower USD-revenue/TEU and, to a lesser extent, higher G&A costs. ALCN’s unit fees fell by 8% y-o-y in FY16/17, falling short of our no growth estimate. With state plans to reduce fees in a bid to stimulate trade (noting that pricing is already high by regional standards), we now assume no growth in FY17/18e (vs. previous +5%) and +5% p.a. thereafter. While ALCN trades at a c19% discount to the peer average of 11.3x on EV/EBITDA in 2017, our valuation puts the stock on par with peers for superior 2017-19e EBITDA CAGR of 9.6% vs. c7% peers.
Alexandria Container and Cargo Handling Company SAE. Alexandria Container and Cargo Handling Company SAE is an Egypt-based public shareholding company engaged in the marine port services sector. The Company specializes in container and cargo handling in Egyptian ports. The Company offers a range of maritime services, including stevedoring and storage, security, tariff of both domestic and foreign trade, and transshipment container handling in the East Mediterranean. The Company operates the following terminals, namely Alexandria container terminal at the port of Alexandria and ElDekheila terminal at the port of Dekheila. The Company's terminals comprise of import and export yards, hazardous yard, operations building, security building, workshops, storage areas, customs areas and fuel stations.
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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