Stay Underweight; rally ignores cost burdens ahead
Stronger short-term headwinds arise. We hold our bleak long term Egyptian cement industry outlook as a result of sizeable new capacity due to come on stream. Also there are new developments driving us to expect short-term headwinds too; specifically notable cost inflation on EGP floatation and a rise in coal prices (in USD terms). We reduce our 2017-19 EBITDA estimates for ACC by an average of 16% p.a. and reiterate our Underweight call on the stock.
Arabian Cement Co is a Saudi Arabia-based company engaged in the construction materials industry sector. The Company produces and distributes cement and its derivatives. The Company products include ordinary Portland cement, sufate-resistant cement, Portland pozzolan cement and other types of cement. The Company has one wholly owned subsidiary, namely Bahrain Cement Holding Company, and also holds stake in Qatrana Cement Company, Jordan, which is engaged in the production of calcium carbonate and its derivatives, and black and white cement. Public Pension Agency holds 5.10% stake in the Company's 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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