Setting new highs for earnings
Remain Overweight at a 23% higher TP of AED5.80/share. Aramex’s 4Q16 revenue positively surprised growing by 9% q-o-q and 14% y-o-y, due to the higher-margin international express segment—the key growth driver going forward based on increased cross boarder e-commerce (especially in Asia, Europe and US markets). Aramex trades at 16.6x on our revised 2017 EPS estimate (+17% y-o-y on a recurring basis, excl. an AED42mn gain on the acquisition of a 25% stake in an Egyptian logistics facility), in line with courier peers. We view that its higher, more diversified growth (2016-18 EBITDA CAGR of 20% vs. 9% for the sector) warrants a ~15% premium. Aramex’s growth profile is combined with a dividend yield of c4%, on par with the DFM average. Any inorganic growth poses significant upside.
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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