Overweight; yield and output growth offer upside
Discounted, despite yield and prospects. We reduce our TP by 9.5% to GBp190/share to align our forecasts with spot gold prices (-11% vs. previous estimate), production and cash cost guidance. The 6M share price weakness leaves a good entry point with 21% upside, ahead of expectations for robust operational performance in 2H17. Centamin trades on a 2018e EV/EBITDA of 5.2x, 8% lower than junior miners, but stands out on dividends, offering an attractive 2017e yield of 4.6%. Our valuation assumes constant gold prices of USD1,250/oz, with every USD100/oz movement equalling a +/-25% change in our TP.
Centamin is a mineral exploration, development and mining company. Co. is engaged in the business of exploration and mining of precious metals in the Sukari Gold Mine located in the Eastern Desert of Egypt.
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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