Initiate with Underweight on impairment risks
Unstable cash cycle a drag; no close resolution to Iran dispute. DG is a gas E&P player (output 64k boepd) mainly exposed to the Kurdistan Region of Iraq (KRI) and Egypt. Our TP implies USD1.33/bbl on EV/2P reserves for KRI and UAE (c16% higher than recent M&A in KRI) and USD5.6/bbl for Egypt (vs USD11.2/bbl for the sector), justified by delayed receivables collection. We also value DG’s AED2bn investment with Iran at a 60% discount to book as it is idle since 2005, with no clear operational timeline. Our rating gives no weight to the recovery of legal claims, DG’s share could be cAED4.31/share.
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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