Still buyers; floor value seen at EGP290
Cut 12-month target price by 13% to EGP290/share; maintain Overweight. We reduce our EPS & FCF estimates by c17% each over FY16-20e as we turn conservative in a bid to reach a floor valuation. Our TP still implies 31% return potential and puts the stock on a FY16e P/E of 12.5x, 20% below global industry peers. As a government-backed monopoly, strong pricing power and low demand elasticity entail Eastern could beat our forecasts.
Eastern Company SAE is an Egypt-based company, which is engaged in manufacturing tobacco products. The Company's product portfolio includes cigarettes, cigars, pipe tobacco, and molasses tobacco (Moassels), as well as other related products such as cigarettes' filter rods and homogenized tobacco. Its products are divided into two segments: Export and Local products. Its Export cigarette, cigar and molasses products include such brands as Cleopatra, Taba, Golden West, President and Delta. Its Local segment offers brands, including Cleopatra, Mondial, Corona, Jose Bartolo and Legation, among others. In addition, The Company is also active in the investment, financial, commercial, industrial, agricultural, real estate and services sectors.
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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