Time to take profits
Share rally overdone, downgrade to Underweight from Overweight. AMOC’s share price surged over the past month, outperforming the market by 46%. The new developments are mainly BoD decisions on 1 February 2017 to: 1) carry out a 10:1 stock split, 2) migrate 10% of outstanding shares to GDRs, and 3) implement a USD50mn plant upgrade. Capital amendments are positive for the stock’s liquidity but should not impact valuation, while the new project adds only EGP1/share to our TP. We therefore see the rally as overdone and recommend taking profits. We raise our 12M TP by 33.3% to EGP80/share on higher oil futures and USD:EGP exchange rates, but this is still c27% below the current share price.
Alexandria Mineral Oils Co SAE (AMOC) is an Egypt-based company that operates in the petroleum industry. The Company specializes in the production of essential mineral oils, paraffin wax and its derivatives, naphtha and butane, as well as distributes and markets them in Egypt and abroad. Its manufacturing facilities are spread over 500,000 square meters in the Salina area in Alexandria, and consist of two complexes: the Lube and Special Oils complex, which manufactures neutral oils, paraffin waxes, soft/slack waxes and aromatics, and the Maximization of Gas Oil complex, which manufactures gas oil, naphtha and liquid petroleum gas (LPG) for local consumption, waxy distillates, heavy residue and black oil for blending with exported fuel oil, and biological sulfur. The Company also operates four laboratories, and performs chemical analysis.
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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