Streamlining for resilience, reiterate Overweight
A medium-term play as overhang from USD shortage subsides. EKH trades on a 2017e P/E of 6.1x, but with an EPS that has become increasingly resilient to cyclicality (oil exploration was discontinued in 4Q15) and to greenfield risk (potential to exit EHC, an EGAN1 project). We raise our valuation by 9.3% to USD0.82/share as EKH’s two main subsidiaries, Sprea Chemicals and NatEnergy (together c65% of our SoTP), posted 1H16 results that beat our expectations. The stock’s heavy mispricing is in our view on the back of limited FCY supply--an overhang that should subside as of 4Q16 with Egypt’s ongoing FX reforms.
Egypt Kuwait Holding is a long-term-term private equity holding firm in Africa and the Middle East. Co. has a portfolio of investments in the Fertilizers, Petrochemicals, Energy, Manufacturing, Insurance, Information Technology and Transport sectors. Co. generally acquires majority stakes and takes management control in most of its investments. As of Dec 31 2011, Co.'s investment portfolio inlcuded ALEXFERT; BKH; NFC; EHC; Sprea Misr; Plastichem; NATGAS; Shabakat; Nubaria Gas Company; Kahraba; Fayum Gas Company; Gas Chill; Tri-Ocean Energy; BMIC; African Paints; Al-Shrouk for Melamine and resins; GT; Delta Insurance; Nile General Takaful; Nile Family Takaful; ETC and MERT.
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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