Current FX rate unfavourable for collections, new sales; downgrade to Underweight
Weakened EGP a double-edged sword. We factor in EGP devaluation to translate USD-denominated receivables (66% of assets, 32% of TP) and USD-priced residual land (c2mn sqm ex-phase 3). This has us hiking our TP by 18% to EGP1.10/share, warranting an Underweight rating given the recent share rally (previously Neutral). However, we argue that the magnitude of recent EGP weakness is not in favour of receivables collections with clients unlikely to settle at current FX rates, without a sustainable recovery in tourism. We now assume receivables collection over 10 years (vs. 8 years previously) and lower medium-term presales forecasts.
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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