Turn OW on DPS upside, better yield coverage
1H17 FFO growth likely heralds DPS hike. We increase our 2019-20e DPS estimates by 5% following the acquisition of the European Business Centre (EBC, 4% of GAV), after a 6% hike to our 2017-20e FFO estimates. The acquisition, as well as 1H17 FFO growth (+67% y-o-y, +28% vs. previous forecast), improve visibility on payout coverage (c80% in 17e vs. 64% previously) with potential for full dividend coverage by 2018/19e without debt financing. Our 17e DPS implies an attractive yield of 8.5% after the recent selloff, reaching 10.4% in 19e, +200bps vs. previous forecast. Our DDM-based TP rises by 10% to USD1.25/share, implying an upside of c33%, warranting an upgrade to Overweight from Neutral.
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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