Initiate with Overweight: Growth and yield in one
Initiate with a 12M TP of USD7.6/share, offering 29% upside. IDH is the top diagnostics player in Egypt, where per-capita healthcare spending sits 40% below emerging market levels, adjusting for income. IDH has superior i) EBITDA margin (c45% versus peers’ c20%), ii) FCF generation (FCF/sales north of 25%), and iii) growth prospects (2015-17e recurring EPS CAGR of 24%). Our TP implies a 2016e P/E of 22x, 8% below MENA healthcare providers’ 24x. IDH trades at 42% and 46% PEG discounts to MENA and global laboratory peers.
Integrated Diagnostic Holding is a holding company fully integrated private sector provider of diagnostics services in Egypt, backed by an internationally accredited diagnostics service portfolio of over 1,000 diagnostic tests, a footprint spanning 354 branch labs as of Dec 31 2016. Co.'s core brands include Al Borg and Al Mokhtabar in Egypt, as well as Biolab in Jordan and Ultralab and Al Mokhtabar Sudan in Sudan. Co. also operates the Medical Genetics Centre brand in Egypt. Co. offers more than 1,000 diagnostic tests, ranging from basic tests (such as glucose testing for diabetes) to molecular tests for hepatitis and highly specialized DNA tests.
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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