Valuation uninspiring; maintain Neutral
Raise target price by 5% to QAR100/share, as we account for a higher cash balance, which has offset the cut in steel gross margins over our forecast horizon. We expect a 17% y-o-y jump in 2017 EPS to QAR5.7, mainly due to the absence of one-offs and assume a DPS of QAR5.0/share (+20% y-o-y), yielding 4.8% (vs. DSM average of 4.3% and a sector average of 3.9%). The stock’s c20% premium to fertiliser and petrochemical stocks on 2017 EV/EBITDA (10.1x) can be explained by this above-average yield, in our view, and current stock price levels reflect the company’s risks and rewards; we maintain our Neutral rating.
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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