FX supply crunch triggers unfavourable price hikes
Long-term outlook intact, but EGP devaluation a blow; downgrade to Neutral. We cut our TP to EGP6.25/share from EGP10.7/share. Juhayna had to source FCY from the parallel market for the first time in 2Q16, despite being on the CBE’s FX auction priority list. We expect Juhayna’s profitability to be deterred as its price hikes are unlikely to match the rise in costs. Juhayna trades broadly at par with peers on 2017e P/E of 23x, but at a discount on 2018e (P/E of 15x vs 18x). However, only meaningful FX reforms would improve visibility on the stock, in our view.
Juhayna Food Industries is a food products manufacturing company based in Egypt. Co. is primarily involved in the production, manufacture, packaging and packing of all types of dairy products and its derivative, all types of cheeses, fruit juices, drinks and frozen materials. Co. is also engaged in the perpaing, manufacturing, packaging and packing of all types of food materials, as well as the general manufacturing of agriculture products.
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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