Initiate at Overweight on c45% potential upside
Operating far from the crowd. We initiate coverage on Obour Land, Egypt’s largest carton pack cheese player in value terms, with an Overweight rating and a 12-month TP of EGP14.0/share. Trading on a 2017e P/E of 11x, well below MENA peers’ 18x, the stock boasts a healthy cash cycle with 3 receivables DoH vs. c56 for peers thanks to its cash-and-carry model. Obour Land concentrates on rural areas—Delta and Upper Egypt (75% of sales)—which are less competitive and we believe have higher per capita demand vs. Greater Cairo particularly for carton pack cheese.
Obour Land for Food Industries is an Egypt-based manufacturing company, which is specialized in the production, processing and packaging of white cheese. The Company's products include cheese olive with palm oil, istambolly cheese with palm oil, feta cheese, instanbully cheese, khazin cheese with palm oil, feta cheese with palm oil, talaga cheese, instanbully cheese with pepper, double cream cheese and baramily cheese. Obour Land for Food Industries' products can be found at supermarkets in pack sizes ranging from 80 grams to 500 grams.
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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