Initiate with Overweight: The awakening giant
12M target price of USD18/share implies 32% potential return. The stock trades on a 2017e P/E of 6.4x, 34% below peers and a sharp drop from its 2015e P/E of 16.4x. Bumper award years from Egypt, margin recovery, and deleveraging should drive OC’s EPS (60% CAGR). Our valuation does not give weight to potential infrastructure investments, presenting upside. Margin inflection should be as early as 1Q this year—a key catalyst, in our view. EGP devaluation y-t-d does not concern us, as OC naturally hedges.
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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