Headwinds priced-in, dividend yield attractive
Overweight after recent weakness, export upside and yield. We trim our 12-month TP by a marginal 5% to EGP20/share to reflect fees imposed on sales from free zone facilities (c26% of top line) and as we turn more cautious on the pace of export rebate collection given 9M17 progress (2018e rebate proceeds-to-export sales of 2.5% vs. the historical run-rate of 5%). Our 2018 EPS estimate (-6% y-o-y) is 15% below guidance on lower margins as we assume EGP appreciation (USD:EGP rate of 16 in 2018e) will drag on export business. However, we see 25% upside and reiterate our Overweight rating after recent share price underperformance; the stock offers 8.8% dividend yield in 2017, based on management guidance and our forecast, among the highest in our Egypt universe and vs. an EGX average of c5%.
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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