Reiterate OW even with no one-off price hikes
Raise TP by 27% on better margin outlook. We raise 2017-21e EBITDA by an average of 25% p.a. on a higher-than-initially expected windfall from the Ministry of Health (MoH) price hike in Jan-17 when EIPICO’s portfolio saw 97 products (c80% of local revenue) repriced upwards by 50%. 1H17 EBITDA margin widened 8.6pp to 45.6%, inflated by low-cost inventory. Although the company only started to sell in Apr-17 at new prices, we see 1H17 margins as peak and look for a 2018e EBITDA margin of 43.3%, as low-cost inventory is depleted and due to cost inflation. The stock trades on a 2018e P/E of c11x, while our TP implies 13.4x, still below the 20x peer average to account for the government’s strict control over pricing and the stock’s low liquidity.
Co. is principally engaged in the manufacture and distribution of pharmaceutical products locally and for export. Co. currently has 196 products including analgesic, anthelmintics, antibiotics, anticatarrhal, antidepressant, antidysentrics & enterostatics, antihistaminic, cardiasc and vascularetics, cathartics, dermatological, endocrine system drugs, gastrointestinal, general anaesthetic, glucocorticoid, ophthalmic, orodentals, parasympathomimetic, pulmonics, skeletal muscle relaxants, spasmolytics, treatment of grout, urologic, vaginetics, vitamins and miscellaneous.
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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.