Portfolio potential beginning to unfold, more catalysts on the horizon
Reiterate Overweight, target price unchanged. We remain upbeat on the stock due to its strong upcoming pipeline in terms of presales and deliveries. This is the case despite i) downgrades to our immediate presales forecasts on Porto Heliopolis delays (FY16e: EGP2.7bn, cut by 12%; FY17e: EGP2.9bn, cut by 26%) , ii) extending sales by 2-3 years across most projects on the back of 9M16 performance, intensifying competition, and lower affordability after the EGP floatation, alongside iii) hikes to discount rates (up 4-5pp) offset by iii) a more bullish 2016e-2019e stance on pricing (average CAGR of 12% vs. 4% previously) for Porto October and Porto Heliopolis, two of the core valuation contributors (45% of TP).
Porto Group Holding SAE is an Egypt-based holding company. It is engaged in the following segments through its subsidiaries: education, marketing, real estate, investment and management.
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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