Remain Neutral, story could turn
Challenges may be ahead, yet not visible. 2Q17 results gained support from low-cost cable inventory, similar to 1Q17, in addition to strong metre sales volume and margins. Consequently, we raise our 12M TP by 12.9% to EGP96/share. While the stock’s sustainable P/E of 6x is 14% lower than its historical 1-year forward, we remain Neutral given: i) the need to demonstrate capacity in replenishing turnkey backlog, ii) high emphasis on collection of receivables (totalled EGP19bn in 2Q17), in addition to iii) risk of cost inflation eroding margins.
EI Sewedy Electric establishes and operates a production facility for power cables, transformers, terminators, joint accessories, copper and aluminum terminators either coated or not coated production. Co. is engaged in designing, building, managing, operating and maintaining power generation units and power nets. Co.'s activities can be divided into three segments: Power and Special Cables; Turnkey; Electric Products and Accessories.
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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