Downgrade to Underweight on unjustified rally
Rally lacks fundamental catalysts. The stock’s 1M outperformance (21% vs. EGX30), is mainly due to anticipated gains from EGP-flotation, news that the state IPO programme will include a secondary offering in Sidpec, and also as the company previously announced that it is studying the feasibility of a polypropylene (PP) plant and/or an MDF plant. No details on either of these projects were disclosed though, and it is therefore too early to assume value accretion. We raise our 12-month target price by 14% to EGP16.5/share on higher oil price estimates and USD:EGP FX rate in 2017e (16.2 from 14.2), but this is still 22% below the current share price, hence our rating downgrade from Neutral to Underweight.
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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