An attractive entry point unfolds - Overweight
Buying opportunity. TMG shares lost 7.1% in the last three sessions (vs. -1.8% for EGX30), after Prince Al-Waleed bin Talal was indicted as part of KSA’s anti-corruption probe on 4 November, giving rise to concerns about links between TMG and the Prince’s investment group - Kingdom Holding (KHC) - which owns a c45% stake in Four Seasons Hotels Ltd. However, all TMG’s hotel assets, valued at EGP2.33/share, are now wholly-owned by TMG, and we see no other links that would affect our valuation. We therefore flag current levels as an attractive entry point. To illustrate, even if hotel assets are entirely removed, although this would be an exaggerated scenario, in our view, our valuation would still carry c10% upside. TMG currently trades at an EV of cEGP1.0k/sqm, a c17% discount to Egyptian peers and a c30% discount to the average for active developers in Egypt.
Talaat Moustafa Group is the a community real estate developer in Egypt, with a land bank of 50 million square meters. Co. is engaged in "community development" through establishing self-sustained residential city and community complexes for the upper and middle classes. Co.'s prominent development projects include Al Rehab City, East of Cairo, and the "Madinaty" project spanning over 33.6 million sqm of land with 600,000 target residents. Co.'s developments also include compounds such as May Fair in Al Shourouk, East of Cairo and Al Rabwa I & II in Six of October City, West of Cairo. Co.'s activities also extend to the hotels and resorts.
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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