Overweight on robust recovery and expansions
Remain buyers on 2018 expansions. eXtra issued guidance of 3 new stores in 2018, ahead of our expectations of 1 store. We raise our 2017-18 capex by 29% to factor in higher space additions (+6.5% y-o-y), supply chain and online store investments. This should drive 2017-19 EPS CAGR of 12%, coupled with a sustained recovery in margins and store yields. Therefore, we raise our 12M TP by 13% to SAR58/share as we roll-over our DCF, on 23bps higher EBITDA margins. The market sell-off offers a good entry point, as eXtra trades on 2018e P/E of 12.2x, 15% below peers, despite its better growth outlook. Costs should remain contained thanks to eXtra’s cost cutting measures and better sales mix, mitigating any cost pressures.
United Electronics Company JSC is a Saudi Arabia-based joint stock company engaged in the retail of consumer electronics, appliances, communications and solutions. The Company distributes: Television and Audio, which includes plasma, Liquid Crystal Display (LCD), projectors, home theater, and Digital Video Disc (DVD) players; Computing, which includes laptops, net books, tablets, printers, data storage and accessories; Mobile Communications, which includes a range of mobile handsets and smart phones; Digital and Audio Imaging, which includes digital and professional cameras, photo smart printers, Global Positioning System (GPS) and accessories; Gaming, which includes consoles and gaming software; Home Appliances, which includes refrigerators, washing machines, air conditioners, cookers, dryers, and dish washers, as well as Small Appliances, which includes microwaves, vacuum cleaners, cooking appliances and personal care.
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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