Telecom Egypt: the jewel of the Nile (BUY - initiation of coverage)
We initiate coverage of Telecom Egypt (ETEL) with a BUY rating and a price target of EGP 35.7/share, implying 55% upside potential. We find ETEL’s equity story as offering a unique mix of growth and value. The growth story is based on a constructive market outlook, with strong population expansion, structural demographic changes, low services penetration rates and rapidly-growing data consumption, forming solid ground for both volumes and ARPU hikes. Paired with ETEL’s expected expansion in the mobile market, this should result in a 2021-24E EBITDA CAGR of 12%, on our forecasts. The story is also about the attractive valuation (3.9-3.5x 2022-23E EV/EBITDA, at 38-40% discounts vs. its peers), within which its 45% stake in Vodafone Egypt, worth EGP 34.8bn (89% of Telecom’s Egypt market cap), is not fully reflected, we believe. In our view, the hidden value can be unlocked by the monetisation of the Vodafone holding, with media rumours that ETEL could put a 20-25% stake up for sale soon. To us, the key risk to ETEL’s appealing story is not related to the company, but to Egypt, itself, as FX risk has to be taken into account.Telecom Egypt is a telecommunications provider in Egypt and is engaged in the provision of fixed-line services in the Middle East. Co. offers a fixed line and retail telecommunications services and provides wholesale telecommunications services. Co. provides retail telecommunication services including access, local, long distance and international voice, internet and data, and other services. Co. also provides wholesale services including broadband capacity leasing to ISPs, and national and international interconnection services. Co.'s internet and data services include the provision of internet broadband access data transmission services and leased lines.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.