reports
With a more favourable environment, ELSWEDY ELECTRIC improves to Sligh...
ELSWEDY ELECTRIC (EG), a company active in the Electrical Components & Equipment industry, is favoured by a more supportive environment. The independent financial analyst theScreener has confirmed the fundamental rating of the title, which shows 3 out of 4 stars, as well as its unchanged, moderately risky market behaviour. The title leverages a more favourable environment and raises its general evaluation to Slightly Positive. As of the analysis date December 24, 2021, the closing price was EGP ...
- Zeyad Ahmed
El Sewedy Electric: SWDY 3Q21| Slow down in margins weigh down on bott...
TOPLINE IN LINE WITH ESTIMATES; MARGINS COOL OFF; NET DEBT RISES SWDY reported a neutral set of 3Q21 consolidated results showing an attributable net profit of EGP704 million (below our estimates by 24%, dropping 14% YoY and 21% QoQ). NPM declined to 4.7% (-2.5pps YoY and -1.8pps QoQ). The lacklustre bottom line was a result of weaker margins across all segments except for renewables despite high revenue growth enticed by the wires & cables segment (50% of revenues, +57% YoY, 14% QoQ) and Ele...
- Zeyad Ahmed
El Sewedy Electric: Cables and turnkey revenue growth and margins behi...
SOLID REVENUE GROWTH ALONG WITH HEALTHY MARGINS NET DEBT RISES SWDY reported a robust set of 2Q21 consolidated results showing an attributable net profit of EGP890 million (beating our estimates by 24%), surging by 73% YoY and by 27% QoQ. NPM inched up to 6.5% (+1.0pps YoY and 0.8pps QoQ). The company had a strong quarter on both an annual and quarterly basis owing to strong revenue growth seen across all segments except for renewables and meters. All eyes are on the Wires and Cables segment ...
- Marina William
- Martina Bernaba
- Merna Arafat
- Omar Attia
- Zeyad Ahmed
Egypt: Commodity and material prices update – 2Q21
In this report we assess the average material prices for 2Q21 and depict the impact of pricing trends on the financial performance of the relevant listed equities in Egypt. Prices of raw materials in the food and beverages sector continued to normalize in 2Q21, except for prices of SMP and WMP. Accordingly, we expect a gradual recovery of margins to appear in the 3Q21 results of JUFO, EFID, DOMT and OLFIas price increases kick in and with seasonality of revenues. Most companies have an invent...
ABUK ABU QIR FERTILIZERS & CHEMICAL INDUSTRIES
CCAP CITADEL CAPITAL SAE
EKHO EGYPT KUWAIT HOLDING CO
AUTO GB AUTO
EFID EDITA FOOD INDUSTRIES
JUFO JUHAYNA FOOD INDUSTRIES CO.
OLFI OBOUR LAND FOR FOOD INDUSTRIES
DOMT ARABIAN FOOD INDUSTRIES CO DOMTY
ORWE ORIENTAL WEAVERS GROUP
MFPC MISR FERTILIZERS PRODUCTION CO SAE
SKPC SIDI KERIR PETROCHEMICALS CO
- Zeyad Ahmed
El Sewedy Electric: 1Q21 – Strong start to 2021 led by wires and cable...
WIRES AND CABLES STEAL THE SHOW SWDY reported a robust set of 1Q21 consolidated results showing an attributable net profit of EGP700 million, surging by 75.0% YoY but down by 46.0% QoQ due to seasonality. NPM recorded 5.7% (+2.0pps YoY but -3.0pps QoQ). The company had a strong quarter on annual basis despite weaker sequential performance due to seasonality where Q4 is typically the strongest quarter especially for the Turnkey segment. The key highlight is the Wires and Cables remarkable perf...
- Marina William
- Martina Bernaba
- Merna Arafat
- Omar Attia
- Zeyad Ahmed
Egypt Commodity and Material Prices: Sector outlook and trends – Q1 21...
We present the 1Q21 material prices that are relevant to the petrochemical, consumer and industrial & materials sectors. In our 12-page report, we depict the impact of such changes on the financial performance of listed equities in Egypt. We also present the quarterly breakdown of each sector. Most companies have inventory of raw material that covers somewhere around 2-3 months. The increase in raw material costs is slowing down in 2Q21. Accordingly, we expect the pressure on margins to appe...
ESRS EL EZZ STEEL REBARS
ABUK ABU QIR FERTILIZERS & CHEMICAL INDUSTRIES
EGCH EGYPTIAN CHEMICAL INDUSTRIES
EGAL EGYPT ALUMINIUM CO.
CCAP CITADEL CAPITAL SAE
EFID EDITA FOOD INDUSTRIES
JUFO JUHAYNA FOOD INDUSTRIES CO.
OLFI OBOUR LAND FOR FOOD INDUSTRIES
DOMT ARABIAN FOOD INDUSTRIES CO DOMTY
MFPC MISR FERTILIZERS PRODUCTION CO SAE
SKPC SIDI KERIR PETROCHEMICALS CO
- Zeyad Ahmed
El Sewedy Electric: Valuation Update: Commodity Rally and Executions S...
HEALTHY FINANCIAL PERFORMANCE AND PROMISING EXPANSION PLANS TO DRIVE GROWTH Elsewedy Electric has held ground in 2020 despite challenges caused by the pandemic in 1H20. The company ended the year with a stable topline figure of EGP46,402 million in FY20, down by 0.5% YoY. The bottom line was negatively impacted by lower margins and recorded EGP3,028 million, dropping by 24.7% YoY but has beaten our estimates by 15.7%. We expect the company to deliver topline growth of 11% in FY21 recording EG...
- Zeyad Ahmed
Elsewedy Electric: Management webinar key takeaways
On the ground updates * The management is very optimistic on 4Q20 results and hopes it would be one of the best quarters in such a challenging year. They are also very optimistic about 2021 especially since there are no signs of lockdowns in Egypt and everything is operational, and all their factories are operational too * Management has stressed that they were confident that the relatively weak performance seen in 2Q20 won’t persist and they expected 2H20 to see a recovery which indeed...
- Zeyad Ahmed
El Sewedy Electric: 3Q20 – Turnkey is the highlight, Cable volumes and...
STRONG SEQUENTIAL PERFORMANCE LED BY THE TURNKEY SEGMENT SWDY reported a strong set of 3Q20 consolidated results showing an attributable net profit of EGP818 million, slightly down by 1.4% YoY but significantly up by 59.0% QoQ, NPM increased to 7.2% (+0.8pps YoY and +1.7pps QoQ). The company had a remarkably strong quarter which saw strong performance across most segments but the turnkey’s performance significantly stood out on 15.3% sequential growth in revenues and robust GP margin of 16.4%...
- Zeyad Ahmed
El Sewedy Electric: Lower cable volumes and slower executions balanced...
MARGINS AND RENEWABLES CUSHION THE DROP IN CABLES VOLUMES SWDY reported 2Q20 consolidated attributable net profit of EGP514 million, down 44.8% YoY but up 28.5% QoQ. Despite the sequential drop in revenues and the absolute value of gross profit in all segments except for meters and renewables, the bottom line has seen improvements mainly driven by 1) higher gross margin and lower SG&A spending and other operating expenses, 2)higher other operating revenues, 3)higher net interest income of EGP...
- Radwa Elswaify
MSCI Quarterly Rebalancing: Thoughts on Egypt constituents
Our full report contains our analysis of MSCIEM Index rules and its application on constituents from Egypt, both for the Standard Index and Small Cap Index. Below are our key conclusions: SWDY Facing Risk of Exclusion; HRHO Is Replacement Candidate On the last ten business days of July, if SWDY dropped more than 50% below Market Size-Segment Cutoff, then the stock will face exclusion. If, on that same relevant date, HRHO's free-float market cap surpassed SWDY's free-float market cap, then HRH...
- Mark Adeeb
El Sewedy Electric: We've seen better days
COMPANY LIKELY TO SHELF EXPANSION PLANS In light of the current circumstances, we expect the company to reduce or even completely put on hold its expansion plans in an attempt to reserve cash and boost liquidity. Our previous buy call rested on growth driven primarily by 1) the turnkey segment and 2) acquisitions. GROSS PROFIT/TON TO DIP BELOW THE USD700 MARK We previously expected wires and cable segment to slightly decline in FY20 on the back of strengthening EGP and weakening commodity pri...
- Ghada Alaa
- Michel Said
MENA construction sector | All eyes on Saudi’s long-awaited rebound
Saudi construction market to outperform, replenishing the region’s backlog. 2019 marks a strong comeback for the Kingdom, with 2019 y-t-d award intake recording an 82% hike to USD29bn, boosted by aggressive investments in the oil, gas, and water segments. This represents 38% of MENA 2019 y-t-d new awards of USD75bn (-13% y-o-y), compensating, to a large extent, for the 40% and 70% drop in the UAE and Egypt’s awarded projects. The Kingdom’s 2019-20e pipeline includes USD70bn worth of projects (ou...
- Ahmed Alaaeldin
- Ghada Alaa
Discounted valuation, despite margin pressures
Cut TP by 20%; Maintain OW, on discounted valuation. Elsewedy underperformed EGX 30 by 23% y-t-d. Following a year of margin normalisation, we expect 2019 will still see some pressure on the company's profitability, with growth resuming starting 2020e, as execution ramps up from a sizable turnkey backlog (+92% y-o-y in 2018a). We cut our 2019 and 2020 net profit estimates by an average of 23%, to reflect higher-than-expected margin deterioration and declining interest income, on a sizable one-of...
- Ghada Alaa
Beyond an Egypt story; Upgrade to Overweight
Compelling valuation post sell-off. Post its MSCI EM inclusion in May-18, SWDY’s stock price continued losing steam, shedding c31% off its peak in April-18. The market’s focus on the normalisation of profits from the high base in 2017, as low-cost inventory depletes, overshadowed the robust re-rating in operations, in our view, with a 2015-2019e NI CAGR of 45% (2015 is a normalised base year prior to one-off inventory gains). The stock trades on a 2019e attributable P/E of 7.7x, reflecting a siz...
- Alia El Mehelmy
Growth losing steam after a stellar 2017
Government plans to pursue non-thermal power generation lead to TP hike, but stay Neutral post rally. We raise our 12M TP to EGP165/share. This is a notable increase from our previous TP (EGP96/share) on the back of: i) continued follow-through by the Egyptian government on additional electricity generation projects, despite now enjoying a surplus (FY18/19e capacity utilisation at 43%), and ii) robust 3Q17 cash generation, thanks to low-cost cable inventory and a weaker-than-expected EGP. Howeve...
- Alia El Mehelmy
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...
- Fatma HADDAD
Sustained profitability
During Q3 2016, ElSewedy Electric’s revenues improved by 9.9% yoy to EGP4.874bn, mainly pulled up by the Turnkey Projects division which saw its revenues rise by 64.5% yoy to EGP1.684bn, representing 34.5% of total sales vs. 23% a year ago. The operating costs decreased by -0.1% to stand at EGP3.708bn, i.e a contribution of 76% to Q3 2016 revenues against 83.7% in Q3 2015, leading the gross margin to reach 23.9% vs.
On the right way
ElSewedy Electric recorded impressive Q1 2016 figures. The company’s revenues jumped by 17.9% yoy to reach EGP4.693bn. Although operational costs increased by 9.54%, representing 79.9% of revenues (vs. 86% in Q1 2015), the gross margin stood at 20.08%, an improvement by 610 bps compared to Q1 2015, thanks to the significant sales enhancement. The net result is in a continuous progress, it has almost tripled, hitting the peak of EGP767.727m, compared to EGP267.714m recorded in Q1 2015 and EGP12...
- Alia El Mehelmy
More EPS growth this year, yield a new feature
Raise 12-month target price by 12% to EGP65. Our new estimates put the stock on a 2017 P/E of 4.5x, reflecting strong turnkey awards and local spending on transmission. The turnkey division’s robust growth trajectory, alongside low capex needs and weakened metal prices, leads us to expect a dividend yield of 9%, a new, developing, feature to Elsewedy Electric’s story. Catalysts include: new awards, USD:EGP devaluation and financial closure ofthe USD75mn solar project (due by end-2016). The solar...
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