reports
- Marina William
GB Auto: 1Q23 | Another bleeder for the auto business; Capital contin...
RISING PRICES ARE NOT ENOUGH TO COMPENSATE FOR THE SEVERE LOSS OF VOLUMES Consolidated net profit recorded EGP108 mn with a margin of 2.3%, compared to EGP229 mn in 1Q22 with a margin of 29%, and EGP8,714 mn in 4Q22 with a margin if 126.3%. The sequential base difference is due to the capital gain realized in 4Q22 from the divestment of 7.5% stake in MNT-Halan. GB Auto booked another weak quarter held back by the auto business segment. Consolidated revenues recorded EGP4,742 mn compared to EG...
- Marina William
GB Auto: 4Q22 | Capital Dominates The Picture While Auto Takes The Bac...
A&AR SEGMENT CONTINUE TO STRUGGLE; THREE WHEELERS INVENTORY CEASE TO EXIST; GB CAPITAL ON THE ROAD OF GROWTH 4Q22 consolidated revenues came in at EGP6,901 mn, dropping by 23.7% YoY and 4.3% QoQ. The drop is mainly driven by the auto & auto-related segment due to the challenges faced during the quarter. FY22 revenues recorded EGP29,789 mn, a YoY decline of 5.2%. * GB Capital recorded quarterly revenues of EGP2,578 mn (+11.3% YoY, +5.8% QoQ), reflecting a strong performance across subsidiarie...
- Marina William
AUTO | Management Meeting Key Takeaways
GB Auto 2022 updates and 2023 targets * GB Auto management expects 4Q22 revenues to exceeded EGP4.5 bn * Gross profit absolute value for 4Q22 is expected to exceed 3Q22 * 4Q22 PC volumes is expected to be within the 4k units range in 4Q22 * PC GPM went up from 14% in 1Q22 to 23-30% in 4Q22, on a much smaller revenue base, that is driven by prices, rather than sales volumes * Global inflation has driven AUTO’s suppliers to raise selling prices, along with global supply sho...
- Marina William
GB Auto: 3Q22 – Cost optimisation saves the day; GB Capital continues ...
AUTO BUSINESS CONTINUES TO CAST A SHADOW OVER REVENUES DESPITE GROWTH IN GB CAPITAL’S TOP-LINE 3Q22 consolidated revenues came in at EGP7,212 mn, dropping by 13.0% YoY and 7.9% QoQ, backed by the challenging conditions faced by the auto & auto-related segment. 9M22 revenues recorded EGP22,888 mn compared to EGP22,390 mn, a rise of 2.2% YoY driven by a solid previous quarter and heightened YTD prices compared to 9M21. * Revenues for the Auto & Auto-Related (A&AR) business line recorded EGP5,...
- Marina William
GB Auto: 2Q22 – GB Capital steady as a rock; auto segment falters aga...
PASSENGER CARS AND 2&3 WHEELERS CONTINUE TO SUFFER WHILE THE REMAINING LOBS SOAR; GB CAPITAL RUNNING ON A GREEN TRACK 2Q22 consolidated revenues came in at EGP7,834 mn, nearly flat QoQ with a YoY rise of 7.8% from the previously recorded EGP7,269 mn in 2Q21. This performance is a result of strong demand on the company’s offerings and improved pricing strategies across the auto business segment. 1H22 revenues recorded EGP15,676 mn, compared to EGP14,097 mn reflecting a YoY rise of 11.2% drive...
- Marina William
GB Auto: 1Q22 – Sequential performance weakened by seasonality; FX los...
SLOW AND STEADY WINS THE RACE; CHERRY SUPPORTS PC VOLUMES; AFTER-SALES AND REGIONAL SEGMENTS COUNTERBALANCE WEAKNESS Consolidated revenues for 1Q22 amounted to EGP7,842 mn, compared to EGP6,828 mn in 1Q21, showing a YoY rise of 14.9%, and compared to EGP9,047 mn in 4Q21, with a QoQ decline of 13.3%. The annual recovery was backed up by recovering market conditions, in January and February, and healthier consumer demand across all segments compared to 1Q21, as well as higher prices applied dur...
Increased risk weighs on GB AUTO, penalising its rating down to Sligh...
The independent financial analyst theScreener just lowered the general evaluation of GB AUTO (EG), active in the Automobiles industry. As regards its fundamental valuation, the title still shows 2 out of 4 possible stars. Its market behaviour, however, has slightly deteriorated and will be qualified as risky moving forward. theScreener considers that these new qualifications justify an overall rating downgrade to Slightly Negative. As of the analysis date March 29, 2022, the closing price was EG...
- Ahmed Soliman
- Pansee Shalaby
AUTO EY | On a bumpy road; Cut to UW
Downgrade to UW from N. We cut our 12M TP for GB Auto by 27% and 2022e net income forecast by 24%, on: i) mounting pressure on the auto business, given higher inflation, ii) rising interest rates in a highly leveraged business (auto business 2022e net debt/EBITDA at 4.3x), and iii) higher-than-expected Dec-21 net debt in the auto unit of EGP5.1bn. While the stock trades on a 2022e P/E of 6x, a 35% discount to global auto peers and an 18% discount to NBFS peers, we believe there is further downsi...
- Marina William
GB Auto: 4Q21– Solid performance & declining interest expense trickle ...
SOLID PERFORMANCE DELIVERED BY MOST LOBS; COMMERCIAL VEHICLES SALES WITNESSES REMARKABLE GROWTH Consolidated Revenues for 4Q21 amounted to EGP9,047 mn, compared to EGP8,293 mn the previous quarter, a QoQ inline of 9.1%, and compared to EGP7,201 mn in 4Q20, a strong YoY rise of 25.6%. Consolidated Revenues for FY21 came in at EGP31,438 mn, in line with our expectations of EGP29,864 mn and above 4Q20 levels of EGP23,311 mn by 34.9% rise YoY. The solid performance came supported by increased con...
- Marina William
GB Auto: Management webinar key takeaways
2021-2022 FINANCIAL TARGETS * The total passenger car market in Egypt witnessed a strong growth during 2021, growing by 25.2% YoY from 167,792 units in 2020 to 210,000 units in 2021. * Management expects the passenger car market in Egypt to grow at 10-15% for 2022, bringing units sold to approximately 240,000 unit. * GB Auto finished 4Q21 with 13,500 units sold passenger car, bringing the overall volume for 2021 around 45,000 unit, with a market share of 21.4%, compared to 17.7% ma...
- Ahmed Soliman
- Pansee Shalaby
AUTO EY | Cut to N post strong rally, negative developments
Valuation full. GB Auto’s stock rallied by 49% since our latest report in May-21, and more prominently over the past month (+24.7% m-o-m), supported by treasury share purchases. This puts the stock on a 2022e P/E of 4.3x. While this is still over 50% below global auto and NBFS peers, respectively, it is justified, in our view, by the high interest rate environment (auto segment’s 2022e net debt is 3.2x EBITDA) and GB’s limited growth potential (EPS CAGR of 1.2% over 2022-24e vs. 17.7% and 15.5% ...
- Martina Bernaba
GB Auto: 3Q21 – strong sales at lower margins; strategies in place to ...
ROBUST PERFORMANCE ACROSS MOST OF AUTO’S LOBS MAGNIFIES TOPLINE Revenues for 3Q21 amounted to EGP8.293 billion (up 14.1% QoQ and 33.8% YoY); broadly in-line with our expectations of EGP7.931 billion. Revenues for 9M21 came in at EGP22.390 billion, up 39.0% YoY. The increase in revenues reflected solid performances across the majority of GB Auto’s business lines during the quarter as well as improved demand during this period. Revenues for 3Q21 from the Auto & Auto-related (A&AR) division came...
- Martina Bernaba
GB Auto: 2Q21 | Recovering market conditions boosts automotive and fin...
RECOVERY IN CONSUMER PURCHASING POWER SUPPORTS TOPLINE Revenues for 2Q21 amounted to EGP7.269 billion (up 6.5% QoQ and 80.6% YoY); broadly inline with our expectations of EGP7.406 billion. Revenues for 1H21 came in at EGP14.097 billion, up 42.2% YoY. The increase in revenues reflected strengthening consumer demand and improving market conditions across AUTO’s lines of businesses as demand normalizes following covid-19. Revenues for 2Q21 from the Auto & Auto-related (A&AR) division came in at ...
- 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
- Ahmed Soliman
- Enjy Heshmat
AUTO EY | Turnaround story confirmed; Maintain Overweight
Overhangs resolved; Dividend resumption highly positive. We raise our TP by 13.6% to EGP6.00/share and maintain our Overweight call. The latest results confirm the auto business is turning profitable (net profit of EGP117mn on a recurring basis in 2H20 and EGP144mn in 1Q21), after nearly four years of losses, resolving an overhang that has long pressured the Group. GB distributed EGP0.25/share for 2020, representing a dividend yield of 7.4%, on current market price, further confirming that the G...
- Martina Bernaba
GB Auto: 1Q21 – Strengthening of purchasing power boosts A&AR despite ...
HEALTHY REVENUE GROWTH DESPITE LOW SEASONALITY OF THE FIRST QUARTER Revenues for 1Q21 amounted to EGP6.828 billion (up 15.9% YoY but down 5.2% QoQ); slightly higher than our expectations of EGP6.53 billion. The YoY increase came on the back of recovering market conditions across AUTO’s lines of businesses; sequential decline came due to seasonality associated with the first quarter of the year. * Revenues for 1Q21 from the Auto & Auto-related (A&AR) division came in at EGP5.451 billion (up 1...
- Martina Bernaba
GB Auto: 2020 – Solid bottom-line despite pressure on revenues caused ...
MARKET CONTINUES TO RECOVER FOLLOWING THE SLOWDOWN IN 1H20 Revenues for 2020 amounted to EGP23.3 billion (down 8.2% YoY); 6% higher than our expectations of EGP21.9 billion. This is because revenues during 1H20 were significantly affected by Covid-19. On a quarterly basis, 4Q20’s topline came in at EGP7.2 billion (up 16.2% QoQ and 1.5% YoY); higher than our expectations of EGP5.8 billion as 2H20 witnessed exceptional recovery following the slowdown during the pandemic. Revenues for 2020 from ...
- Martina Bernaba
GB Auto: Management webinar key takeaways
2020 ON THE GROUND UPDATE * A&AR segment has achieved and exceeded the guidance for revenue and gross profit margin for 4Q20 which were EGP5.1 billion and 12.8%, respectively. * Bottom-line is expected to be around EGP900 million for 2020, implying 2020 P/E of 4.5x. * AUTO is considering dividends distribution for the first time since 2013. 2021 GUIDANCE * Management expects total market of passenger car market to grow by 10% YoY in 2021. AUTO will focus on increasing its ma...
- Martina Bernaba
GB Auto: 3Q20 – Automotive profitability in green; Provisions pressure...
MARKET RECOVERY BOOSTS AUTO REVENUES GB Auto's 3Q20 consolidated revenue amounted to EGP6,196 million, down 8.5% YoY but up 54% QoQ, and 34% higher than our estimate for the quarter on a broad market recovery following a period of weak demand, dampened by the pandemic. However, the effect of the pandemic is still visible on an annual basis. Revenue from the Auto & Auto-related (A&AR) division came in at EGP4,844 million (-14.5% YoY, +68.1% YoY) as the automotive market recovers sequentially a...
- Ahmed Soliman
- Enjy Heshmat
AUTO EY | Cheap valuation; Auto business to turn profitable in 3Q20
Significant upside, with catalysts. GB Auto trades on a 2021e P/E of 3.24x vs. 13.2x for global automotive peers and 10.5x for NBFS peers, with EPS growing at 33.1% over 2021-22e vs. 29.0% and 21.1% for peers. We look for the company to distribute EGP0.07/share in 2021e, through streamlining cash flows from the financing business, potentially unlocking GB Capital’s value, yielding 2.54% in 2021e and rising to 9.05% in 2022e. GB Auto’s valuation mainly comes from GB Capital, but has long been pre...
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