reports
- Mariam Wael
MM Group: Blurred Outlook for 2022 on Macro Uncertainties, Downgrade F...
IMPORT RESTRICTIONS PRESSURE SALES PERFORMANCE MTIE reported 1Q22 revenues of EGP1.94 billion, compared to EGP2.51 billion in 1Q21 and compared to EGP1.93 billion in 4Q21 (-22.9% YoY, +0.8% QoQ). During 1Q22, sales growth was significantly impacted by import restrictions and supply chain challenges. During 1Q22, sales growth was negatively impacted by weak mobile segment performance (-23% YoY) along with a significant drop in auto sales to stand at EGP196 million (-67.7% YoY), contributing 10...
Increased risk weighs on MM GROUP FOR IND, penalising its rating down...
The independent financial analyst theScreener just lowered the general evaluation of MM GROUP FOR IND (EG), active in the Industrial Machinery 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 February 15, 2022, the...
- Mariam Wael
MTIE: Management Webinar Key Takeaways
HEALTHY PERFORMANCE IN 2021 DESPITE CHALLENGES CONSOLIDATED GUIDANCE FOR 2021: * Revenues of around EGP9.0bn (+6% YoY), * Net profit of EGP400 mn (+10% YoY), implying a NPM of 5%. Consumer Electronics: The Egyptian smartphones market showed a healthy performance, growing at 26% YoY in 9M21, to reach EGP44.0 bn. Management expects 2021 smartphones sales value to cross the EGP60.0 billion mark, registering a growth of 22% YoY in 2021. Management expects market to grow organically by ...
- Mariam Wael
MM Group: Weak Seasonality of Auto and Huawei Caps Revenue Growth; Alp...
WEAK SEASONALITY OF AUTO SALES AND HUAWEI MOBILE CAP REVENUE GROWTH MTIE reported 3Q2021 revenues of EGP2.24 billion (in line with our estimates of EGP2.20 billion), compared to EGP2.21 billion in 3Q20 and compared to EGP2.32 billion in 2Q21 (+1.6% YoY, -3.4% QoQ). During 3Q21, sales growth was capped by weak Huawei performance on lack of product availability and a weak seasonality for auto sales. During 9M2021, revenues recorded EGP7.08 billion, compared to EGP6.55 billion, an increase of 8....
- Mariam Wael
MM Group: Healthy performance driven by favorable revenue mix
CONSUMER ELECTRONICS AND AUTO SEGMENTS SUPPORT REVENUE GROWTH AMID WEAK TELECOM REVENUES MTIE reported 1Q2021 revenues of EGP2.51 billion, compared with EGP2.23 billion in 1Q20 and compared to EGP2.13 billion in 4Q20 (12.7% YoY, 18.1% QoQ), and slightly higher than our estimates of EGP2.40 billion. During 1Q21, sales performance is driven by consumer electronics sales (14.7% YoY, 7.8% QoQ), and auto segment sales (33.5% YoY, 101.4% QoQ), offsetting weak telecom sales (-25.2% YoY, -15.7% QoQ)....
- Mariam Wael
MM Group: Muted revenue growth; E-payments business is mostly priced i...
MUTED REVENUE GROWTH ON WEAK CONSUMER AND ELECTRONICS ALONG WITH FLAT AUTO REVENUES MTIE reported 2020 revenues of EGP8.68 billion, a decline of 11.7% YoY, in line with our expectations of EGP8.64 billion, where weak sales performance is driven by weak market dynamics and covid-19 implications on global trade activities, where MTIE faced some shortages in supply in 2020, mainly for Huawei mobiles and in the Automotive segment, which is attributed to the global wide implemented lockdowns and t...
- Mariam Wael
Management webinar key takeaways
On the Ground Update and 2020 Overview * 2020 financial performance: Standalone revenues are expected to record a decline of 10% along with NPM of around 5%, where consolidated revenues are expected to record a decline of 10% YoY and a NPM of around 4%, bringing 2020 net profit to EGP354 million, a decline of 23% YoY, which is slightly lower than our expectations of EGP368 million. * MTIE faced some shortages in supply in 2020, mainly for Huawei mobiles and in the Automotive segment, wh...
- Mariam Wael
MM Group: Sales recover gradually, alpha is in the digital payments ar...
Sales recovers gradually, capped by weak auto sales MTIE reported 3Q20 consolidated revenues of EGP2.21 billion (-7.6% YoY, +4.6% QoQ). The annual decline in sales can be attributed to weak auto sales during 3Q20, on the back of seasonality, since the third quarter usually witnesses the marketing for new year models (introduced in 4Q), which accordingly postpones some purchases. The quarterly performance witnessed gradual recovery in the consolidated consumer and electronic segment, recording...
- Alaa Tolba
- Mirna Mohsen
MTIE EY | A well-diversified portfolio set to unlock value; OW
A promising agile strategy, despite 2020e hurdles. Delays in Samsung and Nokia launches globally to end 4Q20, amid the COVID-19 induced turbulences, weighed on consumer electronics (CE) 2020e revenue (-17% y-o-y), overshadowing MTI’s diversification strategy. Yet, we highly rate MTI’s efforts to branch out via adding high-margin products under its CE portfolio and expanding its retail presence (CE’s K-mobile, +1 auto showroom, and VFE shops). This, along with resumption of mobile launches, shoul...
- Mariam Wael
MM Group: Healthy performance despite lockdown challenges
Modest quarterly sales drop despite restrictions MTIE reported 2Q20 revenues of EGP2.11 billion, compared to revenues of EGP2.45 billon in 2Q19 and compared to revenues of EGP2.23 billion in 1Q20 (-13.8% YoY, -5.5% QoQ). The annual decline in sales can be attributed to the shutdowns, given that 2Q20 has been the peak of curfew, stores closures, movement restrictions and new car licensing stoppage along with the month of Ramadan and a ten-day Eid break which are usually slow periods of sales. ...
- Mariam Wael
MM Group: Q1 20 – Covid-19 hits operations; positive developments in...
Sales drop across the board with the exception of auto segment MTIE reported 1Q20 revenues of EGP2.23 billion, compared to revenues of EGP2.90 billon in 1Q19 and compared to revenues of EGP2.10 billion in 4Q19 (-22.9% YoY, +6.5% QoQ). The annual decline in sales can be attributed the delay of introducing new Samsung and Huawei mobile models amid Covid-19 pandemic, since the introduction of new models was posponed to 3Q20, along with lower sales during March on the nation wide curfew, movement...
- Diyar Hozaien
Egypt consumer discretionary: On the ground update
Automotive sales squeezed by covid-19 lockdown and car licensing suspension * Passenger car (PC) prices have witnessed price discounts since the beginning of the year, largely owing to the appreciation of the EGP and the full elimination of customs on Turkish and EU-sourced vehicles. Subsequently, AMIC recorded that Egyptian PC sales saw a 10% YoY increase in volumes in January 2020. While February 2020 sales figures are yet to come out, local sources noted that the month saw a higher rate o...
- Khaled Sadek
A sweet spot to capitalise on market dynamics
Reaping benefits of a well-selected product portfolio. We raise our TP of MTI by 10% to EGP13.8/share, as we roll over our model, consolidate Kanawat (ownership up to 69% in 4Q18 vs. 37.5%), and turn more bullish on the Auto business. We reiterate our Overweight call, looking for robust earnings growth of 55% in 2019, on growing market share for Huawei, margin normalisation for Samsung, on better managed inventory, and higher demand for luxury cars, post the Jan-19 tariff cuts. MTI trades in lin...
- Khaled Sadek
ST headwinds, but still see value; Reiterate OW
Diversity to hedge against short-lived headwinds. MTI’s ongoing strategy to widen exposure to lower income brackets will help it withstand the shift in demand to lower-price-point SKUs, in our view. We cut MTI’s core business valuation by c7% to account for expected prolonged pick-up in consumption of discretionary products, as consumers rationalise spending. Our TP remains, nonetheless, at EGP12.8/share, as we opt to value MTI’s investments (c21% of TP) on a mixture between peers’ multiples and...
- Khaled Sadek
Efficiently growing revenue sources; Reiterate OW
Raise TP by 23% to EGP16/share. We raise our 2018-20 EBITDA by 20% on average, as we factor in the Bosch distribution agreement, Huawei’s strong outperformance, and higher traffic expected from revising Vodafone’s agreement. MTI’s ownership in non-banking financial services platforms (o/w c12% in Masary, 45% in Bee; combined has c46% of e-payment market in Egypt) is an upside to our valuation (we value investments at book). Despite the stock’s sharp 6M rally (+73% vs. EGX30 +11%), MTI remains ch...
- Khaled Sadek
A cheap play on all consumer outlay levels, initiate at Overweight
65% upside potential. MTI is a leading multi-brand distributor of consumer goods (mainly mobile phones) with access to c40k PoS across Egypt. It has an offering covering a wide price-point array (EGP5 to EGP10mn), via non-exclusive distribution agreements. Another feature is the planned roll-out of consumer finance alongside existing e-payment services addressing affordability pressures and stimulating volumes. The stock trades on a 2018e P/E of 7.3x (c12x on our TP) vs. 13x for peers, and offer...
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