Pre-Trading Thoughts

Al Ahly Pharos

The CBE decided to keep the current key interest rates unchanged in its meeting held on Thursday. The CBE attributed its decision to the easing inflationary pressures, among other factors.

The IMF is currently conducting the third review of Egypt’s expanded USD8 billion loan program.

UK-based and Africa-focused petroleum firm Vivo Energy has reportedly submitted an offer of around USD100 million for 174 gas stations currently owned by state-owned fuel retailer Wataniya.

The government has reportedly instructed ministries and associated agencies to exchange any USD they have with the CBE for EGP. Any ministry or agency that needs to source foreign currency will need to approach the CBE with the equivalent amount in EGP to gain access to FX, according to the outlet.

Trading of treasury bills will be made available through brokerage firms on the EGX within the next three to four months.

Oil Ministry needs an additional USD300 million per month in order to import the energy needed to put an end to the power cuts.

Energean raised its targeted investments in exploration and development in Egypt during 2024 to USD40-60 million from USD30-50 million in 2023.

The Minister of Environment revealed that negotiations are underway with international partners to provide new financing to Egypt worth USD1 billion to confront climate changes.

HELI (FV: EGP18.84, OW) selected MASR (FV: EGP5.24, OW) as the co-developer of HELI’s 491 feddan land plot in New Heliopolis. The project is expected to generate total revenue of EGP194.4 billion over 12 years.

HRHO 1Q24 net profit after tax and minority interest recorded EGP1,821 million (+124% q/q, +110% y/y). The stock is currently trading at 7.0x P/E24 and 0.9x P/B24.

EGBE 1Q24 standalone net profit pre-appropriations recorded EGP537 million (+70% y/y, +47% q/q). We reiterate our Overweight recommendation on EGBE on an updated FV of USD0.54/share, up from USD0.32/share. EGBE is currently trading at P/E24 of 2.9x and P/B24 of 0.7x.

We raised our FV for EFID to EGP46.17/share from EGP40.29/share, to factor in:

• Updated macro assumptions.
• Higher revenue growth on the back of price increases amid this inflationary environment in addition to ramp up in volumes given the company’s capacity expansion plan.
• Margin recovery given price increases and cooling down in raw materials costs.
• EFID is currently trading at a FY24 P/E of 9.4x and an EV/EBITDA of 6.8x.

DOMT reported 1Q24 full financials. Net profit of EGP153.3 million (+1.3% YoY, +53.2% QoQ). DOMT is currently trading at 2024f P/E of4.9x and EV/EBITDA of 3.4x.

The Ministry of Transport extended the construction and execution of the second and third lines of the high-speed electric train network for another three years, to be finalized in 2030 instead of 2027.

The FRA gave a nod to SCEM to proceed in its issued capital increase through a rights issue from EGP1.33 billion to EGP3.01 billion by EGP1.68 billion distributed over 168.2 million shares at a par value of EGP10/share.

ICT solutions firm, Digitize for Investment and Technology, moved to EGX’s main market.