Pre-Trading Thoughts

Al Ahly Pharos

ORHD| Your USD-Based Asset Pick

ORHD (FV: EGP20.38, OW) is one of our top picks in light of the usual rush to real estate as a store of value amid potential EGP depreciation, especially since units and land in El Gouna are priced in USD, and the company’s exposure to incoming tourist arrivals, fueling its recurring income portfolio by virtue of its hotel business and commercial town management business. We select ORHD given the following points:

• Solid sales; 2023 witnessed impressive sales and we expect 2024 to witness growth in sales.
• Exposure to increase in tourism.
• Large residual land bank; we estimate ORHD’s residual land area at around 22.8 million sqm, rendering it one of the largest across the sector.
• Stock offers one of the widest valuation gaps among sector peers at 65.8%.
• Stock trading at one of the lowest FY24 P/E multiples among sector peers at 5.7x.
• Stock trading at one of the lowest FY24 EV/EBITDA multiples among sector peers at 3.7x.

An IMF team is currently in Cairo for ongoing discussions on the first and second reviews of Egypt’s reform program.

Egypt’s budget deficit recorded 4.95 percent of GDP during the first half of FY2023/2024, July-December 2023.

Moody's revised its outlook on Egypt to "negative" from "stable". On another note, Moody's expects Egypt's IMF program could reach USD10 billion.

IDSC has initiated the first comprehensive national dialogue sessions on the document that outlines the key strategic directions for the Egyptian economy in 2024/2030.

Egypt's issuances of government debt instruments in local currency jumped by about 59% in 1H2023/24 to record up to EGP2.7 trillion.

El-Sisi approved a JPY100 billion loan to fund the first phase of the Cairo Metro Line 4.

ESRS (FV: EGP97.02, OW) raised its rebar price, for the third time since the beginning of the year, by EGP3,800/ton to EGP48,300/ton as of 20 January 2024.

ETEL (FV: EGP51.00, OW) intends to roll out 5G network by the end of the year and trial operations within the coming three months, according to local press.

ETEL denied the submitted offers related to tower sales and is currently in negotiations with another four entities, according to local press.

NBE lowered credit card limits on foreign exchange transactions executed at home and abroad.

The new high-yield CDs have attracted a combined EGP380 billion in NBE and Banque Misr as of last Thursday.

COMI has rolled out a trio of fixed high-yield three-year certificates of deposit (CDs).

The CBE is extending the deadline requiring banks to provide 25% of the credit facilities portfolio to SMEs and 10% to finance small companies for an additional year ending 31 December 2024.

KIMA is in talks with a consortium of banks to increase a syndicated loan from EGP4 billion to EGP7 billion. The loan will be used to finance the investment cost of the rehabilitation of the company's old factory in Aswan.

NBE and Banque Misr, which collectively own 20.8% of Alexandria Specialty Petroleum Products Company (ASPPC), are studying the sale of their stakes to EGPC.

The government is studying the establishment of a phosphate fertilizers complex in Qena governorate.

GB Corp’s automotive assembly and distribution unit GB Auto has inked an EGP1.2 billion long-term financing agreement with a banking consortium led by Banque Misr.

OLFI announced a price increase in its cheese products for the second time this year ranging from EGP20-83/pack.

Supreme Holding has formed a joint venture with an undisclosed British company that will invest USD30 million into setting up four animal feed factories in 10th Ramadan City.