Pre-Trading Thoughts

Al Ahly Pharos

PMI improved slightly in April to 46.9 up from March's 46.5, but still remained below the 50.0 threshold that separates growth from contraction, as non-oil private sector activity contracted as the Ukraine war added to cost pressures.

Net International Reserves inched up to USD 37.12 billion at the end of April, from USD 37.08 billion a month earlier.

The details of the FY2022/23 budget include total revenues projected at EGP1.5 trillion, +16.7% YoY; total expenditures expected at EGP2.07 trillion, 15.6% YoY; Overall deficit at 6.1% of GDP; Primary surplus is projected at 1.5% to GDP in FY2022/23; Debt to GDP at 84% in FY2022/23; Government to raise EGP6 billion from the government IPO program and plans to issue international bonds worth EGP91.5 billion, and borrow EGP55 billion from international financial institutions.

Cabinet and CBE are discussing ways to facilitate importation of strategic goods and production requirements.

Prime Minister issued a decision to amend some Egyptian Accounting Standards to account for the recent change in the FX rate. FX gains and losses will be recognized within "Other comprehensive income."

US government issued a "Reconsider travel to Egypt due to terrorism" warning to its citizens, in light of the Saturday's terrorist attack in Sinai.

The amount of money raised through the 18% CDs reached EGP627 billion since issuance.

OPEC+ countries decided to increase the daily oil production through June to 432 thousand barrels amid fear of Russian supply interruption due to European Union sanctions. The decision also considers the Chinese lower demand due to the pandemic closures. Brent accordingly hit USD112.73/bbl.

ABUK released positive 3Q21/22 net profit after taxes at EGP3,761 million (2.95x YoY). On an annual basis, net profit after taxes for 9M21/22 came in at EGP6,965 million that is up 1.85x YoY. ABUK is trading at 2022 P/E multiple of 5.3x and EV/EBITDA of 2.8x.

General authority of land and dry ports intends to launch a tender for the establishment and operation of Tenth of Ramadan dry port with an expected investment of EGP2.0 billion. (SWDY, ORAS)

AMIC: March’s passenger car sales recorded a 3% YoY decline and 3.8% MoM decline to reach 18.9k unit. 1Q22 sales hit 55.5k unit, higher YoY by 9.4%. GB AUTO market share reached 16.5% in March, declining by 6.5% ppt and 4.5% ppt.

FRA approved AUTO’s request to cancel 8.5 mn shares treasury shares.

Car dealers are facing losses due to a recent decision by the Consumer Protection Agency to clamp down on the overpricing of cars, through setting retail prices by the importer or assembler.

ADCI released 9M21/22 initial financial indicators. Bottom line declined by 15.6% YoY to reach EGP69 million in 9M21/22, compared to EGP81 million in 9M20/21. On a quarterly basis net profit fell significantly recording a net loss of EGP45.7 million in 3Q21/22, compared to a net profit of EGP22.9 million in 3Q20/21. This decline is partially driven by muted sales due to insufficient raw materials/inventory for some of the products, in addition to the increase in cost of production and other expenses. ADCI is trading at FY2021/2022f P/E of 3.5x and EV/EBITDA of 1.9x

CPCI released 9M21/22 net profit EGP151 million (+46.7% YoY); On quarterly basis net profit witnessed a spike of 92% YoY to record EGP69 million in 3Q21/22. CPCI is currently trading at FY21/22f P/E of 4.5x and EV/EBITDA of 2.1x.