Al Ahly Pharos

*Key news articles for today*
 
The Finance Ministry is set to reduce penalties for late tax payments by up to 90% as part of its larger tax relief package, in a move that aims to resolve thousands of disputes resulting from delayed tax return submissions or filing returns without paying the due tax. 

The countdown to the Grand Egyptian Museum’s official opening is on 3 July launch after President Abdel Fattah El Sisi approved the date.

The government sent a high-level delegation to Rabat earlier this week to push for the removal of recent restrictions that have left Egyptian exports piling in Morocco’s ports for two weeks.

Egypt and the UAE kicked off talks for a Comprehensive Economic Partnership Agreement, to strengthen trade, investment, industry, energy, and infrastructure collaboration.

The government is negotiating with the countries of origin to import wheat under the equal deals system, in an attempt to secure its grain stock and relieve pressure on the dollar at present.

The government paid about EGP6 billion in compensation for the Ras El-Hikma area, as part of the compensation and removal plan for the area.

The House of Representatives approved in principle the draft labor law submitted by the government, during a session while discussing the report of the Manpower Committee on the draft.

The government is studying amending the real estate tax law, and the Real Estate Tax Authority has submitted a proposal to raise the tax exemption limit for residential units, which currently stands at about EGP2 million, in light of rising real estate prices and increasing inflation rates. A source said that the limit might be raised to EGP3 - 4 million.

Eroglu Garment, a subsidiary of Turkish clothing manufacturer Eroglu Holding, is investing some USD120 mn in a new integrated garment factory in the Qantara West Industrial Zone.

UAE's Dana Gas has set a plan to invest around USD100 million in Egypt, including drilling 11 wells over the next two years, according to the company's head of investor relations.

ISPH issued positive 4Q24 results where bottom line amounted to EGP208 million that is up by 12.5% QoQ and 4.3x YoY. On an full year basis, 2024 bottom line came in at EGP615 million that is up by 1.9x YoY. ISPH in trading at 2025 multiples of P/E of 8.9x.

EGCH released 2Q24/25 unaudited financial indicators posting a significantly enhanced bottom line of EGP772 million, compared to EGP163 million in comparative quarter and only EGP38 million in previous quarter, which included EGP173 million in real estate revaluation gains. EGCH is currently trading at a 2024/2025e PE of 29.1x.

United Bank (UBEE) 2024 net income after tax jumped 63% y/y, to record EGP 2.8 bn.

CNFN has formed a strategic partnership with Auto Mobility, the official Geely agent, to offer full insurance solutions tailored for Geely vehicle owners. 

Egypt’s financial inclusion rate, the percentage of citizens above the age of 15 who hold bank accounts, mobile wallets, or prepaid cards, jumped to 74.8% by the end of 2024 up from 71% at the end of 2023.

OCDI Board approved merging seven of the company's subsidiaries, with authorized capital of the company post-merger amounting to EGP25.0 billion and paid-in capital amounting to EGP5.2 billion distributed on 1.3 billion shares. 

- Market Overview 

- BTFH

- ADIB

- EFID

- SKPC

- prepared by Mayada Amin- CETA, CFTe

Remittances from Egyptians abroad jumped 51.3% y-o-y in 2024, reaching USD29.6 bn.

Home appliance maker Electrolux has decided to stay in the Egyptian market, scrapping plans to sell its local operations after a final review.

Chinese appliance manufacturer Haier plans to inject USD500 mn over the next five years to expand its industrial complex in Tenth of Ramadan to increase its production capacity 5x.

Cheiron Energy plans to increase its oil and gas output by 33% by the end of 2025, bringing output to 160k barrels of oil and gas equivalent per day.

TMGH (FV: EGP75.00, OW) achieved strong 4Q24 results. Net profit in 4Q24 increased 595.0% y/y and 77.8% q/q to EGP4.4 billion, taking FY24 net profit up 223.6% y/y to EGP10.7 billion. The Board of Directors proposed the distribution of cash dividends of EGP0.25/share, implying a payout ratio of 4.8% and dividend yield of 0.5%.

ORAS (FV: EGP425, OW) announces that it will build the new “Campus 2026” expansion of The American University in Cairo (AUC), Egypt. 

CCAP inaugurated a new herb drying facility for its subsidiary Dina Farms, completing the EGP400 million first phase of the project. CCAP also inaugurated a new EGP27 million production line for glass wool pipe insulation at Glass Rock Insulation, a subsidiary of CCAP’s ASCOM. Both facilities are expected to add USD40 million to export revenues. The company’s export revenues reached USD47.7 million in 9M24.

The monthly supply rates of fertilizers to the Agricultural Credit Association have decreased to 130k tons, compared to 150k tons in the last months of 2024, due to a decline in gas supply to the production companies dealing with the association.

ETRS approved the capital increase of its subsidiary Egytrans automotive solutions to USD1.5 million from USD200 thousand.

- Market Overview 

- ADIB

- ETEL

- ORAS

- SKPC

- PHAR

- Prepared by: Mayada Amin- CETA, CFTe

The Finance Ministry is gearing up to complete its first sovereign sukuk issuance of the year within the next month, with the issuance set to be around EGP2-3 billion.

The Cabinet approved the launch of a EGP30 billion financing initiative to support and finance priority industrial sectors. 

UAE’s AMEA Power signed an agreement with the Egyptian Electricity Transmission Company to develop two battery energy storage systems (BESS) with a combined capacity of 1.5 GWh.

Prime Minister met with Kuwait’s Prime Minister Sheikh Ahmed Al Sabah during his official visit to the Gulf nation, where the two leaders discussed boosting relations between the two countries across various sectors. 

The Central Bank of Egypt sold EGP89.8 billion in t-bills between Thursday and yesterday at average yields between 25.5-29.2%, according to CBE data.

Forty-seven ships changed course this month to pass through the Suez Canal instead of sailing around the Cape of Good Hope, Suez Canal Authority head Osama Rabie said.

Egypt intends to buy electricity produced from wind energy projects which will be implemented by Saudi Arabia’s ACWA Power, south of Hurghada, at a price of 2.4 cents KWH, which will be partially paid in EGP and the bigger bulk in USD, according to a government official.

Government's revenues from Suez Canal declined in 2024 to EGP146.4 billion, as compared to a target of EGP168.45 billion in the state budget. 

The EGX and the Financial Regulatory Authority (FRA) are mulling a regulatory update to either scrap or revise the duration of the lock-up period on the ownership of substantial shareholders post-IPO. 

EKHO released 4Q24 consolidated financial results. Net profit dropped 8% YoY (+14% QoQ) to USD39 million. The BoD proposed a cash dividend distribution of USD0.035/share for FY24. The Board also proposed the distribution of one bonus share for each 20 original shares. EKHO is currently trading at 2025f PE of 5.2x.

EKHO to invest around USD150-200 million in the coming 18 months. 

The Egyptian Refining Company (ERC) intends to conduct a major overhaul of the Mostorod refinery with investments exceeding USD100 million. 

ABUK tapped board member and former transport minister Hany Dahy to head a new steering committee tasked with overseeing the company’s business operations. 

FWRY acquired a 56% stake in Virtual CFO, a financial services and accounting firm catering to SMEs and startups.

MCQE reported solid financial results for 4Q24. Attributable bottom line came in at an impressive EGP176 million (+708% QoQ, +117% YoY), bringing FY24 attributable bottom line to EGP238 million (+151% YoY). The BoD proposed a cash dividend distribution of EGP1.00/share for FY24. MCQE is trading at a FY25 P/E of 18.2x.

EXPA 4Q24 bottom line post minority interest recorded EGP1,265 million (-19% q/q, +15% y/y), bringing FY24 net profit to EGP5,203 million (+54% y/y and 7% higher than Al Ahly Pharos estimate of EGP4,879 million). BoD proposed the distribution of 0.4 bonus share to every original share. EXPA is currently trading at 3.3x P/E 2025 and 0.7x P/B 2025.

QNBE’s general assembly approved paying out a cash dividend of EGP1.50/share out of 2024 earnings.

OLFI’s general assembly approved cash dividend distribution of EGP2.00/ share for FY24, implying payout ratio of 80% and dividend yield of 10.7%.

According to local media, JUFO signed a financing agreement worth more than EGP1.0 billion with Emirates NBD Egypt.

- Market Overview 

- GBCO

- OCDI

- COMI

- ACGC

Prepared by: Mayada Amin- CETA, CFTe

The MPC acted conservatively, deciding to keep rates unchanged at 27.25% for overnight deposit and 28.25% for overnight lending rate, citing global uncertainties and a slower pace of inflation deceleration throughout 2H2024 with increased upside risk to the outlook.

Local gas production dipped to an eight-year low of 4.87 billion cubic feet per day (bcf/d) in 2024, down 16% y-o-y. 

China's North Petroleum Corp. has earmarked USD100 million to acquire new concessions in Egypt or form partnerships to explore for oil and gas in the Western Desert and offshore waters.

The Minister of Tourism revealed that discussions are currently underway with the CBE and the Ministry of Finance to study the possibility of launching a new initiative to support the tourism sector worth EGP100 billion.

The Chairman of the Board of Directors of the Egyptian Commercial Representation Authority revealed a target to achieve exports of USD48 billion by the end of this year, an increase of 20% over last year.

The Financial Regulatory Authority (FRA) will issue a decision regarding the registration and licensing fees for companies subject to the new Unified Insurance Law within two weeks.

The EGX is studying with the FRA a legislative amendment to the listing rules that aims to repeal or amend the clause freezing 51% of the shares of major shareholders in companies when offering on the stock exchange for two years.

After the Listing Committee of the EGX approved the share buyback procedures for ESRS shares, a Special Operations Market (OPR) will be opened from Sunday, 23 February 2025, until Thursday, 6 March 2025 to receive selling orders from all shareholders who wish to sell, at the price of EGP138.15/share. 

HDBK (FV: EGP90.00, OW) FY24 standalone net profit recorded EGP11,040 million (+83% YoY). BoD proposed the distribution of cash dividends of EGP5.00/share, which implies payout ratio of 24% out of 2024 net profit and DY of 9.5%. The bank is currently trading at P/E25 of 2.3x and P/B25 of 0.9x.

CNFN is pursuing regulatory approval to obtain a digital banking license.

- Market Overview 

- TMGH

- ORWE

- OCDI

- AMOC

- prepared by: Mayada Amin- CETA, CFTe

The MPC is scheduled to meet today to decide on policy rates. We believe the CBE might prefer to cut rates by 100-150 bps in its meeting today.

Moody’s kept Egypt’s outlook positive and affirmed its Caa1 rating. 

UK-based Shard Capital and Saudi Arabia-based Alqahtani Holding inked a framework agreement for a USD7 billion petrochemical production complex in New Alamein with the Oil Ministry-backed Egyptian Petrochemicals Holding Company and the Investment Ministry. 

The reconstruction of Gaza can be completed in three years, Prime Minister Moustafa Madbouly said during his weekly presser yesterday. 

Egypt paid another USD1 billion arrears to foreign oil companies yesterday, according to an official..

The Ministry of Petroleum plans to increase Egypt's oil production by 8% during the next fiscal year 2025-2026 to reach 485k barrels per day.

The Egyptian General Petroleum Corporation (EGPC) inked updated agreements with US-based IPR Energy and Tunisian oil and gas firm HBS International worth a combined USD13.5 million.

The Egyptian government allowed the Cheiron Energy company, owned by businessman Salah Diab, to export about 550k barrels of crude oil last January, in exchange for part of its overdue dues to the EGPC.

COMI’s BoD proposed to distribute cash dividends of EGP2.50/share.

ATLC released positive FY24 financial results: 4Q24 bottom line recorded EGP108 million (3.2x y/y, 2.2x q/q), bringing FY24 net profit to EGP216 million (+26% y/y). We have updated our FV for ATLC from EGP5.17/share to EGP6.66/share.  ATLC is currently trading at P/E25 of 3.1x and P/B25 of 0.9x. 

TMGH achieved FY24 sales, including sales made for third parties, of EGP504 billion, up 252.9% y/y.

MFPC signed a cooperation agreement and an MoU with Germany’s ThyssenKrupp to develop a USD220 million carbon capture project, the first of its kind in Africa and the Middle East.

The EGX’s listing committee approved ESRS request to delist its 542 million shares from the bourse.

- Market Overview 

- ABUK

- FWRY

- MFPC

- ORHD

- Prepared by: Mayada Amin- CETA, CFTE