Pre-Trading Thoughts

The CBE is preparing to launch a new index which links the Egyptian Pound with a basket of international currencies and gold with various weights in order to determine a more realistic exchange rate instead of depending solely on the USD.Misr Life Insurance finalized preparations to offer 45% of its shares in IPO.Investors will be able to bid for industrial land from Wednesday, 16 Aug, through Wednesday, 27 Sep, under a new phase of the IDA investment map. The government is in talks with Actis in a bid to convince it to pay USD 600-800 million for the 580-MW Gabal El Zeit wind farm. The Finance Ministry will pay out a third batch of export subsidies under the sixth of the program today and tomorrow. SKPC (FV: EGP22.8; EW) 2Q23 net profit recorded EGP689 million (+218% YoY). 1H23 net profit increased by 159% YoY to EGP1.2 billion. We changed our recommendation to Equalweight from Overweight. SKPC is currently trading at a 2023e PE of 7.1x. Total exports of the sector amounted to USD1.3 billion during 1H23, down 20% y/y.Natural gas futures surging 13% yesterday. ORWE (FV: EGP18.50, OW) 2Q23 net profit recorded EGP290 mn (+37.3% YoY). The company did not receive any export rebates for the second quarter in a row. ORWE is trading at a FY23 P/E of 5.6x.DSCW (FV: EGP0.57, OW) 2Q23 standalone net profit recorded EGP105.8 mn for the quarter ( +260.3% YoY). DSCW is currently trading at a FY23 P/E of 4.8x.STC renews interest in acquiring a stake in Vodafone Egypt, according to local press.EFIH (FV: EGP23.50, OW) 2Q23 net attributable profit surged to EGP436 million (+56.2% YoY). EFIH is currently trading at 2023f P/E of 28.7x.EMFD (FV: EGP5.01, OW) reported weak 2Q23 results, with revenue reaching EGP3.8 billion, down 14.0% y/y. HELI (FV: EGP12.44, OW) reported weak 2Q23 revenue of EGP134.2 million, down 91.0% y/y, bringing 1H23 revenue down 85.4% y/y to EGP225.1 million. OCDI (FV: EGP23.30, OW) intends to open a sales center in the UAE.EGTS (FV: EGP1.68, EW) reported 2Q23 net loss of EGP46.8 million, compared to 2Q22 net loss of EGP3.5 million.ARAB (FV: EGP0.65, EW) reported solid 2Q23 sales of EGP1.2 billion, up 99.7% y/y, bringing 1H23 sales up 174.6% y/y to EGP2.5 billion. AMER reported a 5.8% y/y increase in 1H23 revenue to EGP651.8 million and a 46.5% y/y increase in 1H23 net profit to EGP18.0 million.BINV (FV: EGP23.50, OW) released POSITIVE 1H23 results where the bottom-line recorded EGP385 million which is 6x more than the bottom-line in 1H22. BINV is currently trading at annualized P/E23 of 5.3x.CNFN’s 2Q23 bottom-line recorded an impressive EGP172 million (+64% y/y). AIH reported POSITIVE 2Q23 results where net attributable income stood at EGP12.6 mn vs a loss of EGP2.3 mn in 2Q22. OFH 2Q23 net profit recorded EGP4.9 mn, leading to a 1H23 net profit of EGP115 mn, vs 1H22 loss of EGP234 mn. OFH is currently trading at annualized P/E23 of 8.0x and annualized P/B23 of 0.7x.OIH reported NEGATIVE 2Q23 results where it recorded a net loss for the quarter of EGP51 mn.  OIH is currently trading at annualized P/E23 of 40x.DOMT (FV: EGP9.24, OW) 2Q23 net profit climbed by 66.2% YoY. DOMT is currently trading at a FY23 P/E of 4.2x.RMDA (FV: EGP3.80, OW) 2Q23 attributable net income declined by 6.1% YoY to record EGP49 million in 2Q23. RMDA is currently trading at 2023f P/E of 7.3x.SCEM consolidated net loss after minority of EGP79.7 million in 1H23, shrinking from comparative losses of EGP102.4 million.LCSW 2Q23 attributable net income of EGP167.9 million in 2Q23 compared to net loss of EGP60.6 million in 2Q22. LCSW is currently trading at an annualized P/E of 2.4x.