Pre-Trading Thoughts

Egypt has signed a USD 500 mn agreement to purchase wheat from Emirati agribusiness Al Dahra, over 5 years. The pact will see Egypt import USD 100 mn of milling wheat a year, with the Abu Dhabi Exports Office (ADEX) providing low-cost financing. Misr Life Insurance Company has launched the first USD Dollar denominated pension policy for Egyptians abroad, with installments between USD50-10,000.The Egyptian Railways Authority is looking forward to collecting up to USD40 million per year from selling train tickets in dollars to foreign and Arab visitors.ORHD (FV: EGP20.38, OW) achieved stellar 2Q23 sales of EGP4.7 billion, up 78.1% y/y and 72.0% q/q, bringing 1H23 sales up 59.9% y/y to EGP7.5 billion. Net profit in 2Q23 increased 59.1% y/y and 99.7% q/q to EGP582.0 million, bringing 1H23 net profit up 11.1% y/y to EGP873.5 million. Regarding OCDI’s (FV: EGP23.30, OW) acquisition of the 180 feddan land plot directly south of its North Coast project, Caesar, in May 2023, the company disclosed that the cost of the land plot is EGP534.0 million, or EGP706/sqm.EFID (FV: EGP22.80, OW) released 2Q23 net profit after minority interest of EGP406 mn (+125.7% YoY, +1.9% QoQ). 1H23 net profit recorded EGP805 mn (+135.1% YoY). EFID is trading at a FY23 P/E of 8.6x and an EV/EBITDA of 5.8x.Prime Minister Moustafa Madbouly said yesterday that the government is working to speed up raw materials shipment to EAST to ease the shortage of cigarettes.GBCO (FV: EGP10.55, OW) released 2Q23 consolidated attributable net profit of EGP501 mn (+2.4% YoY, +365.2% QoQ). The auto side recorded a bottom-line of EGP249 mn due to the absence of the huge FX losses. GB Capital’s net profit recorded EGP253 mn.  We upgrade our FV for GBCO to EGP10.55/share. GBCO is trading at a FY23 P/E of 5.0x and an EV/EBITDA of 4.8x.MTIE (FV: EGP6.70, EW) reported 2Q23 attributable profit came in at EGP142 million (+53% YoY, -8% QoQ). This brings 1H2023 net attributable profit to EGP295 million (+105.4% YoY). Revenue growth (+39.5% YoY), Flat margins and FX gains shaped the results. We upgraded our FV of MTIE to EGP6.70. MTIE is trading at 2023f P/E of 11.6x and EV/EBITDA of 8.0x.RACC reported 1H23 net attributable profit came in at EGP85.4 million (460.9% YoY), including FX gains of EGP39.8 million. RACC is currently trading at an annualized P/E of 3.6x.MCQE reported 2Q23 consolidated financial results recording an attributable net loss of EGP22 million, bringing 1H23 bottom-line to EGP44 million (-18% YoY). Quarter losses is attributed to tight operating margins in addition to the inflated financing expenses to meet the Group’s needs of raw materials, energy. MCQE is trading at FY23 P/E of 18.2x and EV/EBITDA of 7.2x.ARCC (FV: EGP9.94, OW) reported 2Q23 consolidated financial results with attributable net income recording EGP95 million (+57% YoY, -61% QoQ), bringing 1H23 bottom-line to EGP337 million (+182% YoY). Healthy revenue growth, that was mainly price driven, and lower forex losses drove bottom-line annually, despite tighter margins and higher interest expenses. Sequentially, Ramadan and Eid seasonality coupled with lower exports and almost stable selling prices drove margins and bottom-line down. ARCC is trading at FY23 P/E of 4.8x and EV/EBITDA of 1.8x.EXPA (FV: EGP20.0, OW) 2Q23 consolidated bottom line recorded EGP694 million, pre-minority interest and appropriations, (+23% q/q, +117% y/y). 1H23 bottom line reached EGP1,258 million (+102% y/y). EXPA is trading at P/E23 of 3.9x and P/B23 of 0.6x.EGBE (FV: USD0.50, OW) 2Q23 standalone net profit pre-appropriations recorded EGP341 million (+61% y/y, +8% q/q), Net income recorded EGP658 million (+61% y/y). EGBE is currently trading at P/E23 of 4.8x and P/B23 of 0.6x, on ROAE of 13.6%.SAUD (FV: EGP15.00, OW) 2Q23 net profit recorded EGP576 million (+39% y/y,+22% q/q). SAUD 1H23 net profit recorded EGP1.0 bil