BANGALORE: AlembicHC raised its share-price target on Egypt's Sidi Kerir Petrochemicals Co (SIDPEC) by 5 percent to LE 17 to reflect higher earnings estimates driven by better operating rates. "SIDPEC appears to be a stock that has actually benefited from the (country's) unrest as the depreciation of the EGP has led to increased earnings while the company's ability to export its products cushions the loss of local sales," it said. The brokerage raised its 2011 earnings-per-share estimate for SIDPEC by about 12 percent to LE 1.63, and increased average operating rates to 94 percent from 88 percent. "Despite the increase in SIDPEC's income tax rate to 20 percent in 2011, the net income margin of the company should remain above those of peers except pure gas based producers Saudi Arabian Fertilizers Co and Industries Qatar ," it said. Also, the present Egyptian polyethylene market is over three times the size of company's capacity, giving SIDPEC enough market size to sell its product even in a low economic growth scenario, AlembicHC added. The brokerage kept an "overweight" rating on the stock and said the company was its preferred name in Egypt given the current state of the economy.
