A recent research note issued by Pharos Research maintained an overweight rating recommendation for Emaar Misr, but updated the stock's fair value (FV) to EGP 4.57 a share. That valuation was driven by the Egyptian real estate developer's "healthy margins, impressive sales performance, solid net cash position, leading effort in expanding land bank, and lack of land liabilities," according to a recent report. Emaar Misr reported a 15% year-over-year rise in profits for the first quarter (Q1) of 2018, recording a net profit of EGP 503.2m from EGP 437.9m. Revenues grew to EGP 830.7m in the three-month period ending last March, versus EGP 668.6m in Q1 2017. Emaar Misr had previously posted a net profit of EGP 2.3bn for the full year ending December 2017, compared to EGP 1.68m a year earlier. Meanwhile, Pharos Research has maintained its overweight rating recommendation for Orascom Telecom Media and Technology Holding's (OTMT) stock at a FV of EGP 0.94 per share. The stock's target price (TP) may see an additional EGP 0.40 per share if North Korea-based Koryolink's operations were included in the valuation, according to a recent report by Pharos. OTMT had previously said it was unable to repatriate cash from the North Korean unit after losing control of the operations there, the report highlighted. The research firm added that the proceeds from the sale of MENA Company will "trigger strategy updates." The valuation was also driven by Beltone Financial's plan to acquire a large market share of the initial public offering (IPO) pipeline in 2018, the report added, pointing out that OTMT's profitability will hike forward if Beltone succeeds in achieving its target profitability. OTMT reported a 48% y-o-y decline in consolidated profits for the full year of 2017, recording EGP 464.9m from EGP 897.5m. Revenues from operations grew to EGP 1.5bn last year, versus EGP 538.3m in 2016, the company said in a filing to the Egyptian Exchange (EGX). Standalone profits dropped 44% y-o-y in 2017 to EGP 606.14m from EGP 1.08bn. Income grew to EGP 765.9m last year from EGP 68.12m in 2016. In another research note, Pharos Research maintained its overweight rating recommendation for Credit Agricole Egypt at a FV of EGP 60 a share. The bank's remarkable performance during Q1 2018 might have been driven by "healthy growth of non-interest income," according to a recent report. Credit Agricole reported a 28.85% y-o-y rise in consolidated profits for Q1 2018, recording a net profit of EGP 601.47m from EGP 467.12m. Revenues from interest increased to EGP 1.3bn in the three-month period ending March 2018, versus EGP 1.08bn in Q1 2017 Standalone profits grew to EGP 605.7m in Q1 2018 from EGP 475m in the corresponding period of 2017. Credit Agricole's capital amounts to EGP 1.4bn distributed over 310.9m shares at a par value of EGP 4 per share. On another side, Mubasher Research downgraded its rating for Misr Fertilisers Production Co (Mopco) to sell/moderate risk from buy/moderate risk with the same PT of EGP 111.33 per share. Global urea prices are likely to grow, on which the fertiliser producer is forecasted to record a price-earnings ratio (P/E Ratio) of 9.8 times and enterprise value/earnings before interest, taxes, depreciation, and amortisation (EBITDA) of 5.8 times, according to a recent report. The Egypt-based firm reported its preliminary results for 2017 with earnings of EGP 674.8m, compared to EGP 709.9m a year earlier, the report added. The company's annual clean earnings did not match with estimates of EGP 1.36bn by 35% "on the back of booking deferred taxes during the year in relation to the translation of ENPC's USD-denominated financial statements to EGP," the report highlighted. Furthermore, tax expenses amounted to EGP 1.28bn, which implies an unusual effective tax rate of 65% that should be normalised next year, the report noted. Revenues soared 212% y-o-y to EGP 7.40bn, slightly lower than estimates of EGP 8.11bn. The research firm attributed the increase in Mopco's revenues to the "suboptimal utilisation rate for ENPC's production lines, resulting from the partial malfunction in the ammonia trains."
