CI Capital Holding for Financial Investments (CICH) had published its full 2019 consolidated results. Total revenues reached EGP 2.6bn growing 39.2% year over year (YoY) and net profits, after tax & minority, reached EGP 544.8m, growing 46.0% yoy, with a total financing portfolio of EGP 8.2bn. Group operating revenue (+23% quarter over quarter QQ, 28% yoy) was solely driven by leasing revenues (+39% QQ, +38% yoy) supported by securitisation gains of EGP140m, as per management guidance, amid a weak quarter across all other business lines. Group attributable net profit for the fourth quarter of 2019 (4Q19) recorded EGP207m (+59% QQ, +92% yoy) driven by Corplease, bringing the FY19 group's attributable bottom line to EGP545m (+46% yoy). Mahmoud Attalla, chairperson and CEO, said "We have witnessed a solid fourth quarter performance, with our finance business portfolio increasing 9.7% YoY to reach EGP 8.2bn at the end of 2019, despite issuing the largest securitisation bond in the history of the group's leasing arm. This, coupled with resilient performance from the group's investment banking platform, allowed us to generate strong revenue growth of 39% YoY to reach EGP 2.6bn and robust bottom-line growth of 46% YoY to reach EGP 545m. As we look ahead in 2020, we believe initiatives introduced by the Central Bank of Egypt coupled with a more favourable interest rate environment will serve as a catalyst for growth on both the non-bank financial services and equity capital markets." Pharos Research sees that CI Capital is well positioned to benefit from the growth opportunities within Egypt's financial services sector by having the exposure to Egypt's equity market while maintaining revenue stream stability from leasing and microfinance operations. Pharos said that Corplease's bottom line is expected to grow at a Compound annual growth rate (CAGR) of 17% over 2019-2023 and continues to represent the majority of the company's attributable profits (average of 56%). It is also expected that Reefy net profit will grow at a CAGR of 26%, while net profits from the IB platform and holding company will grow at a CAGR of 16%. Pharos expect that CICH attributable bottom line to grow at a CAGR of 19%. We set CICH FV using Residual Income-based sum of the parts (SoTP) model, where Corplease represents 42% of FV, IB platform 29% of FV and Reefy 23% of FV, and Al Taaleem acquisition, which is expected to close in 3Q19, representing 6% based on stake of 9%.
