CI Capital has set a target price of EGP 152 for the shares of Talaat Moustafa Group Holding (TMG), representing a 184% upside from its current price of EGP 53.3, citing the developer's "meticulously executed strategic transformation." In a research note, the investment bank said its valuation reflects the value of the company's commercial and residential projects, including the South Med development, as well as its expansion into Saudi Arabia and planned projects in Iraq and Oman. The valuation also incorporates TMG's hospitality portfolio. CI Capital said the current market price for TMG's stock does not reflect the full value of the group's projects in Egypt and abroad, particularly the growth in foreign currency revenues from its regional expansion with the launch of the Banan project in Saudi Arabia and the acquisition of seven hotel companies with a portfolio of 5,000 rooms. The report noted that TMG's cross-border expansion is supported by strong demand, government backing, and a self-financing model, which reduces risk and allows for attractive rates of return. Ongoing hotel renovations and efforts to improve contracts with hotel operators are also expected to boost financial efficiency, the note added. The investment bank forecast that TMG would achieve contractual sales of EGP 431bn in the current year, with about 85% of that coming from the Egyptian market. It projected that the group's projects outside Egypt would contribute more significantly to total sales from next year, accounting for an estimated 27% of the total, up from about 15% expected this year. CI Capital also projected a three-year compound annual growth rate (CAGR) of 24% for TMG's revenue, driven by its residential and hospitality sectors, with an average gross profit margin of approximately 37%.
