Al Ahly Pharos

In today's Pre-Session Views: Strategy| Market intelligence confirms Jirian contribution to PHDC value is minimalMacro| May 2025 inflation to hover around 15% on base effectCSAG vs ALCN| Post calling management of both firms, we continue to favor CSAG over ALCNRMDA| Strong FY25 ahead for RMDA, with growth momentum, molecule acquisition, and benefit from rate cutsTMGH conference call| Potential subsidiary listing on other markets could unlock valueEGAL| Dividend powerhouse with structural tailwinds – Maintain positive viewARCC and Egypt Cement| Neutral but opportunities exist in smaller peersECAP's 1Q25| Pressures mount as weak demand and cost concerns persist

- Market Overview - ADIB- EGAL- ETEL- ORAS- Prepared by: Mayada Amin- CETA, CFTe 

In today's Pre-Session Views: Strategy| Jirian impact on PHDC is contingent on deal metricsETEL| Vodafone Egypt - MNOs cashflows giant remains a key value driver for ETELCSAG management call| AD ports agreement and recovery in Suez Canal traffic shall pave the way for a better performanceWeekly Commodities Update |   | Last Price | WoW Change, % | Brent, USD/bbl | 63.9 | -1.4% | Diesel-HSFO Spread, USD/ton | 189.2 | -6.1% | Egypt Urea, USD/ton | 401.0 | 0.0% | Polyethylene, USD/ton | 920.0 | 0.0% | Polypropylene, USD/ton | 965.0 | 0.0% | Iron Ore 65%, USD/ton | 115.4 | -0.6% | Steel/Iron Ore Spreads, USD/ton | 374.4 | -1.0% | LME Aluminum Cash Price, USD/ton | 2,438.3 | -0.8% | LME Copper Cash Price, USD/ton | 9,548.1 | -1.0% | Egyptian Retail Cement, EGP/ton | 3,784.0 | 1.1% | Steam Coal FOB Newcastle Australia, USD/ton | 100.8 | 0.4% | SMP, USD/MT | 2,817.0 | 0.0%

- Market Overview - GBCO- TMGH- CCAP- CIEBprepared by: Mayada Amin- CETA, CFTe

Strategy| Maintain UW commodity plays ex EGAL on gas shortage, gas price, OPEC and a strong EGPMTIE| How much is MTIE's Basata ePayments at 20% discount to FWRY?MCQE| Factors to consider ahead of 1Q25 resultsPOUL| Brazil's bird flu outbreak drives short term uncertainty in Egypt's poultry pricesCICH| Hidden value in CICH obscured by illiquidity drag

- Market Overview - COMI- CIEB- TMGH- EGAL- HRHO- HELI- Prepared by: Mayada Amin- CETA, CFTe

In today's Pre-Session Views: Strategy| HRHO at EGP31/share is closer to a SELLATLC| ATLC is a rare cash cow within the universe of bank and NBFIs but its valuation largely reflects its story. ISPH| Management call reinforces our positive view JUFO| Expanding concentrates capacity remains value accretive but materially lower juice prices makes us less excited on the stock at the current price level

- Market Overview - COMI- HRHO- ORHD- TMGH-.prepared by: Mayada Amin- CETA, CFTe

In today's Pre-Session Views: Strategy| Property stocks to outpace banks during 2H25HRHO| Key Takeaways from EFG Hermes Group Presentation on ValUETEL| Positioned to benefit from interest rate cuts ORAS| A solid start to the year, 1Q perfectly in line with estimates 

- Market Overview - COMI- TMGH- ORHD- ISPH- JUFO- prepared by: Mayada Amin- CETA, CFTe

Strategy| PHDC ranked top pick as Abu Dhabi project is estimated to add around EGP15/share to FV estimateABUK, EKHO, MFPC, KIMA, LCSW, ECAP| Egypt's planned LNG imports signals higher gas prices and challenges industrial marginsHRHO| Should we purchase HRHO at EGP30 ahead of the ValU IPO?EFID| Steady but tepid start to a year lacking momentum

- Market Overview - HELI- PHDC- ZMID- IFAP- SUGR- prepared by: Mayada Amin- CETA. CFTe

In today's Pre-Session Views: Strategy| Out of all commodity and F&B plays, EGAL and SUGR continue to stand outJUFO| potential non-core asset sale to support liquidity and profitabilityMBSC| Signals Commitment to Shareholders with Robust FY24 DividendEFIH| A direct beneficiary of Egypt's tourism boomRAYA| Keep an eye on EGX's diversified conglomerate – another beneficiary of interest rate cutsWeekly Commodities Update |   | Last Price | WoW Change, % | Brent, USD/bbl | 64.8 | -1.0% | Diesel-HSFO Spread, USD/ton | 201.5 | -3.4% | Egypt Urea, USD/ton | 401.0 | 2.8% | Polyethylene, USD/ton | 920.0 | 0.0% | Polypropylene, USD/ton | 965.0 | 0.5% | Iron Ore 65%, USD/ton | 115.8 | -1.0% | Steel/Iron Ore Spreads, USD/ton | 378.9 | 0.0% | LME Aluminum Cash Price, USD/ton | 2,456.9 | -1.2% | LME Copper Cash Price, USD/ton | 9,641.1 | 1.7% | Egyptian Retail Cement, EGP/ton | 3,743.0 | 3.5% | Steam Coal FOB Newcastle Australia, USD/ton | 100.4 | 1.4% | SMP, USD/MT | 2,817.0 | -0.4%

- Market Overview - EFIH- EMFD- PHDC- ORWE- preaching by: Mayada Amin- CETA, CFTe

Strategy| Corridor at 20% by end 2025 favors the likes of ISPHMacro| CBE tone is categorically dovishISPH| 3.25% policy rate cut YTD boosts pre-tax income by EGP100 million during 2H25EFIH and FWRY| At circa 40% of net income, interest income under watch post CBE second policy rate cut

- Market Overview - HRHO- EFIH- ALCN- PHAR- HELIprepared by: Mayada Amin- CETA, CFTe

In today's Pre-Session Views: Strategy| Flagging concerns over the outlook for ceramics and urea playersLCSW| Pharos Views on LCSW Post Management Call: Another 2 quarters of soft performance before a meaningful recovery builds momentum during 4Q25Heads up: Market intelligence suggests a natural gas price hike is imminent and urea players will not be able to fully offset margin impactMCQE| What does MCQE deal tell us? Buy MCQE on EV/ton arbitrage. POUL| The potential for a jumbo dividend yield offers a window for a 2H25 trade

- Market Overview - HRHO- BTFH- ALCN- EFIH- ADIB- prepared by: Mayada Amin- CETA, CFTe

*Key fundamental views for today*Strategy| While eyes are dazzled by NBFI rally, build positions in EGALBINV| Cash + At the Money Call OptionsPOUL| Resilient amid high sector mortality ratesEKHO holds steady as gas disruption offset by strong earnings, dividend pledge

- Market Overview - BTFH- GBCO- ISPH- ETEL- MTIE- prepared by: Mayada Amin- CETA, CFTe

Strategy| PHAR as an ideal EGP appreciation antidoteMacro| CBE expects the disinflationary path to continue in 2026Macro| MoF issued 5-year bonds after a 2-year haltBTFH shaping up to become a pan EM "Lendor"

- Market Overview - Prepared by: Mayada Amin- CETA, CFTe 

Strategy| HRHO rally opens gate for arbitrage opportunitiesMacro| Active interbank is a telltale of foreign inflows - Positive for USDMTIE 1Q25| On track to meet full-year estimates, exceeding estimates is contingent on Saudi and auto sales performanceTMGH| Another mispriced stock whose MCAP overlooks more than just land bankORWE| Revenues stall and margins tighten, signaling a tough FY25 performanceEKHO| 1Q earnings in line with guidance, cautious outlook for the year

- Market Overview - Prepared by: Mayada Amin- CETA, CFTe

ORHD is a top exposure to an upswing in tourist arrivalsAmbitious government targets USD42 billion FDI in FY25/26 PHAR Management Call| Positive vibes for 2025 are confirmed, countdown begins for Eipico 3 

- Market Overview - EMFD- HRHO- ADIB- CIEB- FWRYPrepared by: Mayada Amin- CETA, CFTe

*Key fundamental views for today*Strategy| Long EGAL on rebound in Aluminum pricesMacro| FY25/26 budget is out and it foresees a plunge in average treasury yields to 16% Macro| Maersk might transit the SC soon - Positive for USD.Macro |Global commodity prices imply more stability on the fuel front - Positive for inflation, interest rates.EFIH or FWRY? Long both - own the rails and the ridersGBCO| Soft start to the year with weak contribution from GB capitalATLC| At 2.5x book, recovery story has been largely priced inCOMI| Earnings call highlightsLCSW| Weak volumes during 1Q and no catalysts until end 2025

- Market Overview - COMI- EMFD- PHDC- RMDA- ISPH- prepared by: Mayada Amin- CETA, CFTe

Strategy| Banks are relating on COE compression hopes - keep an eye on SUGRMacro| Tourism on fire in Q1 2025 - Positive for USDSUGR| SUGR is on track for a strong yearBTFH 1Q profit is 41% of 2024 record breaking results - A strong BUYORHD at EGP23.40/share? Is it still a BUY?

Market Overview Prepared by: Mayada Amin- CETA, CFTe

*Key fundamental views for today*    Strategy| Macro noise is bullish EGP and step in CSAG + EGAL on Red Sea traffic recovery and aluminum price rally. Macro| Remittances go the extra mile in Feb- positive for USDCOMI 1Q25| on track to meet full year estimates, supported by controlled operating expenses and reduction in provisions. ETEL| starts 2025 robustly despite debt burden, price performance lacks catalyst despite upside potential of 45% from current levels.RMDA| A strong volume growth and portfolio repricing set RMDA on solid FY25 path CCAP| capital increase postponed till year end ECAP's 4Q| impacted by rising cost and competitionPOUL| Record revenues and strong margins on seasonal demand

- Market Overview - ABUK- EFIH- EGAL- FWRY - ALCN- prepared by; Mayada Amin- CETA, CFTe

*Key fundamental views for today*    Strategy| FWRY and EGAL offer value post yesterday's sell-offMacro| Core Inflation up in April, no threat to expected easing pathMacro| Restoring normal traffic to the Suez canal might take monthsMacro| The Government will tap international financial markets before mid-2025JUFO| ST performance may remain under pressure on plunge in orange juice concentrates w/wARCC| Two-month quota suspension casts doubt on ARCC FY25 earningsMFPC| Stable Q for MFPC, maintain equalweightADIB| strong 1Q25; penalized by lack of cash dividends  Weekly Commodities Update 

Market Overview prepared by : Mayada Amin- CETA, CFTe

*Key fundamental views for today*STRATEGY| EGX30 should find support in potential US-China trade deal/India-Pakistan ceasefire/EG sovereign CDS compressionMACRO| There is room for 100-200 bps policy rate cut on 22 May post April inflation printMACRO| USD/EGP 2025 outlook remains stable at 51-53 amid strong signs of commitment to IMF programARCC| Coal and sales mix to drive GPM expansion in 2025SKPC| 1Q-25 results are almost flat y/y and 2Q results will likely remain so on flat HDPE. Time to accumulate as stock trades at low end of historic multiple

- Market Overview - BTFH- PRCL - OIH- CLHO- prepared by: Mayada Amin- CETA, CFTe

Prime Minister Mostafa Madbouly stated that the fifth review of the IMF loan program will start within few days, according to local press.              Egypt is committed to paying USD725 million to the IMF during the current month of May, and USD962 million in June, after paying USD1.56 billion during 4M2025.The Madbouly government expects to raise USD4-5 bn from selling stakes in 11 state-owned companies during the fiscal year 2025-2026, as a part of its privatization program.The government is putting together new incentive criteria and additional benefits for automakers participating in the Automotive Industry Development Program in a bid to boost local component rates to 65% from 45%. The revised incentive framework introduces a new methodology for calculating local component requirements and value-added metrics. The framework will be presented to Prime Minister Moustafa Madbouly before being submitted to President Abdel Fattah El Sisi for final approval.The cabinet approved the official rollout of the Universal Health Ins. System in Aswan starting 1 July 2025. As part of the plan, non-emergency medical services will be suspended for uninsured individuals beginning 1 January 2026.Egyptian Prime Minister Mostafa Madbouly said that Egypt is negotiating with Saudi Arabia on joint projects with the Egyptian private sector across different sectors.Egypt and Greece signed a strategic partnership yesterday during President Abdel Fattah El Sisi's visit to the country, according to an Ittihadiya statement. The two sides also inked agreements to boost cooperation in a number of fields.The Madbouly government increased Exxon Mobil's production share from the Masry and Cairo offshore concessions to 40%, up from 15%. The government also extended the concessions' cost recovery period to seven years from five to encourage the company to increase its investments in Egypt's energy sector.Thirty Egyptian companies are considering establishing new factories in Morocco in the coming period, to boost joint investments between the two countries.The Federal Reserve held interest rates steady on Wednesday but said the risks of higher inflation and unemployment had risen, further clouding the economic outlook as the U.S. central bank grapples with the impact of Trump administration tariff policies.TMGH achieved impressive YTD sales of over EGP160.0 billion, up 127.0% y/y, driven by the launch of the second phase of SouthMed which generated sales of EGP70.0 billion in one day.AMOC released 3Q24/25 unaudited financial indicators. Net profit surged to EGP463 million (+18% YoY, +158% QoQ) in 3Q24/25. Over 9M24/25, net profit inclined 5% YoY to EGP1.1 billion. AMOC is currently trading at a FY24/25e PE of 10.7x.EGBE released key financial indicators with 1Q25 standalone bottom line recorded EGP781 million (+26% q/q, +45% y/y, and +14% higher than Al Ahly Pharos Estimates of EGP686 million). EGBE is currently trading at P/E25 of 2.6x and P/B25 of 0.6x. AGM approved the distribution of cash dividends of 0.59/share, which implies a payout ratio of 12% and DY of 3.7%.

- Market Overview - Prepared by: Mayada Amin- CETA, CFTe

*Key news articles for today*Net International Reserves inched up to USD48.14 billion at the end of April, up from USD47.76 billion in March. The ascent is driven by a USD1 billion increase in the value of gold component of reserves, driving the reserves up, despite the lower value of foreign currencies which recorded USD34.32 billion down from USD35.14 billion in March.Trump said the US would stop attacking the Houthis in Yemen, as Oman confirmed a "ceasefire" had been reached with the Iran-backed group for it to stop targeting shipping in the Red Sea.The Finance Ministry is looking to collect some EGP722 mn from the incoming stamp tax on EGX transactions in the upcoming fiscal year, as part of a broader plan to collect some EGP 61 bn from stamp duties through various channels, a government source said. The draft law for the implementation of the stamp tax on EGX transactions is currently in its final stages of preparation ahead of being submitted to the House of Representatives for final approval, upon which it would replace the long-delayed capital gains tax on bourse transactions.The Tourism Ministry is looking to secure some EGP200 mn to launch the second iteration of the subsidized loan program for hospitality players, Tourism Minister Sherif Fathy said.The International Finance Corporation (IFC) plans to invest USD1 bn in Egypt's agriculture and food industries during 2025, an IFC official said.The IFC is seeking to secure USD600 million in financing for the Abydos 2 project, which will be the largest photovoltaic solar power plant in Egypt, equipped with a battery energy storage system, and cost exceeding USD750 million.Egypt will host a delegation from the European Commission late in May to finalize negotiations to unlock a tranche of the EUR4 bn grant from the EU. Egypt is studying a plan to ramp up imports from Morocco to USD600 mn over the coming period to address the trade imbalance between the two countries.Chevron will invest at least USD120 mn in a new exploration concession to explore for oil and gas in the West Star concession in the northeast Mediterranean.OLFI released 1Q25 financial results, reporting net profit of EGP184 million (+17.2% YoY, -34.8% QoQ). OLFI is currently trading at FY25f P/E of 6.3x.POUL has signed an exclusive licensing agreement with French firm Avril to manufacture and distribute the “Sanders” and “Golden Horse” brands in Egypt and the Gulf region. The partnership involves investments totaling EGP200 million, with projected annual sales volume reaching 9,000 tons.Scatec has kicked off construction of its USD590 million, 1.1 GW Obelisk solar project with 200 MWh of battery energy storage in Nagaa Hammadi. The project will be fully operational in the second half of 2026. The project could cover up to 40% of EGAL's electricity needs and save more than 15% of the company's electricity cost. 

- Market Overview - BTFH- FWRY - ORAS- TAQA-  ELEC- prepared by: Mayada Amin- CETA, CFTe

The CBE has released the Balance of Payment (BoP)'s performance report for 1HFY2024/25. Key points are: 1) The overall BoP recorded a deficit of USD503 million in 1HFY2024/25, and 2) The current account (CA) deficit has surged by 15% YoY to c. USD11.1 billion. A team from the International Monetary Fund will begin the fifth review of the Extended Fund Facility Arrangement in Cairo this week. Further details will be communicated at the conclusion of the mission,” IMF Press Officer Angham Al Shami said.The headline PMI declined from 49.2 in March to 48.5 in April, which was the lowest reading in 2025 so far. The downturn was widely attributed to a weakening of demand at non-oil companies. Lower levels of activity and new work led non-oil companies to rein in purchases of inputs for a second month in a row. Input prices in the non-oil economy rose at their fastest pace in four months in April, however, output prices were unchanged.A tranche of the EUR4 bn grant from the EU could land in state coffers within weeks, EU Ambassador to Cairo Angelina Eichhorst told MENA news agency. The financing, part of a broader EUR5 bn macro-financial assistance package agreed in March 2024, was approved by the European Parliament last month.The Madbouly government has agreed with Italian energy player Eni to raise the purchase price of new natural gas from onshore areas by 60%, a government official said. The hike will apply to output from sites managed by Agiba — a JV between Eni subsidiary IEOC and the Egyptian General Petroleum Corporation (EGPC).The state is considering a proposal to allow every family to purchase a residential unit with affordable mortgage terms, including a subsidized interest rate and a repayment period of eight years at most, according to a cabinet statement. The initial plan prohibits selling the properties for a certain period of time.PHDC achieved remarkable 1Q25 sales of EGP80.2 billion, up 148.4% y/y from an already strong 1Q24 and up 286.4% q/q, putting PHDC on track to achieve its FY25 sales target of EGP200.0 billion, which would imply a 32.4% y/y increase.EGAL reported 3Q24/25 KPIs. Net profit after tax of EGP2.5 billion in 3Q24/25 (+42% YoY, -19% QoQ), EGP9.9 billion in 9M24/25 (+89% YoY). Bottom line performance was shaped by relatively tight operating margins along with a foreign exchange loss of EGP813 million that hit the P&L in 3Q23/24.  EGAL is currently trading at FY24/25e P/E of 5.5x. SWDY has acquired a 60% stake in Thomaseen Services to expand into the oil and gas industry. The acquisition consists of Thomassen's Middle East and Africa business unit, filters manufacturing, and its African business affiliate. CLHO stated in a press release that it secured all necessary approvals to increase its ownership in Cairo specialized hospital from 57% to 90% of the company's shares. ISPH cancelled its plan to transfer el sherouk Pharma hospital to its investment arm "AIM" due to obstacles in issuing the needed licenses and approvals. ISPH added that it plans to exit from the hospital within three years.EFID BoD approved the sale of a production line and machinery, which have been previously imported by EFID, to Ahramat Al Nile for General Trade and Food Industries-limited liability, located in Iraq, with total amount of USD3.0 million. 

- Market Overview - CSAG- ORWE- ALCN- ETEL- Prepared by: Mayada Amin - CETA, CFTe 

*Key news articles for today*Abu Dhabi wealth fund ADQ-owned AD Ports Group has inked a 50-year renewable usufruct agreement with the Suez Canal Economic Zone (SCZone) to develop and operate an industrial and logistics zone spanning 20 sqkm in East Port Said. Net foreign assets in Egypt's banking sector increased for the third consecutive month to USD15.04 billion in March, up c. 47.5% from February's USD10.2 billion. Commercial banks recorded their first surplus since August; their net foreign assets came in at USD2.5 billion in March. The government is preparing to unveil a revamped export subsidy program that will roughly double support rates across all sectors, introduce new incentives for branded exports, and prioritize higher value-added sectors. The framework is expected to be formally announced soon, come into effect on 1 July, and run through 2028.  The CBE has plans to issue a record EGP2.2 trillion in t-bills and bonds during the fourth quarter of the current fiscal year, marking a 9.7% q/q increase, to help cover the budget deficit.  The government plans to purchase 8.5 million tons of wheat in the upcoming fiscal year, split between local and imported supply. That is around 300k tons more than FY24/25. The government plans to implement a number of amendments and measures to increase the expected VAT proceeds during the next fiscal year, by including new sectors in the formal economy and applying the tax to entities previously exempted from it. This comes amid expectations of lower production costs and a further reduction in interest rates.  Sources told press that allowing banks to process customs imports after the official working hours without restrictions will expand the import and export base for investors, which will positively impact VAT revenue. ABUK released 3Q24/25 unaudited financial indicators with net profit came of EGP3.3 billion (-59% YoY, +5% QoQ). This brought 9M24/25 bottom line to EGP7.8 billion (-36% YoY). ABUK is currently trading at FY24/25f PE of 5.0x. EFIC released 1Q25 unaudited standalone results with net profit increasing by 32% YoY (-78% QoQ) to EGP208.9 million. EFIC is currently trading at FY25f PE of 5.2x. ABUK subsidiary North Abu Qir for Agri-Nutrient Company's Board of Directors approved the establishment of a new company under the name Khaleej Abu Qir for Agri-Nutrient as a private free zone company with an authorized capital of USD100 million and issued and paid-in capital of USD5 million.  ABUK subsidiary Global Company for Methanol and its Derivatives' general assembly approved the liquidation of the company, and the redemption of the shareholder shares in the company's capital. TMGH (FV: EGP75.00, OW) launched the second phase of SouthMed on the North Coast. Weekly Commodities Update|   | Last Price | WoW Change, % | Brent, USD/bbl | 66.9 | -1.6% | Diesel-HSFO Spread, USD/ton | 216.7 | 2.1% | Egypt Urea, USD/ton | 392.5 | -0.6% | Polyethylene, USD/ton | 940.0 | 0.0% | Polypropylene, USD/ton | 990.0 | -0.5% | LME Aluminum Cash Price, USD/ton | 2,396.3 | 2.9% | LME Copper Cash Price, USD/ton | 9,376.4 | 2.4% | Egyptian Retail Cement, EGP/ton | 3,527.0 | 0.1% | Steam Coal FOB Newcastle Australia, USD/ton | 93.8 | -1.4% | SMP, USD/MT | 2,795.0 | -2.8%

- Market Overview - HELI- BTFH- PHDC- APSW- ETEL- Prepared by: Mayada Amin- CETA, CFTe

Tourist arrivals rose 25% y/y in 1Q25 to 3.9 million. Tourism minister expects the 5% y/y increase in 2024 to be followed by an 8% y/y increase in 2025.The House of Representatives will start discussing amendments to the Old Rent Law today.The IMF said in its latest Regional Economic Outlook that “economic activity is expected to pick up but remain modest” this year in Egypt.According to IMF data, public debt fell to 89% of GDP by the end of FY23/24, compared to 95.7% at the end of the previous year.Fitch Solutions expects Egypt's economic indicators to gradually improve during the period from the current fiscal year until 2027/2028.Net sales of government bonds and treasury bills by foreign investors amounted to approximately USD1.7 billion during the month of April 2025.President El Sisi has given the final approval for the revamped Labor Law.International oil companies Chevron, Shell, and Eni have submitted offers for exploration blocks in the Mediterranean.Eni plans to inject USD1 billion in new investments in the Zohr field.Japanese medical device manufacturer JMS, its local agent Interpharm, and the Egyptian Company for Medical Investments will establish a EGP1.4 billion factory for blood collection bags and tubes in Ain Sokhna's industrial zone.Chinese firm XinGaoyi Medical Equipment (XGY) and the Arab African Company for Medical Industries (AACMI) signed a partnership agreement to establish a factory to locally manufacture medical equipment.Chinese solar tech company TrinaSolar is looking to increase its solar panel sales in Egypt by 20% y/y in 2025 to reach USD600 million.CIEB 1Q25 consolidated bottom line recorded EGP1,869 million (-4% q/q, -18% y/y). CIEB is currently trading at P/E25 of 3.1x and P/B25 of 0.9x.SWDY will distribute cash dividends of EGP1.00/share on 15 May 2025 for shareholders on record on 12 May 2025 (DY 1%).The Ministry of Finance intends to unify the value-added tax rate on contracting activities at 14% instead of the 5% currently applied to supply and installation works combined. CIRA released its 2Q24/25 financial results, reporting a net profit of EGP226 million (+20.3% YoY, +26.8% QoQ). CIRA is currently trading at FY24/25f P/E of 29.6x and EV/EBITDA of 7.6x.GBCO plans to introduce three new models of the Chinese automotive brand, Changan, in the Egyptian market during 2H25.RMDA's general assembly approved cash dividends of EGP0.11/share to be distributed over two equal installments in June and November. The assembly also approved 0.3:1 bonus shares.ALCN released financial indicators showing 9M24/25 net profit of EGP5.4 billion, up 31.1% y/y.CCAP has contracted with independent financial advisor Graviton Financial Advisory for Securities to conduct a study of the fair value of the company's shares. Upon completion, the extraordinary general assembly will be invited to consider increasing the company's capital.

- Market Overview - COMI- ALCN- RMDA- ETEL- OFH- Prepared by: Mayada Amin- CETA, CFTe

*Key news articles for today*Egypt is having to increasingly look to debt to bridge the budget deficit and repay its debt obligations, with the government financing gap in the next fiscal year's draft budget up by over 25% to EGP 3.6 tn. The widening shortfall is attributed to a fall in non-tax revenues coupled with increased social spending. The days of investors trudging from government office to government office to get projects off the ground may soon be over, with the state set to launch its in-the-works online unified licensing platform next month. The exchange rate of the USD against the EGP fell below EGP 51 this week, as US reduced customs duties began to bring out relief for the market. The rebound in the value of the EGP is down to an increase in foreign investment inflows, a senior banking source said. The Deputy Minister of Electricity, revealed that investments in the project to export Egyptian electricity from renewable energy sources will range between USD15 and USD20 billion, adding that the government recently completed preliminary studies for the project and is in the process of conducting detailed and final studies in cooperation with the Emirati company K&K. The number of tourists arriving to Egypt increased by 25% year-on-year during 1Q2025, reaching 3.9 million tourists. The CBE withdrew EGP740.85 billion through the weekly open market auction, with an annual return of 25.5% and for a period of 7 days. ExxonMobil is seeking to sell its only gas discovery in Egypt, Nefertari-1, as it believes the discovery does not fit within its portfolio in terms of the reserves required to begin development and production operations, as it focuses on discoveries with reserves exceeding 4 trillion cubic feet of gas. TMGH (FV: EGP75.00, OW) is in advanced stages of negotiations to develop a mixed-use project on a 14.0 million sqm land plot southwest of Baghdad in Iraq. The project is expected to host around 45k mixed-use units and generate sales of around USD17.0 billion and recurring income of over USD1.5 billion per year upon completion. TMGH expects to receive the land by the end of 2025.               SUGR released 1Q25 financial indicators, with net profit reaching EGP315 million (+45.3% YoY. +8.7% QoQ). SUGR is currently trading at FY25f P/E of 4.9x. SWDY stated they haven't signed new industrial projects in Iraq, but they are still studying some potential ventures.

Market Overview Prepared by: Mayada Amin- CETA, CFTe

China's Wu'an Xin Feng has kicked off construction on its planned USD1.7 bn integrated industrial complex in Ain Sokhna's Industrial Zone, the Suez Canal Economic Zone (SCZone) said in a statement. The two-phase complex being built by the company's Egyptian arm Xin Feng Egypt Steel will be completed over a five-year period and create 8k direct jobs.The Asian Infrastructure Investment Bank (AIIB) is putting together USD300 mn in budget support for Egypt, Planning and International Cooperation Minister Rania Al Mashat said. The agreement is expected to be finalized by June, Al Mashat said, adding that negotiations have been completed.Kuwait's Bukhamseen Holding plans to invest between EGP30-40 bn in Egypt over the coming two years, Asharq Business reports. The investment ticket, currently equivalent to USD590.0-786.6 mn at today's exchange rate, will go toward several sectors, with a focus on hospitality.Five Arab and foreign investment funds are negotiating with the Egyptian government to acquire strategic stakes in government hospitals and pharmaceutical companies that were recently listed as part of the IPO program, according to government sources. They added that Emirati and Saudi companies are the most interested in the Egyptian pharmaceutical market, and they expect the coming period to witness major acquisitions in this sector.Egypt's non-oil trade deficit narrowed by 27.7% y-o-y in 1Q 2025 to USD6.3 bn, according to a government document. This was supported by a 27% y-o-y rise in non-oil merchandise exports, reaching USD12.7 bn, up from USD10.0 bn.The overall state budget deficit decreased during 8M FY2024/25 to EGP879.3 billion, 5.1% of GDP, compared to EGP898 billion, equivalent to 6.5% of GDP, during the same period of the previous year. This was due to a 32.8% growth in general revenues to EGP1.442 trillion, compared to EGP1.086 trillion.The central bank sold USD984.9 mn in one-year USD-denominated t-bills yesterday at an average yield of 4.25%, surpassing its USD950.0 mn target, according to data on its website. The issuance will go toward refinancing an outstanding debt worth USD950 mn.TMGH is negotiating with the Iraqi government to develop an administrative project in Baghdad, with the project expected to cost over USD10.0 billion and cover a land area of 35.0 million sqm. The final agreement is expected to be reached by the beginning of 2026.OCDI reported annually solid 1Q25 revenue of EGP2.8 billion, up 50.0% y/y and down 20.5% q/q, and net profit of EGP950.7 million, up 143.7% y/y and down 40.3% q/q.CCAP expects ASEC Mining's (ASCOM) disclosed impairment, amounting to EGP320.5 million, will have a negative impact on CCAP's consolidated net profit on 31 December 2024 of c. EGP190.6 million. Noting that the impairment has been booked until the legal proceedings, which may result in the return of the pledged shares or their value, are completed. EFID plans to invest EGP1.0 billion in 2025 to expand its production capacity.Weekly Commodities Update |   | Last Price | WoW Change, % | Brent, USD/bbl | 66.9 | -1.6% | Diesel-HSFO Spread, USD/ton | 216.7 | 2.1% | Egypt Urea, USD/ton | 392.5 | -0.6% | Polyethylene, USD/ton | 940.0 | 0.0% | Polypropylene, USD/ton | 990.0 | -0.5% | LME Aluminum Cash Price, USD/ton | 2,396.3 | 2.9% | LME Copper Cash Price, USD/ton | 9,376.4 | 2.4% | Egyptian Retail Cement, EGP/ton | 3,527.0 | 0.1% | Steam Coal FOB Newcastle Australia, USD/ton | 93.8 | -1.4% | SMP, USD/MT | 2,795.0 | -2.8%

- Market Overview - HRHO- MASR- RMDA- MFPC- TAQA- Prepared by: Mayada Amin- CETA, CFTe

We published this morning our earnings expectations sheet for companies under coverage in 1Q25/FY25, with the following key conclusions:In FY25, aggregated net profit is expected to increase 10% YoYStocks that are expected to witness a shift from net loss to net profit YoY in 1Q25: ORHD and EGCHStocks that are expected to witness a spike (>80%) in net profit growth YoY in 1Q25: MBSC, CNFN, FAIT, MCQE, and ARCC. (sorted from highest rise in net profit)Stocks trading at P/E 2025 less than 5x: CCAP, EGBE, CICH, ADIB, and CANA. (sorted from lowest P/E)Please refer to our sheet published this morning for detailed earnings expectations and trading multiples.Egypt's total local and foreign debt repayment obligations are projected to jump around 30% to EGP2.1 trillion in the next fiscal year, up from an estimated EGP1.6 trillion for FY24/25.The Finance Ministry intends to issue new local debt instruments worth EGP1.5 trillion in the upcoming fiscal year, up from EGP1.2 trillion in the current fiscal year, as part of the government's plan to raise spending on social welfare and narrow the budget deficit.Egypt is among six Arab countries set to face a significant impact from Trump's tariff regime, assuming the tariff measures are fully implemented, the United Nations Economic and Social Commission for Western Asia (ESCWA) said in a policy brief. A significant impact is defined as at least 5% of a country's global exports going to the US.The state is working to liberalize the country's electricity market by 2026, along with restructuring the Egyptian Electricity Transmission Company (EETC) and its separation from the Egyptian Electricity Holding Company (EEHC).Federation of Egyptian Industries delegation is in Riyadh to talk investment in the Kingdom during a three-day business forum that wraps tomorrow. The government has estimated the financial allocations needed to import LNG and diesel shipments to meet the country's fuel needs during FY25/26 at approximately USD9.5 billion, compared to more than USD6 billion spent so far this year.President El-Sisi approved a USD500 million loan agreement from the International Bank for Reconstruction and Development (IBRD) to finance the Development Policy Financing for Resilience program.Scatec's 1 GW Obelisk solar plant will be connected to the grid by 220 kV transmission lines built under a contract between the Egyptian Electricity Transmission Company (EETC) with the consortium of Kharafi National and Power Ring. The project is planned to power EGAL's aluminum complex in Nagaa Hammadi. CCAP's United Foundries Company is planning to invest up to USD10 million in a new foundry in Helwan focusing on producing castings for the gold mining and cement industries, adding some 40k tons to the company's production capacity and bringing total output to around 70k tons annually.Hilton will open two new hotels in the New Capital. The two hotels, Hilton Cairo New Capital Downtown and Hilton Garden Inn Cairo New Capital Downtown, are scheduled to open in 2028.