We have initiated coverage on SODIC, an Egyptian real estate developer, with an ACCUMULATE rating and a fair value of EGP 27.00 per share presenting a 17.4% premium over its recent closing price. Egyptian companies are trading at a discount compared to regional peers due to the political situation and events occurring in Egypt. On the local front, SODIC’s price-to-revenue ratio of 4.3 is almost triple that of the Egyptian average estimated at 1.5. We attribute this premium to the expected high growth in SODIC’s revenues to occur between 2012 and 2013 as deliveries are made and revenues recognized.
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