We revise up our target price on El Sewedy to EGP 37.71 per share, issuing an ACCUMULATE rating as the easing political and economic situations in Egypt continue to drive the equity market’s performance and may translate into improving fundamentals in the medium term, especially with the company’s continuous growth efforts in Egypt, the GCC and the African continent. El Sewedy’s 2013 revenues were reported in-line with our expectations, increasing by 4% to EGP 15.1 billion following growth across all business lines, except for Turnkey and electrical products. However, net income after minority interest dropped by 17% to EGP 97 billion compared to EGP 117 million a year earlier, negatively affected by wind-related impairment of EGP 213 million in addition to a one-off impairment related to Syria amounting to EGP 95 million as the company discontinued all its cables, transformers and plastics business operations in the country. Going forward, although we expect El Sewedy to retain its financial status in 2014 with a slight improvement in Egypt’s operations, we anticipate improving conditions in the medium term as growth opportunities in Africa and the Middle East remain encouraging.
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