We maintain our fair value for SE at EGP 32.40 per share after accounting for the recent 30% stock dividend distribution at a ratio of three bonus shares for every ten shares held. This fair value is in line with our previous target of EGP 42.23 on the 171.7 million shares outstanding before the stock dividend, and represents a 46% premium on the current price. We support our estimate by SE’s flourishing operations in Africa and the positive signs of growth in the Saudi and Qatari cables markets. However, we maintain a HOLD recommendation on the stock as we don’t believe that the price will hit our target in the near term due to the uncertain upturn in the political scene in Syria, Libya and Egypt and the resulting expected slowdown in new contract awards especially from the private sector.
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