The Daily Beam Monday, 25 November 2019 / Daily Newsletter  Top Headlines (in Arabic)

Corporate • Cleopatra Hospital Co.’s (CLHO) net profit after minorities fell 21% y/y to EGP167mn in 9M 2019 (-20% y/y, +59% q/q to EGP69mn in Q3 2019) despite 21% higher revenues of EGP1.29bn in 9M 2019 (+19% y/y, +13% q/q to EGP462mn in Q3 2019). The drop in earnings is blamed on a 99% leap in SG&A y/y, triggered by EGP122mn non-cash expenses on the back of the company’s impairment of trade receivables and long-term incentive program (LTIP). Excluding these non-cash expenses, earnings grew 26% y/y to EGP288mn in 9M 2019. Meanwhile, gross profit margin expanded by 74bps y/y to 35.1% (-44bps y/y, +419bps q/q to 36.1% in Q3 2019). Total served cases increased 8% y/y to 725,541 (+11% y/y, +12% q/q to 258,387 in Q3 2019). (EGX, Company disclosure) • Heliopolis Housing & Development (HELI) will be releasing the conditions of contract for bidders today, 25 November. The deadline for submitting offers for the management of HELI is 14 January 2020. Sources reported that the most important financial and technical determinants for the selection of the management partner are the maximum management fees of 20% from profits achieved each year. The trade-off between applicants will be based on technical and financial offers submitted, and if the applicant passes 60% in both offers, the company will start to consider their offer. (Company disclosure, Al-Borsa) • Egyptian Electricity Transmission Co. signed a contract worth EGP696mn with Elsewedy Electric’s (SWDY) subsidiary Elsewedy for Trading & Distribution to expand Toshka and El-Oaynat transformers station. (Al-Ahram) • Qalaa Holdings (CCAP) is planning to sell 30% of its subsidiary TAQA Arabia’s shares in an IPO as early as next year. (Enterprise) • EFG Hermes Holding (HRHO) and were reportedly tapped to lead United stake sale. (Enterprise) • Healthcare fund Rx Healthcare finalized the acquisition of an 80% stake of Al-Mottahedoon Pharma, a saline producer. We note that EFG Hermes Holding (HRHO) manages the fund in which it holds a c.52% stake. (Al-Mal) • Orascom Development Egypt (ORHD) is constructing a new phase in Makadi Heights that will include 2,100 units and will start its delivery by April 2022. (Al-Borsa) • Cement producer Titan Group has agreed to acquire the International Finance Corporation’s (IFC) minority stakes in all of Titan’s subsidiaries in Egypt and Southeast in an EUR81.8mn transaction. The acquisition includes IFC’s 17.28% stake in Alexandria Development which in turn holds an 88.93% stake in Alexandria Portland Cement (ALEX). (EGX) Non-Corporate • Private equity firm Actis has formally submitted a letter of intention to acquire a stake in the government’s combined-cycle power plants, Sherif El-Kholy, Partner & Head of and Africa at Actis said. Actis is looking to get a piece of all three power plants once Egypt’s Tharaa begins to offer up stakes in the other two. According to El- Kholy, Actis wants to hold at least 51% of the three plants in Burullus, the New Administrative Capital, and Beni Suef. (Hapi) • The Ministry of Petroleum said that Egypt’s imports of crude and petroleum products have retreated by 13% to USD2.7bn in Q1 FY2019/20. (Al-Borsa) • The Minister of Social Solidarity issued a decree to collect fees on the tickets of cinemas, parks, first and second classes of trains, as well as telegraph messages to support charity works. (Al-Borsa) • Empower renewable energy cancelled its contract with North Delta for Electricity Distribution and will not sell the electricity generated from waste in its project in Kafr El-Sheikh. According to Empower, the tariff set by the government at EGP1.03/KwH is no longer suitable, and a reasonable tariff would be somewhere around EGP1.40-1.50KwH. (Al-Mal)

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The Daily Beam Monday, 25 November 2019

Markets

 EGX 30 14,050.16 (0.32%)  EGX 30 TR 5,224.79 (0.30%)

 EGX 70 539.25 (0.64%)  EGX 100 1,417.56 (0.70%)

 DFMGI 2,687.30 0.11%  ADSMI 5,041.23 (0.01%)

 TASI 7,999.57 (0.78%)  QE Index 10,253.54 (0.13%)

 S&P 500 3,110.29 0.22%  MSCI EM 1,048.55 0.38%

 Gold 1,458.17 (0.26%)  Brent Oil 63.65 0.41%

*As of market close, except for commodities at spot price as of 8.1am CLT. • MENA Markets: Egypt’s benchmark EGX 30 ended down on Sunday, weakened by COMI, SWDY and ORAS. UAE’s ADSMI slipped, pushed by telecommunication and energy stocks. Meanwhile, DFMGI hit the green zone, helped by and real estate stocks. In , TASI fell, pressured by its materials and banks sectors. • Global Markets: Asian shares were up cautiously on Monday on hopes for a trade deal between the US and China. Oil rose on Monday, while gold prices were down due to the unclear trade negotiations between the US and China.

Number of the Day EGP585mn Oriental Weavers Carpet’ (ORWE) backlog of export incentives at the end of September 2019.

Today’s Quiz What is the market share of Oriental Weavers Carpet (ORWE) in Egypt? (Answer located at the end of this newsletter)

Corporate Events

Company Ticker Event Type Event Date Reason Extracted Oils ZEOT Dividends 25-Nov Ex-date (EGP0.05/share); Last eligible date (24 November) Al Ezz for Ceramics and Porcelain ECAP EGM 25-Nov Reviewing Agenda Items Alexandria Spinning & Weaving SPIN AGM 26-Nov Reviewing Agenda Items Middle Egypt Flour Mills CEFM Dividends 26-Nov Ex-date (EGP4.75/share); Last eligible date (25 November) Extracted Oils ZEOT Dividends 27-Nov Payment date (EGP0.05/share) Middle Egypt Flour Mills CEFM Dividends 28-Nov Payment date (EGP4.75/share) Egyptian Resorts Co. EGTS Lawsuit 28-Nov Legal disputes relevant to the company Investment & Real Estate CIRA AGM 28-Nov Reviewing Agenda Items Arabian Cement ARCC AGM 1-Dec Discuss cash dividends Canal Shipping Agencies CSAG Dividends 2-Dec Ex-date (EGP0.79/share); Last eligible date (1December) Zahraa El Maadi Investment ZMID AGM 2-Dec Discuss cash dividends Canal Shipping Agencies CSAG Dividends 4-Dec Payment date (EGP0.79/share) Amer Group Holding AMER Lawsuit 8-Dec Legal diputes relevant to to Porto Tartous project Raya Holding RAYA AGM 12-Dec Reviewing Agenda Items Abou Kir Fertilizers & Chemicals ABUK Dividends 31-Dec Payment date (EGP1.00/share) Eastern Company EAST Dividends 16-Jan Payment date (EGP0.40/share) Egyptian Resorts Co. EGTS Lawsuit 18-Jan Legal disputes relevant to the company Alexandria Mineral Oils AMOC Dividends 27-Feb Payment date (EGP0.10/share)

Quiz Answer 85%.

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