Cairo – Mubasher: Okaz Research upgraded the fair value (FV) of Sixth of October for Development and Investment (SODIC) to EGP 18.52 from EGP 15.93 with an upside potential of 37%, according to a report published on Monday.
The research agency accordingly kept a “Strong ‘Buy recommendation” on the stock, the report revealed.
Okaz noted that SODIC consolidated profits leapt more than two-fold to EGP 310.7 million in the fiscal year 2015 versus EGP 142.4 million in the fiscal year 2014, to hit 9% higher than the research firm’s forecasts.
Further, the company’s consolidated revenues rose 9% year-on-year in 2015 to EGP 1,610.3 million from EGP 1,471.4 million, 15% more than our estimate for the year, the report added.
“The hike in the company’s consolidated top line was mainly due to a 7% increase in revenues from real estate and land sales that recorded EGP 1,401.4mn in FY2015 compared to EGP 1,310.3mn in FY2014 which mainly came as a result of a more than 3-fold hike in revenues from residential unit sales in Westown Residences (WTR)”, the research firm explained.
The cost of sales rose 39% in the first nine months of 2016 to record EGP 738.9 million compared with EGP 531.6 million, leading consolidated revenues within the valuation period to EGP 19.46 billion.
Over the period extending from 2016 to 2020, consolidated top line is expected to grow along with total consolidated revenues to EGP 19.46 billion, Okaz said.
Recurring revenues to hit EGP 851.3 million over the same period as leasing revenues will start by the fiscal year 2018 to register EGP 96.8 million, EGP 116.2 million, and EGP 226.4 million in 2018, 2019, and 2020 respectively.
On Monday, the stock quote closed at EGP 13.04, 5.1% lower.
