Cairo - Mubasher: Pharos Research said it has reiterated its buy recommendation for Madinet Nasr Housing and Development and kept its fair value at EGP 20.39/shr.
Madinet Nasr Housing MNHD recorded EGP365.1 million in contracted sales for September 2016, showing an increase of 771.1% year-on-year.
This brought the firm’s Q3-2016 contracted sales to EGP1.1 billion, up 567.5% year-on-year, and sets the record as the firm’s highest quarterly contracted sales.
MNHD’s contracted sales during Q3-2016 were mainly supported by contracted sales in the T Zone project and exclude the proceeds from Capital Gardens, MNHD’s co-development project with Palm Hills Developments.
Morover, MNHD’s YTD contracted sales, excluding Capital Gardens, stand at EGP1.6 billion. It is highly likely that the firm will exceeds Pharos FY2016 expected contracted sales of EGP1.8 billion, especially given that the firm is planning to launch its new project on the Sarai land plot before the end of the year.
Pharos believes that MNHD has again shown its ability to develop and sell its development projects. Its sales figures suggest that the firm can monetize some of its vast raw land by developing it, leaving a significant portion to be used in co-development agreements, or to be simply sold off to other real estate developers in need of land bank replenishment.
Pharos noted that it reiterated its buy recommendation for the company's stock since its market price still does not fully take into account the value of the firm’s Sarai land plot, which sits on a land area of 5.5 million sqm in close proximity to the New Administrative Capital.
Sarai contributes EGP9.87/share to our total FV of EGP20.39/share.
