Cairo – Mubasher: SODIC stock quote’s rally reduces the magnitude of future short-term price increases, according to a research note by Pharos Research.
The real estate developer is trading close to its 52-week high of EGP 14.76/share and is 20% below its consensus fair value of EGP 17.08 per share.
Over the last quarter, the stock has been the top performer among our real estate coverage universe with a price increase of 39.4% quarter-to-date and 48.6% year-to-date.
In addition, the stock has been always reacting positively to devaluation news, whether in March 2016 or in late July 2016.
This impressive performance was driven by the company’s contracted sales and deliveries on an annual basis.
Sales surged to EGP 1.2 billion in the second quarter, higher 90.2% year-on-year and 75.8% quarter-on-quarter.
This rise was reflected in the firm’s EGP 7.5 billion receivables by the end of the first half of 2016, compared to EGP 6.9 billion by the end of 2015.
Moreover, the company achieved sales in East Cairo, West Cairo, and the North Coast up to 60%, 34%, and 6% respectively as well as launching new phases in Villette, Eastown, Courtyards, and Forty West.
Regarding deliveries, the firms revenues’ increased by 44.5% year-on-year and 133.0% quarter-on-quarter to EGP 435.2 million.
“This boost in topline comes as a result of the company’s increase in deliveries during the quarter, which amounted to 201 units, 21.1% higher than the number of units delivered during the same period last year, and double the number of units delivered during the previous quarter”, according to the report.
Margins saw a decline with gross processing margin at 35.6% in 2Q16 compared to 38.6% in Q2-15 and 41.3% in Q1-16, the research firm noted, explain that still “many of the units delivered during the quarter were the first batch of apartments in Eastown”.
The real estate developer posted net profits of EGP 103.13 million ($11.58 million) for the second quarter of 2016, compared with EGP 72.98 million ($8.2 million) for the comparable period of the previous year.
As for the first half of 2016, SODIC reported net profits of EGP 157.78 million up by 3.6% from EGP 152.29 million for the same period of 2015.
