CI Capital cuts Mobinil’s fair value to EGP 121, assigns “Underweight”

CI Capital Research (CICR) reduced the fair price of the Egyptian Company for Mobile Services (Mobinil) by 14% to EGP121. It also slashed the telco’s strike price from EGP 143 to EGP 121, on Q1-11 figures and increase in net debt. CICR downgraded the stock to “Underweight”.

Mobinil has been licensed to provide mobile money transfer, pending an improvement in Egypt’s security situation.

In the long term, the mobile banking is seen to contribute 4% to FY19 top line. However, revenue growth may be hurt in the short term due to the latest boycott campaigns, competition and market saturation.

Mobinil’s Q1 net earnings dived to EGP 23 million, compared to EGP 357 million in the year-ago period, hurt by the lower-than-expected EBITDA margin. The internet services cut, and lower sales, coupled with paralyzed economic activity weighed on the telecom operator’s figures.