Naeem cuts Mobinil fair value to L.E 116.8

Naeem Holding cut Egyptian Company for Mobile Services (Mobinil) (EMOB) fair value to L.E 116.8 per share.

It also downgraded 2011 and 2012 earnings estimates by 75% and 58%, respectively, which reflects tax changes, lower subscribers additions and reduced ARPUs owing to (among other factors) an expected upsurge in promotional activity and a loss of market share of inbound roaming.

Naeem concluded that the poor near-term operating environment is discounted and that Mobinil shares are oversold.

Nevertheless, It believed that the weak sentiment ahead of 3Q11 results and news flow over the boycott means that investors should time a re-entry immediately post 3Q11 results. If OTH split not approved, investors should immediately “BUY” Mobinil.