Impressive first quarter
TMGH achieved strong 1Q22 sales of EGP5.4 billion, up 55.2% y/y and up 10.5% q/q. We forecast FY22 sales of EGP24.4 billion in our EGP16.66/share valuation.
Real estate revenue grew 3.5% y/y to EGP2.1 billion, hotel revenue grew 122.4% y/y to EGP387.0 million, and recurring services and activities revenue grew 8.2% y/y to EGP556.0 million, taking total revenue up 12.0% y/y to EGP3.0 billion in 1Q22. We forecast FY22 hotel revenue of EGP1.2 billion in our EGP16.66/share valuation.
Gross profit in 1Q22 reached EGP1.1 billion, up 15.4% y/y and down 13.8% q/q, leading to a GPM of 35.9%, higher annually and sequentially.
Net profit grew 26.4% y/y and 796.8% q/q to EGP565.0 million in 1Q22, the q/q surge resulting from 4Q21 having witnessed goodwill write-down. NPM expanded y/y and q/q to 18.7%.
We remind you that TMGH is targeting FY22 sales of around EGP24.0 billion, which is almost equal to our FY22 sales forecast of EGP24.4 billion projected in our EGP16.66/share valuation. Given TMGH’s strong sales performance and solid recurring income portfolio, of which retail revenue is expected to witness a jump in FY22 as more Open Air Mall space becomes operational, we maintain our Overweight recommendation of TMGH based on our FV of EGP16.66/share.