Earnings Report /
Egypt

Talaat Moustafa Group Holding: 1Q22 – Kicking off strong

  • TMGH achieved strong 1Q22 sales of EGP5.4 billion, up 55.2% y/y and up 10.5% q/q

  • Real estate, hotel, and recurring revenue grew, taking total revenue up 12.0% y/y to EGP3.0 billion in 1Q22

  • Net profit grew 26.4% y/y and 796.8% q/q to EGP565.0 million in 1Q22

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%.

Maintain Overweight

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.