Equity Analysis /

EAST 2018 valuation update: A pure price play

    Tellimer Research
    25 December 2017
    Published byTellimer Research
    Upgrade FV to EGP500; Maintain Equalweight: The key modifications to our assumptions have been in both revenue streams and COGS appreciation: 1) We adjusted our model based on the new pricing scheme, presented by EAST’s new ex-factory price list and the ‘sin tax’ which will be applied late 2018; 2) We placed higher-priced inventory that will be allocated to production lines in the coming periods, matching current market conditions. EAST is trading at P/E17/18 of 15.5x vs. peer group average of 17.0x and EV/EBITDA17/18 of 13.0x vs. peer group average of 12.0x.Therefore, we update our FV to EGP500/share and retain an Equalweight recommendation.