Equity Analysis /
Egypt

B Investments Holding: Initiation of Coverage – Embracing ingenuity

  • We Initiate coverage on BINV with an Overweight rating, based on equity value of EGP2,827mn, fair value of EGP17.67/sh

  • Upside risks include higher than expected growth in the value of the current investments, among others

  • Downside risks include lower than expected growth of the company’s investments, among others

Bassma Bakry

Valuation Summary & Brief Story

We Initiate coverage on BINV with an overweight recommendation, based on an equity value of EGP2,827 million and a fair value of EGP17.67/share, offering an upside of 105%. We valued BINV using the sum of the parts methodology by looking at each individual investment.

B Investments is a leading Egyptian private equity firm that was established in 2006, and it currently has a portfolio of 8 investments across different sectors including real estate, downstream oil and gas, IT systems integration, non-banking financial services, fintech, food and beverages, renewable energy, and specialized healthcare.

The company is currently looking into additional opportunities in the F&B (retail and manufacturing), specialized healthcare (fertility area), and education segments. It is worth mentioning that the company recently entered the healthcare segment in a focused manner, since it established a specialized healthcare investments arm (B Healthcare Investments), targeting investments in the specialized healthcare sector, and it recently signed transaction documents to acquire a 51% stake in the Egyptian IVF Center, however, the transaction is still pending regulatory approvals. Additionally, the company has recently received a binding offer from Solutions by STC to sell its stake in Giza Systems (IT systems integration investment). Lastly, the company currently has an exercisable put option to sell its remaining stake in TOTAL energies Egypt (investment in downstream oil and gas sector) and it is currently assessing the right time to exit.

B investments is currently managed by BPE Partners, a leading Egyptian private equity manager. It went public on the Egyptian Stock Exchange in 2018 aiming to gain access to capital, identify growth capital investment opportunities, and make sizeable investments through its unique co-investment model. Furthermore, BINV follows a clear dividends and returns strategy

Upside & Downside Risks

Upside Triggers

  • Higher than expected growth in the value of the current investments.

  • Shorter than expected time frame for finalizing new investments.

  • Lower than expected operating costs. 

Downside Risks

  • Lower than expected growth of the company’s investments.

  • Longer than expected time frame for finalizing new investments.

  • Higher than expected operating costs.