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GB AUTO. AUTO.CA/AUTO EY | Hold Recommendation | Moderate Risk | LTFV EGP33.3 | Target Price EGP33.3 | Analyst: Ahmed Abdel Ghani. Investment case Largest market share in Passenger Car segment, at 28%. Engaged at each level of the automotive industry value chain. - PowerPoint PPT Presentation
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Investment case• Largest market share in Passenger Car segment, at 28%.• Engaged at each level of the automotive industry value chain.• Strong partnership with OEMs (Hyundai, Volvo and Mitsubishi).• Largest player in three-wheelers, with a market share of c.99%.
Upside Catalysts• Supplying new PC brand.• Offering new Hyundai models. • Launch of warehousing and logistics facility.• Launch of new Passenger Car financing company.
Downside Risks• Foreign exchange fluctuations.• Halting the renewal of the Verna assembling license.• Competition within industry.• Delay in economic recovery
GB AUTO
Company Profile
GB Auto [AUTO] was founded by Sadek & Kamal Ghabbour in 1940. In 1956 the company was incorporated for trade in automotive-related products & construction materials whilst later on, in the early 1970s, it began securing agent licenses for passenger car, bus and automotive part distributors. In July 2007, GB Auto shares began trading on the Egyptian Exchange (EGX) after the completion of a capital increase through an IPO. GB Auto was the first (and is currently the only car assemblycompany) floating shares in EGX. The company has an authorized capital of GP400mn and an issued capital of EGP129mn, distributed over 129mn shares at a par value of EGP1/share.
Shareholder Structure• Dr.Raouf Ghabbour and Family 73.5%• Free Float 26.5%
52-Week Performance & Share Data (*EGX suspended 27th Jan – 23rd Mar 2011)
AUTO.CA/AUTO EY | Hold Recommendation | Moderate Risk | LTFV EGP33.3 | Target Price EGP33.3 | Analyst: Ahmed Abdel Ghani
Key Performance Indicators
EGP mn/ FY End:December 2007a 2008a 2009a 2010a 2011e 2012e
Revenue 4,630.1 5,192.4 4,258.4 6,873.8 7,760.9 10,035.1 Growth Rate (%) 49.2 12.1 -18.0 61.4 12.9 29.3EBITDA 487.1 646.4 405.7 602.6 563.3 839.0 Growth Rate (%) 16.9 32.7 -37.2 48.5 -6.5 48.9EBITDA margin (%) 10.5 12.4 9.5 8.8 7.3 8.4Net Income 433.7 415.9 201.4 257.9 237.5 423.5 Growth Rate (%) 54.1 -4.1 -51.6 28.0 -7.9 78.3Net margin (%) 9.4% 8.0% 4.7% 3.8% 3.1% 4.2%
P ER 9.6x 10.0x 20.7x 16.2x 17.6x 9.9xP /BV 3.1x 2.4x 2.3x 2.3x 2.1x 1.9xEV/EBITDA 10.2x 7.7x 12.0x 7.0x 9.2x 5.6xNet debt/EBITDA 1.6x 1.3x 1.7x 0.1x 1.8x 0.6xDividend Yield N/A N/A 3.1% 3.1% 2.7% 4.8%
Source: CICR Database
Sector: AutomotiveISIN: EGS673T1C012Last P rice (EGP ) 33.2252 Week High 55.0052 Week Low 24.10100-day Av. Volume 120 (000' shares per day)
No. of Shares (mn) 125.7 Market Cap (EGP mn) 4,177 *P rices as at close on 30th May 2011
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Shrs ('000)EGP Volume AUTO EGX 30 rebased