MM Group intends to contribute 49.9% to Basata non-banking financial services

Alyaa Stohy
2 Min Read

MM Group for Industry and International Trade approved the participation in the Basata Financial Holding Company, which operates in the activity of non-banking financial services, with an amount of EGP 30m, which represents 49.9% of the company’s capital.

MM Group said, in a statement to the Egyptian Exchange on Saturday, that it will contribute to increasing the capital of Ibtikar Holding Company for Financial Investments by EGP 150m making the contribution limit amounting to EGP 365m instead of EGP 350m.

Pharos Research sees that Samsung and Nokia’s new models introduction is expected to bear fruit in 4Q20, allowing Kanawat sales to recover after 1H20 weakness.  MTIE expects K shops to breakeven by the end of 2H20, lifting some burden off bottom line.

Despite starting 2020 with a weak performance on local and global challenges, we believe that 3Q20 signs of recovery in consumer electronics segment, the introduction of new models, adding new home appliances to the company’s distribution network, replicating MTIE’s model in Kanawat, that is in addition to the positive developments in Ebtikar, a flat YoY performance could still be achieved overall. MTIE is currently trading at 2021 P/E of 12.6x and EV/EBITDA of 9.5x.

MTIE reported 3Q20 consolidated revenues of EGP 2.21bn (-7.6% YoY, +4.6% QoQ). The annual decline in sales can be attributed to weak auto sales during 3Q20, on the back of seasonality.

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