Strong investment case combined with
good macro outlook
􀀗 All three companies have strong liquidity
positions; current prices for Telecom
Egypt and Mobinil imply excessive
market risk premium
􀀗 Orascom Telecom, Neutral (V), still
exposed to negative outlook in Pakistan;
we prefer Telecom Egypt , Overweight (V)
and Mobinil, Overweight
In our The Year Ahead 2009: CEEMEA report published 16
December 2008, we considered three scenarios – central,
optimistic and pessimistic. Our central scenario assumes that
commodity prices stay weak, CEEMEA currencies
depreciate and there is little scope for interest rates to fall. In
this scenario we want to own segments which both give
some beta, should a rally materialise, and offer some
protection on the downside. In this context domestic Egypt
(telecom) is one of the most attractive markets (see more on
scenarios on page 12).
In this report, we explore the Egyptian telecom market in
more detail and examine the key factors that will define
performance in 2009. Egyptian telecom operators continue
to register good top-line growth. The last quarterly results,
Q3 2008, indicated margin improvement for all Egyptian
telecom players. Also, all three companies featured in this
report have strong liquidity (see more on page 3).
We believe that current prices for Telecom Egypt (TE) and
Mobinil imply excessive market risk premium (see more on
page 8) and the market does not value TE’s stake in Vodafone
Egypt(VE) fairly following its delisting (see more on p20).
Orascom Telecom’s (OT) margin is expected to suffer due
to ongoing economic turmoil in Pakistan, which has led
to significant currency depreciation and reduced the
group’s bottom line.
We have a positive outlook for Egyptian telcos in 2009. Our
rating on TE remains Overweight, with a volatility flag now
added. Our target falls from EGP24 to EGP21. We remain
Overweight on Mobinil with a EGP180 target (from EGP230).
We retain a Neutral (V) on OT with our target cut from USD30
to USD26 per GDR (equivalent to EGP29 for the local).

目录

2
Telecoms, Media & Technology
Egypt
28 January 2009
abc
Investment Summary 3
Macro outlook relatively
strong 10
Company profiles 13
Mobinil 14
Telecom Egypt (TE) 18
Orascom Telecom(OT) 22
Disclosure appendix 28
Disclaimer 32