【出版时间及名称】：2010年5月埃及地产行业研究报告
        【作者】：af-hc
        【文件格式】：pdf
        【页数】：55
        【目录或简介】：

Land bank to drive valuations for the sector going forward as hotels and
backlog are now fully reflected in the current share price. The stocks under our
coverage now derive 50% of valuation from hotels and backlog, compared to 65% a
quarter ago and almost 100% a year ago. Clearly this shows little upside from projects
under construction and recurring investment income. As such, we believe the next leg
up for the real estate names will come from the inclusion of the land bank.
Since the primary home market better directly captures the Egyptian
domestic demand story, we continue to prefer exposure to companies with a
larger Cairo-oriented land bank. Cairo land is likely to be the first beneficiary of any
further upside as primary home land is more liquid, less dependent on the developer’s
ability to create and execute a master plan, and offers usage flexibility (i.e. varied
purposes rather the almost exclusively residential as in the case of second home
designate land). We especially expect the emerging commercial segment to provide an
immediate boost, with TMG and SODIC being the two main beneficiaries.
We expect new project launches to pickup only gradually but for deliveries to
gain traction starting 2H10. We believe project deliveries will benefit developers
through improved customer confidence and the timely realization of cash flows.
Deliveries will also lead to an upward revaluation of adjacent land. However, we expect
new sales over the medium term to remain at much lower levels relative to the current
combined backlog of companies under our coverage (EGP45 billion worth of sales over
the 2007-2008 peak period). Following that assumption brings us to our premise that
land is likely to be the key valuation driver for the sector.
In the report we conduct an in-depth land bank valuation analysis by
adopting a relative approach, which we label the “sister land approach”. This
allows us to evaluate the market-implied land valuation’s deviation from its fair value,
identifying the most undervalued land portfolios. Accordingly, we estimate that TMG’s
market price implies a discount of 85% to our fair land valuation—the highest in the
peer group—while PHD’s discount is the lowest at only 25%. On a per sqm basis TMG’s
market implied land valuation is the lowest at EGP37/sqm and Medinet Nasr Housing
(MNHD) is the highest at EGP284/sqm.
TMG remains our preferred play on the sector given its exposure to midincome
housing demand in Cairo. We also like MNHD given the potential for land
bank value unlocking as the company commences project launches. Despite our
preference for primary land, we recognize that ERC and ODH offer a good arbitrage
opportunity on the underlying land banks, considering the stocks’ depressed valuations.
We value real estate companies using a combination of DCF and land
valuation. To value the land we use our “sister land approach” and then apply a
uniform 50% discount. Our price targets imply a lower discount to NAV for more mature
players. The sector drivers include indigenous demand and low gearing, which should
sustain the current momentum. Risks largely relate to rising interest rate environment
and inflation which could limit sector growth.

Table of Contents
Tying it all Together 3
TMG 12
Medinet Nasr Housing 21
SODIC 22
Orascom Development Holding 31
Egyptian Resorts Company 40
Palm Hills Holding 41