Egypt Real Estate Sector - Talaat Moustafa Group

05 October 2011
Valuation and Forecasts
Figure 22: Palm Hills: Adjusted SOTP valuation summary
in EGP millions, unless otherwise stated
Project Valuation methodology Valuation PHD stake (%) Value to PHD
Launched projects
Golf Views DCF 360 100% 360
Golf ext DCF 758 100% 758
Katamya DCF 355 100% 355
Bambo Ext DCF 35 100% 35
Hacienda Bay DCF 981 100% 981
Casa DCF 103 51% 53
The Village DCF 72 100% 72
Palm Parks DCF 319 100% 319
Village ext (Gate) DCF 272 51% 139
Botanica - Forty Nine DCF 64 100% 64
Village Garden (6 October) DCF 55 51% 28
Village Garden (New Cairo) DCF 203 89% 181
Park View DCF 128 51% 65
Hacienda White 1 & 2 DCF 496 88% 436
Total Launched Projects 4,201 3,846
Macor - Hotels DCF 272 60% 163
Rental Portfolio DCF 479 100% 479
Total EV (EGP Mn) 4,487
Cash (2010A) 148
Equity investments (2010A) 0.2
Outstanding debt (2010A) (922)
Outstanding land liability
(1,846)
(Discounted)
Minority interest (2010A) (481)
Equity value 1,387
Number of shares (m) 1,048
TP 1.32
Current Price 1.22
Premium or (Discount) 8.2%
Source: Company data, Credit Suisse estimates
Figure 23: Palm hills: Old vs. New Estimates
in EGP millions, unless otherwise stated
2011E 2012E 2013E Cumulative
New
Old Change
(%)
New
Old Change
(%)
New
Old Change
(%)
New
(2011-
13E)
Old
(2011-
13E)
Change
(%)
Revenue 799 1,837 -56.5% 1,725 2,282 -24.4% 2,335 2,225 5.0% 4,858 6,343 -23.4%
EBITDA 8 810 -99.1% 693 1,171 -40.8% 1,056 1,149 -8.2% 1,757 3,131 -43.9%
EBITDA Margin % 0.9% 44.1% 40.2% 51.3% 45.2% 51.7% 36% 49%
Net Income -57 668 -108.5% 510 911 -44.1% 810 896 -9.6% 1,263 2,475 -49.0%
Source: Credit Suisse estimates
Companies Mentioned (Price as of 03 Oct 11)
Palm Hills Development Company (PHDC.CA, £E1.26, UNDERPERFORM [V], TP £E1.32)
Six of October Development and Investment Company (OCDI.CA, £E12.88, NEUTRAL, TP £E15.66)
Talaat Moustafa Group (TMGH.CA, £E3.60, OUTPERFORM, TP £E5.67)
Egypt Real Estate Sector 12