CIRA’s total number of enrolled students increased 17% Y-o-Y to 37,400 students for the 2019-20 academic year, coming broadly in line with our estimate (+2% vs. EFGe). The growth came mainly from the higher-ed segment, with total enrolled students at Badr University in Cairo (BUC) up 31% Y-o-Y to 10.3k students (in line) and utilisation rate increasing to 79% (from 61% in 2018/19). While construction of the seven new faculties at BUC was concluded ahead of schedule, the university is still awaiting the presidential decree approval and is expecting to launch the new majors in the Spring 2020 semester. 
 
Meanwhile, K-12 students grew 12% Y-o-Y to 27.1k (+4% vs. EFGe), with utilisation reaching 96% (vs. 92% in 2018/19). The numbers include 800-900 students enrolled at the British Columbia Canadian International School (BCCIS) located in Al Shorouq City, in which CIRA recently acquired a 60% stake (via its parent company, Star Light Educational DMCC Corp). 
 
Overall, solid enrolment numbers, and we are especially impressed by the fact that CIRA managed to hit our higher-education student numbers without launching new majors. We are Buyers of CIRA, as there is room to ramp-up utilisation, in addition to capacity additions in an underserved market that are expected to drive a c29% 5YR revenue CAGR (earnings c36%). We also like CIRA’s impressive profitability profile, negative cash conversion cycle (60-70% of tuition collected before the start of academic year) and liquid balance sheet. 

Hatem Alaa, Nada Amin, Mirna Maher
 
Cairo Investment & Real Estate Development (CIRA): EGP12.82 as of 2 Oct. 2019, Rating: Buy, TP: EGP13.00/share, MCap: USD460mn, CIRA EY/CIRA.CA