The Board of Directors of Arab Cotton Ginning (ACGC) has proposed the distribution of a cash dividend of 0.2/share (cEGP53mn) for 2017, coming in ahead of our estimate for a dividend payment of cEGP0.13/share (cEGP34mn). While the dividend offers a positive surprise to our estimates, we highlight that the yield is still unattractive at only c3.5%, while other names in the Egyptian equities space offer much higher yields. It is worth mentioning that the proposed dividend still requires shareholder approval, which is expected to be given during the company's AGM set for 30 September. 
 
We would argue that ACGC's is a play on the monetisation of its unutilised land bank (rather than a dividend story), which seems to have already been priced in by the market at current trading levels; hence, we remain Neutral on ACGC. 
 
Arab Cotton Ginning: EGP5.78 as of 26 Sep 2017, Rating: Neutral, TP: EGP4.75/share, MCap: USD87mn, ACGC EY/ACGC.CA