10-Aug-2017
Medinet Nasr Housing - 2Q17 conference call takeaways
Rating: Buy
Target Price: EGP14.2
Closing Price: EGP11.1
Management of Medinet Nasr Housing conducted a conference call to discuss 2Q17 operational and financial results and outlook. The call was conducted by Ahmed Hitamy (CEO), Mohamed Abdel Salam (CFO), and Salah Katamish (IR Director). Below are the main takeaways from the call.
Management is confident to achieve its 2017 contracted sales target of EGP5bn
A new launch at Taj City is planned for 3Q17 with a total size of EGP1.5bn. Another new launch is planned at Sarai before year-end, with a targeted sales figure of EGP1.0bn. Management has indicated that it reached a level of confidence that allowed it to start “word-of-mouth” marketing of the planned launch. As for the most recent developments on securing the necessary approval for the new masterplan for Taj City, management indicated that the bottleneck in the approval process has been concluded, and that final approval will be soon.
No significant margin compression foreseen from increased cost base
Management does not expect margins to be pressured with the rise in construction costs, as the increase in selling prices more than compensates for it. Selling prices at Sarai have increased by c50% since the first launch in Nov-16. Management does not expect major hikes in prices in the short term, like the ones experienced over the past year, and has hence guided for c15% Y-o-Y increase in selling prices, in line with stabilising inflation rates.
More construction contracts to be awarded before year-end
Management is targeting to award a number of construction awards before year-end, with a focus on the T-Zone. More construction activity will also take place at Sarai, particularly with the start of work on the infrastructure for the 5.5mn sqm plot. The company is on track to deliver 500 units at Tag Sultan during the year (146 delivered in 1H17).
Eyeing new land plots, with a focus on West Cairo and North Coast
Management has indicated that it is eyeing new land plots, with a focus on West Cairo and the North Coast, to diversify its product offering. More interest is given to revenue-sharing agreements offered by NUCA. We note that the company’s current land bank is concentrated in the East Cairo.
Mai Attia
Sara Boutros
Target Price: EGP14.2
Closing Price: EGP11.1
Management of Medinet Nasr Housing conducted a conference call to discuss 2Q17 operational and financial results and outlook. The call was conducted by Ahmed Hitamy (CEO), Mohamed Abdel Salam (CFO), and Salah Katamish (IR Director). Below are the main takeaways from the call.
Management is confident to achieve its 2017 contracted sales target of EGP5bn
A new launch at Taj City is planned for 3Q17 with a total size of EGP1.5bn. Another new launch is planned at Sarai before year-end, with a targeted sales figure of EGP1.0bn. Management has indicated that it reached a level of confidence that allowed it to start “word-of-mouth” marketing of the planned launch. As for the most recent developments on securing the necessary approval for the new masterplan for Taj City, management indicated that the bottleneck in the approval process has been concluded, and that final approval will be soon.
No significant margin compression foreseen from increased cost base
Management does not expect margins to be pressured with the rise in construction costs, as the increase in selling prices more than compensates for it. Selling prices at Sarai have increased by c50% since the first launch in Nov-16. Management does not expect major hikes in prices in the short term, like the ones experienced over the past year, and has hence guided for c15% Y-o-Y increase in selling prices, in line with stabilising inflation rates.
More construction contracts to be awarded before year-end
Management is targeting to award a number of construction awards before year-end, with a focus on the T-Zone. More construction activity will also take place at Sarai, particularly with the start of work on the infrastructure for the 5.5mn sqm plot. The company is on track to deliver 500 units at Tag Sultan during the year (146 delivered in 1H17).
Eyeing new land plots, with a focus on West Cairo and North Coast
Management has indicated that it is eyeing new land plots, with a focus on West Cairo and the North Coast, to diversify its product offering. More interest is given to revenue-sharing agreements offered by NUCA. We note that the company’s current land bank is concentrated in the East Cairo.
Mai Attia
Sara Boutros