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Rank: Elder Joined: 7/21/2010 Posts: 6,176 Location: nairobi
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I like this buy recommendations, what of dyer and blair?? "Don't let the fear of losing be greater than the excitement of winning."
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Rank: Member Joined: 4/25/2012 Posts: 110
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Pesa Nane wrote:2015 Market recommendations - Source Faida IB
Stock: ARM - BUY
Our target price of KES 141.07 provides a 64.0% upside potential from the current market of (KES 86.00). With significant limestone deposits in East Africa and
investment in integrated capacity, we see ARM as being well positioned to integrate vertically. This will come with significant market power which we expect
to sustain growth in the future. The Dangote's still need to be watched in this cement arena especially when they are directly fighting for the same resources in Kitui, and of cause market, with ARM. RinkThere is nothing as dangerous as an Idea, when there is only one Idea
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Rank: Member Joined: 7/1/2014 Posts: 895 Location: sky
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MoneyMonger wrote:Pesa Nane wrote:2015 Market recommendations - Source Faida IB
Stock: ARM - BUY
Our target price of KES 141.07 provides a 64.0% upside potential from the current market of (KES 86.00). With significant limestone deposits in East Africa and
investment in integrated capacity, we see ARM as being well positioned to integrate vertically. This will come with significant market power which we expect
to sustain growth in the future. The Dangote's still need to be watched in this cement arena especially when they are directly fighting for the same resources in Kitui, and of cause market, with ARM. Rink this recommendation has been their for the whole of 2014, let see if it will materialize this year There are only two emotions in the stock market, fear and hope. The problem is, you hope when you should fear and fear when you should hope
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Rank: Elder Joined: 5/25/2012 Posts: 4,105 Location: 08c
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TheGeek wrote:Pesa Nane kindly load full reports on the googlegroup. Done Pesa Nane plans to be shilingi when he grows up.
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Rank: Elder Joined: 5/25/2012 Posts: 4,105 Location: 08c
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January 2015 stock picks - Source: NIC COOP BANK BUY at TP 25.84 Current price KES 18.90 ♦ Relatively poor 3Q14 slowed y/y performance. Co-op’s 9M14 PBT growth was much slower at 2.5%y/y, surprising on the downside given that 1H14 PBT grew at 15%y/y. The q/q growth of 35% was weaker than the 52% growth recorded over a similar period last year, resulting in a higher base. ♦ NIMs expanded by 40bps y/y and 70bps q/q to 9.5% defying the trend across the sector and in spite of increased lending to the corporate sector. Going forward, NIMs expansion could be maintained given the launch of M-Coop Cash, a mobile banking platform targeting the high margin micro and consumer segments offering unsecured loans of between KES 100 and KES 200,000 attracting a one off interest rate of 7% (lower than CBA’s M-Shwari rate of 7.5%, but higher than EQB’s 1-2%) and repayable within 30 days. ♦ Increased presence translating into stronger loan growth. Loan book expanded by 31% y/y in 3Q14 benefiting from an expansion drive that has seen 49 new branches over the last 3 years, with 20 added in FY13. Management expects the increased presence to help sustain strong loan growth. ♦ Accelerating growth in non-funded income to support earnings as net interest margins decline. NIR increased by 23% y/y in 3Q14. NIR expected to improve due to increased transactions as customers numbers grow. ♦ Operating expenses expected to ease as COOP slows down on branch expansion in favor of consolidation of the existing branches. CIR stood at 58% in 3Q14. Break even of new branches also key to reducing CIR Pesa Nane plans to be shilingi when he grows up.
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Rank: Elder Joined: 5/25/2012 Posts: 4,105 Location: 08c
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January 2015 stock picks - Source: NIC KENYA RE (Not Rated) BUY Current price KES 17.35 ♦ Recent acquisition of minority stake in Africa Trade Insurance Agency (ATI) adds a new revenue stream and deepens market presence. ATI has operations in Kenya, Tanzania and Zambia. ♦ Recorded a 6% increase in 1H14 PBT to KES 1.7bn as gross written premiums increased by 22% to KES 4.9bn attributable to new business shares across the pan African region. This highlights a growing appetite for insurance products across the region. ♦ Enjoys guaranteed premiums of 18% from Kenyan insurance companies offering it a steady flow of premiums. ♦ Has a wide presence across Africa providing reinsurance services to more than 159 companies in over 45 countries in Africa, Middle East and Asia. Plans to operate and provide services in Southern Africa following its successful expansion into West African market in 2012. Pesa Nane plans to be shilingi when he grows up.
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Rank: Elder Joined: 5/25/2012 Posts: 4,105 Location: 08c
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Quote:SUNTRA WEEKLY INSIGHT - APRIL 20, 2015.
MARKET WATCH
Kenya power..........HOLD..........Kshs 17.15
The net profit increased by 39% to Kshs 4B largely benefitting from an upward tarriff review. new connections are expected to drive revenue growth as they increased by 243,279 bringing the total customer base to 3 million attributed to spending on infrastructure. The proposed increase of an additional 98 new substations
is expected to reduce frequent supply disruptions that
have hurt its relationship with businesses and households. The government recently ruled out demonopolising of power distribution in the forseeable future. Pesa Nane plans to be shilingi when he grows up.
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Rank: Elder Joined: 5/25/2012 Posts: 4,105 Location: 08c
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Quote:SUNTRA WEEKLY INSIGHT - APRIL 20, 2015.
MARKET WATCH
Scan Group..........BUY..........Kshs 43.50
The company is receiving more support from the parent company WPP after an increase in stakeholding saw Scangroup be upgraded to a subsidiary (was previously an associate). It plans to boost revenues from digital advertising leveraging off WPP Digital, the digital arm of WPP Plc. Scangroup expects to increase its
geographical presence and product offering across sub Saharan Africa through mergers and acquisitions. Pesa Nane plans to be shilingi when he grows up.
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Rank: Elder Joined: 5/25/2012 Posts: 4,105 Location: 08c
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Quote:SUNTRA WEEKLY INSIGHT - APRIL 20, 2015.
MARKET WATCH
Uchumi..........SELL..........Kshs 10.25
Weak correlation between branch expansion and revenue growth, implying poor branch positioning and inferior layout and offering. Expansion into smaller towns is unlikely to give the supermarket company the customer demand needed to drive revenues. Uchumi is yet to benefit form the devolved government structure. Finance cost went up 2 times after the supermarket borrowed Kshs 600 M repayable within one year and this will strain
the workng capital of Uchumi. Pesa Nane plans to be shilingi when he grows up.
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Rank: Elder Joined: 5/25/2012 Posts: 4,105 Location: 08c
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Quote:SUNTRA WEEKLY INSIGHT - APRIL 20, 2015.
MARKET WATCH
ARM..........BUY.......... Kshs 74.50
Margins are expected to expand from use of own clinker and a reduction in production costs will drive the cement manufacturers revenues. Earnings stand to benefit from investment deduction allowances, however this will be countered by the expensing of previously capitalized interest costs on compleation of Tanzanian projects. Tanzania is poised to be ARMs main market given the existence of limestone deposits in its Tanga location.The company intends to put up a plant in Kitui which should increase revenues given the large demand for cement in the Country. Pesa Nane plans to be shilingi when he grows up.
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Rank: Veteran Joined: 8/16/2009 Posts: 994
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Can't agree more especially on KRE, ARM and SCAN which are 3 of the 4 counters I currently hold. The forth one is KENO. ARM will also benefit from conversion of short term to long term debts in the current plan they are working on with CFCStanbic. Scan plans to reduce depedency on Kenyan Market which in 2013 accounted for around 80% of revenues. It also wants to increase percentage of digital advertising, Research and PR thereby reducing dependency on media advertising. In 2013 their investment income was down 75% due to lower interest rates and use of cash to finance acquisitions. In Nigeria they had issues with one firm associated with Ogilvy but the other one firm was doing well there. Time is money, so money is time. Money saved is time gained in reverse! Money stores your life’s energy. You expend your energy, get paid money, and store that money for a future purchase made in a currency.
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Rank: Veteran Joined: 8/16/2009 Posts: 994
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Pesa Nane wrote:Quote:SUNTRA WEEKLY INSIGHT - APRIL 20, 2015.
MARKET WATCH
Uchumi..........SELL..........Kshs 10.25
Weak correlation between branch expansion and revenue growth, implying poor branch positioning and inferior layout and offering. Expansion into smaller towns is unlikely to give the supermarket company the customer demand needed to drive revenues. Uchumi is yet to benefit form the devolved government structure. Finance cost went up 2 times after the supermarket borrowed Kshs 600 M repayable within one year and this will strain
the workng capital of Uchumi. What a good way to describe Uchumi. I saw a branch coming up in Limuru (it is the size of Jipange in Thika Road. I then looked oposite the road and noticed that Tuskys are putting up a Mega (of sorts) branch. Even a mad man will tell you that Uchumi will in no way compete with that giant in such close proximity. Time is money, so money is time. Money saved is time gained in reverse! Money stores your life’s energy. You expend your energy, get paid money, and store that money for a future purchase made in a currency.
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Rank: Elder Joined: 5/25/2012 Posts: 4,105 Location: 08c
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Source AIB Capital Weekly Stock Recommendations: Week of 27th April 2015 Quote:CENTUM-BUY at Ksh 60 and below
Recently acquired 10,000 acres of land at a cost of approximately Ksh 2 billion in Vipingo, Kilifi County.
The company has 66% shareholding in K-rep bank.
Centum has partnered with Gulf Energy to execute the Lamu 960 mw coal power plant tender.
CMA issued asset management licenses, therefore increasing services offered. Targeting Kes 30bn of Assets under management in 2014. Plans to increase geographical footprint to the rest of Africa with a target of at least 50% of the portfolio outside Kenya.
The company’s intends to further diversify into the agricultural and power sector, key growth sectors in Sub Saharan Africa.
We expect good performance for the company in the financial year 2015. Results expected around June 2015. Pesa Nane plans to be shilingi when he grows up.
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Rank: Elder Joined: 5/25/2012 Posts: 4,105 Location: 08c
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Source AIB Capital Weekly Stock Recommendations: Week of 27th April 2015 Quote:Housing Finance- BUY, Target price Kes 45.39
The group’s profit before tax was at Ksh 1.4 billion in 2014, similar to results announced in 2013 weighed down by heavy investment in building human resource to support the banking strategy; investment in the core banking system and the branch expansion. Net loans and
advances grew 28% to Ksh 45 billion from Ksh Ksh 35 billion in 2013
KBS is expected to further boost earnings in the current financial year with the completion of Precious gardens phase one; Kahawa Downs , Komarock phase 2 and K Mall to be completed in 2015
The Company raised Ksh 3.5 billion during the rights issue to fund the growth and expansion plans. The expansion of housing finance branch network is also expected to provide increased opportunities for
mobilizing lower costs deposits to finance growth.
We expect good growth in earnings in the current financial year as contributions from the subsidiaries are expected to increase significantly. * Komarock Phase 2 is an error. Should be Komarock Phase 5B * Also SunCity Mall to be completed in 2015 * County Expansion to 30 branches from current 16 * Ground breaking of Komarock Phase 5c at the tail end of 2015 Pesa Nane plans to be shilingi when he grows up.
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Rank: Elder Joined: 5/25/2012 Posts: 4,105 Location: 08c
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Source AIB Capital Weekly Stock Recommendations: Week of 27th April 2015 Quote:EQUITY BANK, BUY at Ksh 47 and below
The group’s profit after tax increased by 28% to Ksh 17 billion from Ksh 13 billion in 2013 with a 36% growth in loan book to Ksh 26.2 billion 2014 and a 41% growth in Total Assets to Ksh 70.7 billion in 2014.
Equity bank is planning to expand to 10 other countries in Africa which has seen it take up Ksh 36 billion in Loans and creating approximately 400 million new
shares.
We expect a dilution and an increase in finance costs as a result of the new loans and additional shares. We however, expect this to be outweighed by the benefits that will accrue from regional expansion in the long-run.
The share price has dropped to the lowest levels this year at Ksh 47 which we believe is a good entry point. Pesa Nane plans to be shilingi when he grows up.
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Rank: Elder Joined: 5/25/2012 Posts: 4,105 Location: 08c
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Source AIB Capital Weekly Stock Recommendations: Week of 27th April 2015 Quote:COOP BANK- BUY
The group reported a profit before tax of Ksh 10.92 billion same level of profitability as in the previous year after removing a one off staff retrenchment cost of Ksh 1.34 billion. The bank expects to save at least Ksh 500 million annually out of this rationalization.
Profit after tax was Ksh 8 billion compared to Ksh 9.1 billion previous year on account of a higher tax bracket of 30% from 20% the previous year. Asset book rose 31% Interest income 20% and non funded income 17%.
The bank engaged Mc Kinsey and company to undertake “growth and efficiency review”. We expect a reduction in operating expenses as a result of the costs
cutting measures employed. Management estimates a reduction in the cost to income ratio to 53% in 2015 and below 50% by 2017, 30% reduction of cost of funds
by 2015, growth of atleast 30% in 2015. We expect improved profitability in 2015.
Expected to announce the first quarter results end of this month.
Pesa Nane plans to be shilingi when he grows up.
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Rank: Elder Joined: 5/25/2012 Posts: 4,105 Location: 08c
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Source AIB Capital Weekly Stock Recommendations: Week of 27th April 2015 Quote:CFC BANK- BUY, Target price Kes 144
Net interest income went up 12.2% to Kes 8.5 billion, Non-interest income went down 3% to Kes 8.41 billion, Net loans and advances were also down 2.5% to Kes 101 billion.
Recently raised Kshs 4 billion through a bonds issue aimed at accelerating its project financing mainly concentrated in power, infrastructure and commodities as
well as to increase its branch network.
We expect a growth rate of 11.45% in E.P.S in 2015 translating to an E.P.S of Kes 16.03. Pesa Nane plans to be shilingi when he grows up.
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Rank: Elder Joined: 5/25/2012 Posts: 4,105 Location: 08c
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Source AIB Capital Weekly Stock Recommendations: Week of 27th April 2015 Quote:NIC BANK- BUY, target price 77
In its 2014 results, Net interest income rose 10% to Ksh 8 billion, Non interest income was up 11% to 3.6 bn, Loans and advances were up 22% to 102 billion and Profit after tax rose 27% to Ksh 4.1 billion.
The Company plans to increase its country wide presence by opening more branches as well as focus on regional expansion. We therefore expect increased revenues from the loan book growth and from new business.
The Company recently opened a new leasing subsidiary, NIC Leasing Limited Liability Partnership, in a bid to tap into the the growing leasing market. It has partnered with Mercantile Finance which it too fully owned and is a subsidiary to the Bank.
The company is currently trading at a P/E of X8.06 against the sector average of X10.40, with an EPS of Ksh 7.07.  Pesa Nane plans to be shilingi when he grows up.
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Rank: Elder Joined: 5/25/2012 Posts: 4,105 Location: 08c
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Source AIB Capital Weekly Stock Recommendations: Week of 27th April 2015 Quote:KENYA RE -BUY
The company’s profit after tax went up 12% in 2014 to Ksh 3.12 billion from Ksh 2.79 billion in 2013. Its gross written premiums grew by Ksh 11.5 billion as
a result of overall insurance premium growth in Kenya and the rest of Africa where the corporation derives the bulk of its revenues.
Investment income also rose 14% to Ksh 2.6 billion from Ksh 2.3 billion with major drivers for growth being earnings from fixed income instruments and
rental income.
The corporation continues to earn new business shares and enjoy tremendous support from cedants across the chosen markets.
In Kenya undewriters are now required to cede 20% of reinsurance business, up from the current 18% following an increase by the government. The government has also extended the duration for the mandatory Cessions by 5years to 2020 securing a steady flow of business for the next five years.
The company is currently trading below book value, at a P/B of 0.67X Pesa Nane plans to be shilingi when he grows up.
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Rank: Elder Joined: 5/25/2012 Posts: 4,105 Location: 08c
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Source AIB Capital Weekly Stock Recommendations: Week of 27th April 2015 Quote:CIC Insurance- BUY at Kshs 9
The group reported a drop 16.5% drop in Profit after tax in 2014 to Ksh 1 billion from Ksh 1.3 billion in 2013 due to increases in claims particularly on the medical business. Assets increased 39% to Ksh 23.7
billion
The company has hired financial consultancy firm Deloitte to advise on the restructuring of the Company after its 2014 performance. The move is aimed at cutting costs and boosting the insurers efficiency.
CIC is the leading provider of micro insurance in the region, capitalizing on strategic partnerships with banks, Sacco’s and monetary financial Institutions with alternative distribution channels such as Bancassurance and agency banking to increase micro-insurance on penetration with products more tailored to the low income population. Regional expansion and real estate projects also expected to boost its revenues.
We hold a Long-term positive view on the counter based on the vast potential for micro insurance in Kenya and the regional economies. Pesa Nane plans to be shilingi when he grows up.
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