Robust financial position with bright prospects for SODIC this year, Pharos

HC Securities and Investments and Pharos Holding advised investors to buy stocks of Sixth of October Development and Investment (SODIC) with the backdrop of positive forecasts for the company’s performance during 2020 as well as the delivery of a plethora of projects West Cairo and in Sheikh Zayed City.

The investment banks specified SODIC stock’s fair value at EGP29.8 to EGP29.6, up from today’s closing price of EGP9.55.

With revenues edging up to EGP5.3bn from EGP3,7bn, SODIC recorded net profits worth EGP719mln in 2019, up from EGP449mln in 2018.

Last year’s sales reached EGP7.3bn up from EGP5.5bn in 2018.

Owing to bleak outlook for the Egyptian real estate market, SODIC share is undervalued in market tradings, but its market target is EGP29.6, according to HC Securities and Investments.

SODIC is expected to record revenues worth EGP23bn from 2020 to 202 owing to mega projects being under construction in West Cairo.

Additionally, SODIC managed last year to get a 2.1mln sqm land at Sheikh Zayed extension road under a deal with Egypt’s New Urban Communities Authority.

Vye and The Estate projects, both launched jointly with NUCA on 1mln sqm land in 2019, will yield revenues worth EGP50bn.

Despite potential headwinds, 2020 will be a lucky year for SODIC owing to itlaunching the above-mentioned projects alongside SODIC East project.

With it poised to collect cash worth EGP18bn in 2020 to 2027, SODIC will be well positioned especially after real estate sector start to rebound.

On the other hand, Pharos Holding recommended portfolio weight of SODIC share to be increased owing to its higher fair value worth EGP29.87.

SODIC performed well in the fourth quarter of 2019 in light of it recording sales of EGP3.8bn and revenues rising by 8.9% to EGP1.9bn, according to Pharos Holding.

SODIC is looking to increase sales by 15% to EGP8.4bn in 2020, qualifying it to become Egypt’s only listed company that seeks to increase sales this year.