Investment case
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Investment case • A real estate developer that is targeting the upper class of the economy by providing high quality real- estate products. • To diversify its revenue line, SODIC will establish a new hotel at its Westown project in cooperation with Travco Group. • Furthermore, SODIC cooperated with SIAC to develop the office space component of its Westown project. • SODIC is expanding regionally, by acquiring a 50% stake in a Syrian real estate developer Palmyra that owns 2.6mn sqm of land bank in Syria. Furthermore, SODIC plans to start construction of its Tilal Al Yasmin project in Syria. Downside Risks • OCDI faces a depleting land bank, that it has to purchase new land plots at the current high prices. • A local political and economic situation that has a negative impact on the demand for new real estate units. • Furthermore, the company may witness an increasing number of cancellations. Sixth of October Developments (SODIC) Company Profile SODIC was incorporated in 1996 as a public joint stock company. SODIC’s main activities are real-estate and land development. The company pioneered the development of new urban communities through its mixed-use, Beverly Hills project situated over c.1.75 mn sqm. It formed a joint venture with the Lebanese real estate giant SOLIDERE to develop “downtown” style centers for Sheikh Zayed City and New Cairo. Shareholder Structure • Free Float 60.85% • October Development Property Ltd 15.59% • Olayan Saudi Investment Ltd 12.39% • Soliman bn Abd Elmohsan bn Abd Allah 10.06% • Other 1.11% 52-Week Performance & Share Data (*EGX suspended 27 th Jan – 23 rd Mar 2011) OCDI.CA/OCDI EY Equity | Not covered by CI Capital Key Performance Indicators S ector: H ousing & R eal Estate EG P m n/FY End: D ecem ber 2007a 2008a 2009a R evenue 486.6 232.1 30.7 G rowth R ate (% ) 35.4 -52.3 -86.8 EB ITD A 273.2 20.0 (141.5) G rowth R ate (% ) 20.5 -92.7 n/m EB ITD A m argin (% ) 56.1 8.6 -461.2 NetIncom e 331.2 27.3 (114.4) G rowth R ate (% ) 48.5 (91.8) n/m N etm argin (% ) 68.1% 11.7% -372.8% PER 6.9x 84.1x n/a P /BV 1.3x 1.3x 1.3x EV/EB ITD A 7.3x 103.1x NM N etdebt/EB ITDA -1.1x -11.4x NM D ividend Yield n/a 0.8% 0.1% S o urc e: C IC R D atabas e Sector: H o using & T ouristic R eal E sta IS IN : EG S65851C 015 LastP rice (E G P) 68.57 52 W eek H igh 117.00 52 W eek Low 54.77 100-day A v. Volum e 105 (000' shares perday) N o. o fS hares (m n) 28.4 M arketC ap (E G Pmn 1,948 *P rices as atclo se on 30th M ay 2011 - 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 40.0 50.0 60.0 70.0 80.0 90.0 100.0 110.0 120.0 Jun-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Shrs(mn) EGP Volume OCDI Date
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Sixth of October Developments (SODIC). OCDI.CA/OCDI EY Equity | Not covered by CI Capital. Investment case A real estate developer that is targeting the upper class of the economy by providing high quality real-estate products. - PowerPoint PPT Presentation
Transcript of Investment case
Investment case• A real estate developer that is targeting the upper class of the economy by providing
high quality real-estate products.• To diversify its revenue line, SODIC will establish a new hotel at its Westown project in
cooperation with Travco Group.• Furthermore, SODIC cooperated with SIAC to develop the office space component of
its Westown project. • SODIC is expanding regionally, by acquiring a 50% stake in a Syrian real estate
developer Palmyra that owns 2.6mn sqm of land bank in Syria. Furthermore, SODIC plans to start construction of its Tilal Al Yasmin project in Syria.
Downside Risks• OCDI faces a depleting land bank, that it has to purchase new land plots at the current
high prices.• A local political and economic situation that has a negative impact on the demand for
new real estate units.• Furthermore, the company may witness an increasing number of cancellations.
Sixth of October Developments (SODIC)
Company Profile
SODIC was incorporated in 1996 as a public joint stock company. SODIC’s main activities are real-estate and land development. The company pioneered the development of new urban communities through its mixed-use, Beverly Hills project situated over c.1.75 mn sqm. It formed a joint venture with the Lebanese real estate giant SOLIDERE to develop “downtown” style centers for Sheikh Zayed City and New Cairo.
Shareholder Structure• Free Float 60.85%• October Development Property Ltd 15.59%• Olayan Saudi Investment Ltd 12.39%• Soliman bn Abd Elmohsan bn Abd Allah 10.06%• Other 1.11%
52-Week Performance & Share Data (*EGX suspended 27th Jan – 23rd Mar 2011)
OCDI.CA/OCDI EY Equity | Not covered by CI Capital
Key Performance IndicatorsSector: Housing & Real EstateEGP mn/ FY End: December 2007a 2008a 2009a
Revenue 486.6 232.1 30.7 Growth Rate (%) 35.4 -52.3 -86.8EBITDA 273.2 20.0 (141.5) Growth Rate (%) 20.5 -92.7 n/mEBITDA margin (%) 56.1 8.6 -461.2Net Income 331.2 27.3 (114.4) Growth Rate (%) 48.5 (91.8) n/mNet margin (%) 68.1% 11.7% -372.8%
P ER 6.9x 84.1x n/aP /BV 1.3x 1.3x 1.3xEV/EBITDA 7.3x 103.1x NMNet debt/EBITDA -1.1x -11.4x NMDividend Yield n/a 0.8% 0.1%
Source: CICR Database
Sector: Housing & Touristic Real EstateISIN: EGS65851C015Last P rice (EGP ) 68.5752 Week High 117.0052 Week Low 54.77100-day Av. Volume 105 (000' shares per day)
No. of Shares (mn) 28.4 Market Cap (EGP mn) 1,948 *P rices as at close on 30th May 2011
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