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nd
May 2013
Research Analyst:
Geoffrey Maina geoffrey.maina@oldmutualkenya.com
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Investment Thesis We initiate our coverage on Housing Finance Company of Kenya with a STRONG BUY recommendation based on our fair value of KES 33.75, representing 35.00% upside
potential from the current price of KES 25.00. The company is currently trading on a P/E and P/B of 7.93x and 1.15x respectively against the sectors P/E and P/B of 9.75x Fair Value: KES 33.75 and 2.08x respectively and our positive sentiments are supported by sturdy balance sheet growth (6yr-CAGR of 9.97% in FY2017), driven by notable growth in both mortgage Current Share: KES 25.00 advances and customer deposits respectively. Date: May 2, 2013 We estimate FY13E EPS of KES 4.15 (31.6% y/y growth, and a forward DPS of KES 1.57. Despite a slight decline in PBT in 2012 to KES 907 Million (-6.99%), we project that FY2013 pre-tax earnings will grow by 54.0% to stand at KES 1,397 Million driven by Bloomberg ticker growth in mortgage sales. The new housing units being constructed in the Komarock Housing Finance estate where the company is putting up 168 homes and the new joint venture initiative Old Mutual Securities Research where the company is targeting to construct 550 units, unit apartments targeting the low and middle-income earners, will drive this growth in the current financial year. Key Points The basis for this rating reflects the price disparity between current market prices and Share statistics the fundamentally valued intrinsic price, along with the following meaningful catalysts, quantitative and qualitative: both Current Price (KES) We forecast a 13.3% growth in mortgage advances driven by favourable growth Issued Shares (Mn) in customer deposits (+21.3%y/y). In FY2012, Mortgage advances grew by 20.10% y/y from KES 25.2B in 2011 to KES 30.3B in 2012, with a projected growth of Market Cap (KES Mn) 10.10% 6yr CAGR. Year End The company secured funding from International Finance Corporation to a tune of USD20 million to build environmentally friendly housing, which will enable 12 Months High (KES) the company, grow its mortgage book by 13.3%y/y in FY2013. The facility from IFC will enable the company diversify its funding and also help reduce reliance 12 Months Low (KES) on short term volatile local corporate deposits thus reducing asset liability mismatch. USD/KES (spot) In 2012, the mortgage lender undertook the project to expand its Komarock estate in Nairobi dubbed Komarock Phase 5A. The development involves construction of 162 homes and a commercial Centre on 13.5 acres of prime land Holdings: in Komarock estate, with a target retail price of KES 6.8M per unit. The target Kenya Building Society Ltd completion date and occupancy is Q3 of 2013. Kenya Building Society a wholly First Permanent (EA) Ltd Housing Finance Insurance owned subsidiary of HF is undertaking this project. Agency Ltd The firm recently entered into joint venture agreements with landowners in prime areas to construct one, two and three bedroom apartments. These joint ventures will enable the firm raise its involvement in the supply of middle to lower income housing. The firm is targeting to develop over 550 residential units in the current financial year mainly through this concept. Housing Finance also plans to tap opportunities in the counties as most counties lack decent housing through the Public Private Partnerships as it to intensify its presence in property development to sustain growth in the long term. HFs issue of the second tranche bond with target amount of KES 2.9B, raised KES 5.2B representing a 76% over subscription rate. This performance shows market performance and renewed investor interest in the growth prospects of the company as well as the good debt rating. Creating Value from Wind Year-end EBIT KES EBIT EPS DPS RoA NAV/Share December Mn Margin % Source; NSE, OMS estimates 2012A 908 7.82 3.15 1.37 1.81% 21.79
2013F 2014F 2015F 2016F 2017F 1,397 1,979 2,954 3,517 4,348 9.23 10.51 12.60 11.88 11.62 4.15 5.87 8.77 10.44 12.91 1.57 1.97 2.30 2.53 2.76 2.14% 2.60% 3.39% 3.67% 4.20% 24.37 28.27 34.74 42.65 52.80
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% 24.85 10.13 8.85 6.82 3.65 2.28 1.09 1.08 0.79 40.46 100.00
Housing Finance (HF) was incorporated in 1965, in accordance with the Central Banks Act as a mortgage provider (only full-fledged mortgage provider), under the name Housing Finance Company of Kenya Limited. The main objective was to carry out governments policy of promoting thrift and home ownership. This was to be achieved by providing savings and mortgage facilities to the Kenyan public, a policy made more urgent by the fact that Kenya had just gained its national independence two years prior to its incorporation. Housing Finance is in the business of providing mortgages, financial services and a wide range of other related services to homeowners and property developers in Kenya. As a key way to take these vital services closer to the people, it operates wide network of ten branches spread around six major urban centers in Kenya. The company has progressed from being just a mortgage financier to providing integrated property solutions for the Kenyan Market. Such developments can be seen with the introduction of Property Point, a subsidiary of Housing Finance. The company has not only been able to provide easy avenues for identifying the property of choice but has also brought together a host of partners and suppliers that will help the customers access services such as power, cabling, tiling among other services useful for home improvement and finishing. Housing Finance, through its division Project Finance, is also involved with the development of large scale properties for both small and large property developers who wish to put up multiple units either as build to rent or build to sell. Another key development for Housing Finance was the revival of Kenya Building Society, a wholly owned subsidiary of Housing Finance that specializes in the development of housing estate projects. In 2011 and 2012, the bank was awarded the best bank in product innovation two years in a row. To increase its branch out reach, HF has partnered with Post Bank via agency banking agreement so as to enable its customers make deposits and cash withdrawals through Post banks 99 branches Country wide. In 2002, the company re-branded as a new, vibrant, re-focused Company. Orange: To reflect a new beginning filled with radiance and optimism White: To denote the clear path to attaining ones dreams Blue: To reflect the strength and success of their heritage
Recent Awards/Notable Achievements Best Bank in Mortgage Finance - 2012 2nd Best Bank in Product Marketing - Banking Awards 2012 Best Real Estate Lending Institution in Africa Award - African Real Estate and Housing Finance (AREHF) Awards - 2012
Senior Management Steve Omenge Mainda (Chairman), Frank Ireri (CEO), Sam Waweru (CFO).
Currently, HF focuses on providing integrated financial solutions, provision of residential and commercial property, focuses on both supply and demand of property and aims to be the clear leader in this arena for the benefit of its stakeholders
The turnaround strategy launched in 2007 helped the company refocus on its business growth and shareholder value enhancement through dividend payments.
In 2007, HF launched a 5 year strategy (2007 2011) which was meant to help them expand their mortgage financing footprint. This was a turnaround strategy as the company was previously holding large portfolio of non-performing loans which was stifling its growth and also shareholder value wasnt been maximized as the company had gone for 7 years in a row without paying dividends. The strategy objectives were met as the company has returned to profitability path and dividend payment growth as evidenced in the previous performance. 2012-2016 Strategy: At the beginning of last year, the company launched another strategic period dubbed the growth strategy. The company, will be focusing on organic growth and will be focusing on connecting with customers through building strong relationships and providing personalized and targeted solutions for their investment needs. The focus is on four key pillars: customer, growth, real estate investment & development and funding. One of the strategys objectives was the revival of the Kenya Building Society, which was successfully revived and is currently undertaking the construction of the Komarock Phase 5A estate comprising 162 housing units and a commercial centre, due for completion later this year.
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Key Ratios
FY2012
Strong management team to enhance shareholder value: HF has a strong management team that continues to deliver value to its shareholders through innovation of new and better products. The firm employs and retains some of the most competent staff in the sector who further benefit from training in the firm. The current CEO Mr. Frank Ireri was appointed Managing Director in 2006. Prior to his appointment he was with Barclays Kenya as Africa Operations Director. Mr. Ireri has successfully stirred the company back to profitability as the company has continued to grow under his tenure. 2012 performance Recap: Housing Finance, posted a PBT of KES 907 Million for the year ended December 2012.This was a 7% drop from KES 975 Million, posted the previous period. PAT however increased to KES 743 Million up from KES 622 million the previous year. This increase in after tax profit was attributed to a lower tax expense in 2012. EPS increased by 19% y/y due to a significant jump in deferred tax asset. CTI rose to 51% in FY12 compared to 47% in FY11 as operating costs were up 8.9% y/y as compared to operating income (+1.9% y/y). Mortgage loans and advances climbed by 20.1% to KES 30.3B, while customer deposits rose by 22.8% to KES 22.94B. Due to the high interest rate environment witnessed last year gross NPLs jumped 48% though loan loss provisions slipped 1%. The company announced a final dividend of KES 0.70 having paid an interim dividend of KES 0.70 last year, bringing the full year dividend to KES 1.40.
Outlook Summary 2013F 2017F: Increasing appetite to finance mortgage projects, delivery on cost management initiatives and anticipated stable macro-economic factors are factors expected to sustain the firms growth strategy over the next 5 years. We forecast an average EPS growth of 6.13% CAGR for the bank over the next five years. We expect average NIM to remain above FY11-12 average of 5.6% (7.2% average 2013F-2017F) we expect mortgage sales growth to be driven by accommodative lending rates and improved lending opportunities to potential individual home owners, SMEs and real estate sectors. We forecast an average (2013F 2017 F) CTI ratio of 47.5% compared to the current CTI ratio of 50.5%. This expected improvement is due to managements prudent cost management. The company is in the process of implementing a new core banking system that is expected to greatly improve on operational efficiency.
Product Offerings:As a way of positioning itself as a key player in enabling Kenyans build, buy and own homes, HF has successfully positioned itself as a main player in the property value chain under an ambitious Property Supply Strategy. The strategy targeting developers, landowners, professional service providers and construction materials has led to creation of new business in a backward integration of the main mortgage business influencing property development to support the companys core business of mortgage financing. Retail / Corporate Products HF Current Account This account fully caters for the property development needs and promises to link clients to top construction professionals in the housing industry to work with when undertaking their property projects. First Hop Account This targeted towards young people who want to develop the savings discipline. It enables clients to save up to Sh.4, 000 per month tax-free. In addition, interest on the account for amounts below Sh.3, 000,000 is attract tax. The accounts key advantage is that it builds deposits and its benefits accrue when one invests in a housing project. Crossover Savings Account This account offers very attractive features that enables clients save for long-term projects such as home ownership or any other dreams they have. These features include earning high interest on the account deposits as well as earning loyalty points on every deposit, access to 100% mortgage financing, up to 25% discount on commitment fees, up to 2% discount on mortgage interest when applying for a mortgage loan. The Housing Development Bond (HDB): This suits those clients who want to set aside money for putting up a home. The HDB requires a minimum of Sh.50, 000 and offers a saving of 5% on withholding tax. HDB gives you the flexibility of savings and withdrawal in case there is an urgent need for the money. Mortgage Products Owner Occupier Mortgage: This is a loan given to a borrower who will occupy the property. In addition to the competitive rates offered by the company, the Kenya tax law offers relief on interest charged.
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Plot Purchase Mortgage This loan helps satisfy the aspirations of many Kenyans by providing access to funds that will contribute toward the purchase of a plot. Construction Mortgages This facility allows those clients who already own a plot to borrow and build a residential unit on it. Investment Residential Mortgage This loan facility is for those individuals who want to buy another home to join in the already existing stable of investments. Vuna Hela Mortgage Through regular repayment, one acquires equity in their mortgage equivalent to the amount already paid up. Acquired equity can be availed for further property development or other purposes. Money is lend on the value of the equity. Makao - Makao is a convenient building solution from that aims to help homeowners build a home cost-effectively by bringing together a consortium of professionals in the construction industry. In this unique product, one is able to access qualified personnel who make the building process friendly and seamless. A variety of house designs have been developed for the home owners to choose from depending on their requirements and financial ability Cyclical Mortgage: The Cyclical Mortgage Product is a product that offers customers convenience of repaying their mortgages in pre-agreed cycles (Bi-Monthly, Quarterly, Semi- Annually) that correspond to their income receipts. This product is especially suited for those in the informal sector whose income flow is varied. Its a major diversion from traditional mortgages that suit salaried employees in the formal sector.
The CBR cut last year stimulated a revival in project finance, as many developers returned to construction and new project financing.
Implementation of County Authorities will also create growth in the real estate sector, and this will lead to mortgage growth going forward as developers gain on project implementations.
Key constraints to mortgage market growth: Affordability Risk management Funding Land
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Affordability: The lack of affordability is a combination of factors which includes the low levels of income (especially in rural areas), and the high and volatile level of inflation and relatively high interest margins charged by banks. Issues on the supply side also create a price barrier for many, where the cost of even the most basic new house is out of reach for the vast majority.
As of 2010, Credit Reference Bureau Kenya coverage was at 4.9% of adult population
Risk Management: Deficiencies in a lenders ability to capture or understand risks mean that lenders have to charge a high risk premium. This is due to the fact that credit bureaus do not yet offer comprehensive credit histories, there is a high level of informality, and the value of collateral is tempered by deficiencies in the foreclosure process, resale market and the valuation process. Funding: This is ranked as the biggest obstacle but the facts suggest a relatively liquid banking sector with a low loan to deposit ratio. The issue is the availability of long term funds and the mismatch between short term deposits and the longer term mortgage loans. However, the current ratios suggest that banks could engage in further maturity transformation before hitting limits. Some of the large lenders however are constrained and certainly if current levels of growth continue, the rest of the sector will be also. Housing/Land Market: The lack of affordable construction materials combined with difficulties in accessing land make it difficult to expand access to homeownership. In particular the multiple land titling and registration mechanisms are grossly inefficient and overly complex.
Frequency Response
21 15 11 10 7 6 4 4 3 2 1
of
If Kenya is to start tackling, its unmet housing demand it will need to mobilize large amounts of private capital. Growing the size and reach of the mortgage market is part of the solution for the upper and middle-income urban segments of the population. The government has put in place measures to encourage lending by banks. For example, the Central Bank of Kenya reduced cash reserve ratios for banks, intended to free up more money for lending. Currently the rate is at 5.25%. Research by the World Bank indicates, however, that the two largest mortgage lenders are liquidity constrained and this undermines their further growth. Kenyan banks have been on an aggressive expansion drive in the region, and are now represented in Uganda, Southern Sudan, Tanzania and Rwanda. The Nairobi Stock Exchange has been a useful arena for raising money to fund these activities, with them often oversubscribed. The most recent is the DTB and NIC Bank rights issues to raise KES 1.8Bn and KES 2Bn, which were oversubscribed by 86% and 238% respectively. Housing Finance issued a 2nd bond tranche in 2012 targeting to raise KES 2.9Bn but it raised KES 5.2Bn representing 76% oversubscription rate. The bond issue attracted both local individual and Institutional investors. The offer for the second tranche of Housing Finance bond which went on offer on 1st October at a fixed rate of 13%. The anticipated listing date was set for 30th October 2012.
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Kenya has a substantial part of the necessary infrastructure for housing lending to take place. There is a well-established and professional valuation industry. The countrys judicial system also allows for non-judicial foreclosure, often considered the most conducive for mortgage lending. The first licensed credit bureau, Credit Reference Bureau Africa (CRB Africa Ltd) was launched in March 2010; The World Banks Doing Business report (2011) states that the credit bureau coverage was about 4.9% of the adult population.
Investments Risks:HF faces various types of risks, which arise from its day-to-day operations. The mainstay of effective risk management is the identification of significant risks, the quantification of the groups risk exposure, actions to limit risk and the constant monitoring of risk. The most vital types of financial risks to which the Group is exposed are; credit risk, liquidity risk and market risk mainly interest rate risk and operational risk. Competition: Kenyas banking sector is a cutthroat business arena, with 43 players (including multinationals) all scrambling for a slice of the pie of the mortgage market. Banks such as Barclays Bank, Standard Chartered Bank and KCB S& L are offering competitive rates at 15.5%, 15.9% and 16% respectively compared to HFs 18% based on the report done by The Mortgage Company for Q4 of 2012. The higher mortgage rates last year was due to high CBR rate but the Central Bank has since then adjusted its rate downwards to 9.5%. For HF to remain the market leader in the mortgage segment, we expect that the company will adjust its lending rate favourably thus reducing on credit risk defaults and also being able to attract new mortgage clients. Mortgage funding Mortgage financing by nature is a long-term investment and the company cannot entirely rely on customer deposits for long-term investments. This is a key challenge to the company since they are targeting more growth they need to secure funding from other sources. To address this constraint the company has floated a corporate bond in the securities market (7-year bond) with pre-determined interest rates to cushion the company against high interest payments because of price volatilities. The company has also secured a USD 20million loan facility from IFC for expansion projects. Given the growth, momentum that the company is showing management needs to plan to secure more funds for the future development needs. Land and Property Registration This is a major constraint to the company given that the land transfer process is grossly inefficient and overly complex. This affects some of the projects start and completion schedules. Such delays are unfavourable to the company since they affect planned income. The multiplicity of forms of tenure and methods of transfer creates some confusion, add costs and creates legal uncertainty. To address this constraint partially, the company has entered into strategic partnerships with landowners through joint venture agreements, where they provide land and the company injects capital for development. The government also needs to make land acquisition process simpler by developing an efficient one-stop shop registry system.
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Weaknesses
The only fully fledged mortgage financial provider Asset Liability mismatch (most deposits have a short-term licensed under the CBK Act, providing specialized maturity while the mortgages have a long-term maturity. mortgage services. The groups primary exposure to credit risk arises through its Pioneered green housing by collaborating with IFC to mortgage advances to customers. provide environmentally friendly housing. Strong and competent management team to steer the firm in its growth strategic phase Strong shareholder base, with Equity Bank as the anchor shareholder. The bank is looking to add revenue from fees and commissions from insuring mortgages HF undertook a project to train 1 million artisans to upgrade their skills. Housing Finance became the first private firm to spearhead a Vision 2030 flagship project through its newly formed Housing Finance Foundation. HF is targeting to train the 1 million artisans by 2016 through its newly formed Housing Finance Foundation. The company formed the Housing Finance Insurance Agency to offer clients complete suite of financial products under one roof. Implementation of strategies (turn around and growth strategies) has given the company clear perspective of where they intend to be.
Opportunities
Threats
Current annual housing deficit of 156,000 per annum Interest rates volatility-High interest rates that prevailed in the against 50,000 housing units built thus increased demand market reduced the appetite for mortgage uptake. for houses. Competition from other banks venturing into the mortgage Innovative products such as cyclical mortgages, Makao business. building solution and home freedom mortgages. Rise in inflation figures, which would lead to increase in market Low mortgage penetration with less than 20,000 interest rates. mortgage accounts in Kenya The company is the second largest mortgage provider in the country. As more Kenyans look to become homeowners, the company is likely benefit HF entered into an agency agreement with Post Bank, to enable the company create an optimal channel distribution mix as a tool to decentralize mortgage market and increase its network reach.
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Key Valuation Parameters FY12A Mortgage sales growth NII margin EPS (KES) RoA RoE P/E (x) P/BV (x) 26% 5.6% 3.2 1.8% 14.5% 7.93 1.15 FY13E 30% 5.9% 4.1 2.1% 17.0% 6.03 1.03 FY14E 24% 6.5% 5.9 2.6% 20.8% 4.26 0.88 FY15E 25% 7.5% 8.8 3.4% 25.2% 2.85 0.71 FY16E 26% 7.7% 10.4 3.7% 24.5% 2.39 0.59 FY17E 26% 8.2% 12.9 4.2% 24.5% 1.94 0.47
Valuation
Discounted Cash Flow Method Risk free* Beta Equity Risk Premium Cost of equity Before tax cost of debt After tax cost of debt *Long-term average yield on 10 year Treasury Bond 13.08% 1.2 5.5% 19.68% 13.00% 9.10%
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Terminal
3,170,320
1,545,314
Based on this analysis, we think HFCK shares equate to a 12-month fair value of KES 33.75 per share suggesting that the company is undervalued based on DCF. We assumed a cost of capital of 19.68% and 5% long-term growth rate.
Sensitivity Analysis
3% 17.68% 18.68% 19.68% 20.68% 21.68% 22.68%
Source; Company Financials, OMS estimates
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2012A 5,068,815 (3,118,780) 1,950,035 73,003 210,884 2,233,922 (1,128,524) 1,105,398 (197,766) 907,632 (164,297) 743,335 3.15 1.37
2013F 6,749,489 (4,315,546) 2,433,943 99,990 224,472 2,758,405 (1,161,198) 1,597,207 (199,790) 1,397,417 (419,225) 978,192 4.15 1.57
2014F 9,268,059 (6,223,418) 3,044,641 163,104 238,936 3,446,681 (1,266,268) 2,180,413 (201,865) 1,978,548 (593,564) 1,384,984 5.87 1.97
2015F 11,216,018 (7,165,848) 4,050,170 243,610 256,919 4,550,699 (1,393,306) 3,157,393 (203,753) 2,953,640 (886,092) 2,067,548 8.77 2.30
2016F 13,215,480 (8,582,936) 4,632,544 351,361 280,310 5,264,215 (1,541,725) 3,722,490 (205,542) 3,516,948 (1,055,084) 2,461,863 10.44 2.53
2017F 15,569,015 (10,171,215) 5,397,801 544,589 296,996 6,239,385 (1,683,686) 4,555,699 (207,403) 4,348,296 (1,304,489) 3,043,807 12.91 2.76
Balance Sheet (KES m) Cash and balances with CBK Government securities Balances due from banks Mortgage Advances Investment in Subsidiary Fixed assets Other assets Total assets Shareholders equity Customer deposits Corporate bond Deposits due to other bank Other liabilities Total equity and liabilities
Source; Company Financials, OMS estimates
2012F 523,801 723,616 7,710,941 30,293,711 716,708 987,800 40,956,577 5,137,244 22,937,649 10,212,633 1,884,725 784,326 40,956,577
2013F 671,152 757,305 8,026,893 34,334,796 130,020 733,839 1,076,442 45,730,447 5,744,189 27,082,306 10,110,507 1,676,657 1,116,788 45,730,447
2014F 830,164 814,758 9,267,631 40,056,293 130,020 892,649 1,313,227 53,304,741 6,665,115 33,192,761 10,009,402 2,255,311 1,182,153 53,304,741
2015F 964,663 976,177 10,496,079 45,930,362 130,020 915,119 1,544,501 60,956,920 8,189,715 38,444,229 9,909,308 2,896,153 1,517,516 60,956,920
2016F 1,014,393 1,196,637 11,148,703 50,850,908 130,020 1,046,338 1,667,302 67,054,300 10,054,335 42,795,925 9,810,215 2,879,674 1,514,151 67,054,301
2017F 1,388,864 1,591,862 12,202,266 53,955,689 130,020 1,189,457 1,969,803 72,427,961 12,447,148 45,539,284 9,712,112 3,139,764 1,589,652 72,427,961
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Peer Comparable
Due to lack of local listed peers, we have shortlisted the major Mortgage financial Institutions in Africa and Middle East as our peer set. The data below summarizes the peer set in terms of market capitalization, current trading prices among other variables.
Ticker Average HFCL KN Equity ABBEYBDS NL Equity UHOMREIT NL Equity RESORTS NL Equity ASOSAVIN NL Equity ABOB OM Equity Name Average HOUSING FINANCE CO LTD ABBEY BUILDING SOCIETY PLC UNION HOMES REAL ESTATE INVE RESORT SAVINGS & LOANS PLC ASO SAVINGS & LOANS PLC AHLI BANK Kenya Nigeria Nigeria Nigeria Nigeria Oman Cntry Mkt Cap 11,495 5,530 3,168 6,594 2,988 2,289 48,403 Current Price 15.0 25.0 0.8 26.4 0.3 0.3 38.3 Px Chg Pct:M-1 -0.7 7.9 -1.9 -3.5 -0.8 -2.6 -3.5 Rev - 1 Yr Gr:Y 27.64 42.52 52.53 -2.02 17.53 EPS - 1 Yr Gr:Y -13.65 19.27 0.00 -89.33 15.44 P/E 24.89 7.93 47.51 26.36 33.56 9.59 ROE 9.49 15.09 3.54 4.21 15.11 Dvd Yld 1.94 5.83 0.00 P/B 1.35 1.15 1.11 0.92 2.29 1.38 1.31
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Key Contacts:
Research Desk: Eric Munywoki eric.munywoki@oldmutualkenya.com Halima Saadia halima.saadia@oldmutualkenya.com Geoffrey Maina
geoffrey.maina@oldmutualkenya.com
Trading Desk: Alistair Gould alistair.gould@oldmutualkenya.com Bedan Kagunda bedan.kagunda@oldmutualkenya.com Institutional sales: Steve Nchoe steve.nchoe@oldmutualkenya.com Stanslaus Kimani stanslaus.kimani@oldmutualkenya.com
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Disclosures
Recommendation Guide:
The Old Mutual Securities recommendation system is based on the difference between the current share price (CSP), and the fair value (FV) of the share as valued by Old Mutual Securities. Rating categories are defined as follow:
Disclaimer:
This report is intended solely for clients and prospective clients of Old Mutual Securities Ltd (OMSL). The research report is based on information from sources that OMSL believes to be reliable. The opinions and information portrayed in this report may change without prior notice to investors. This publication may not be distributed to the public media, quoted, or used by the public media without prior and express written consent of OMSL. Past performance is not indicative of future results. The information, opinions and recommendations contained herein are and must be construed solely as statements of opinion and not statements of fact. This document does not constitute an offer, or the solicitation of an offer, for the sale or purchase of any security. The reader should independently evaluate the investment risks and is solely responsible for their investment decisions. Whilst every care has been taken in preparing this document, no representation, warranty or undertaking (express or implied) is given and no responsibility or liability is accepted by OMSL or any employee of OMSL as to the accuracy, timeliness, completeness merchantability or fitness for any particular purpose of any such recommendation or information contained and opinions expressed herein.
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