1. Business Description
Eastern Company S.A.E. (ticker: EAST) sells cigarettes, cigars and moassel products. It also exports its products primarily to Kingdom of Saudi Arabia, the Malawi, Bahrain, Madagascar, Kuwait, Qatar, Lebanon, Jordan, the United Arab Emirates, Libya, Iraq, Oman, Germany, Austria, Malaysia, Japan, Thailand, Canada and the Unites States. It is listed on the Egyptian Stock Exchange and included among the companies in the EGX 30.
|Parent Company||The Holding Company for Chemical Industries|
|Phone||20 2 38164444|
2. Financial Statements
The following section presents a summary of the financial and operating performance of Eastern Tobacco over the past 3 years. It presents the firm’s Key Financials. All is Data retrieved from Eastern Tobacco’s Financial Statement.
The following table presents the Revenues, Revenue Growth, Net Income and Net Income Margin of the company. Net Income Margin is defined as Net Income divided by Revenues of the same year.
|in Millions of EGP||Dec-31-2018||Dec-31-2019||LTM Sep-30-2020*|
*LTM Sep-2020 Growth is computed using LTM Sep-2020 Revenues and LTM Sep-2019 Revenues
2.2 Mini Balance Sheet
The following table presents the Liabilities, Equity and Total Assets of Eastern Tobacco. Total Assets equals the sum of Total Liabilities and Total Equity.
|in Millions of EGP||Dec-31-2018||Dec-31-2019||Sep-30-2020|
2.3 MINI Cash Flow Statement
The following table presents the Cash from Operations, Cash from Investing, Cash from Financing and Net Change in Cash. Net Change in Cash equals the sum of Cash from Operations, Cash from Investing and Cash from Financing.
|in Millions of EGP||Dec-31-2018||Dec-31-2019||LTM Sep-30-2020|
|Cash from Operations||2,093.44||5,842.59||7,387.78|
|Cash from Investing||(931.64)||(2,438.74)||(2,395.46)|
|Cash from Financing||(4,443.66)||(2,550.36)||(2,471.19)|
|Net Change in Cash||(3,307.95)||2,269.11||4,118.28|
The market capitalization of Eastern Tobacco equals the share price times the number of shares outstanding.
|Share Price||12.93||EGP / share|
|Number of Shares||2,203,000,000||shares|
|Market Capitalization||28,484,790,000||billion EGP|
The following table presents the Total Enterprise Value/LTM Total Revenue, P/LTM EPS and P/BV. The multiple used is the average multiple over the period.
|TEV/LTM Total Revenue||3.32x||2.29x||1.44x|
5. Top Holders
The following table lists the top holders of the company as of November 2020.
|Holder||Common Stock Equivalent Held||% of Total Shares Outstanding||Market Value (EGP in mm)|
|Chemical Industries Holding Company S.A.E.|
|LGM Investments Limited||44,659,340||2.03||578.2|
|The Vanguard Group, Inc.||33,659,912||1.53||435.8|
6. Analyst Consensus
Based on 5 Analysts, has a median price target of 19 EGP / share. This represents an approx. 46% upside potential from the current share price of 12.93 (as of the 12th of December 2020).
- EAST reports a EGP4.28 billion profit in FY 2020/2021
- EAST reports a EGP1.16 billion profit in Q1 2020/2021
- EAST shareholders approve a 1.4 EGP/ share dividend
- EAST announced a new price list for some products, including cigars and tobacco.
- EAST Targets EGP4.2 billion Sales in FY2020/2021
|1. Commercial International Bank -Egypt S.A.E|
|2. Eastern Company S. A. E.|
|3. Telecom Egypt Company S.A.E.|
|4. El Sewedy Electric Company|
|5. Talaat Mostafa Group Holding Company TMG Holding (S.A.E)|
|6. Emaar Misr for Development Company (S.A.E.)|
|7. EFG-Hermes Holding S.A.E|
|8. Heliopolis Co. for Housing & Development|
|9. Cairo for Investment & Real Estate Development S.A.E.|
|10. Credit Agricole – Egypt Bank (S.A.E.)|
|11. Cleopatra Hospital Group S.A.E.|
|12.Edita Food Industries Company (S.A.E)|
|13. Juhayna Food Industries S.A.E.|
|14. Madinet Nasr for Housing & Development S.A.E.|
|15. Ibn Sina Pharma (S.A.E)|
|16. Orascom Development Egypt (S.A.E)|
|17. Oriental Weavers Carpets Company (S.A.E)|
|18. Sixth of October for Development and Investment Company “SODIC” (S.A.E.)|
|19. Pioneers Holding Company For Financial Investments|
|20. Sidi Kerir Petrochemicals Co.|
|21. Palm Hills Developments S.A.E.|
|22. Export Development Bank of Egypt (S.A.E.)|
|23. Ezz Steel Company|
|24. GB Auto (S.A.E.)|
|25. Egyptian Iron and Steel Company|
|26. Orascom Investment Holding S.A.E.|
|27. Qalaa Holdings S.A.E.|
|28. Beltone Financial Holding SAE|
|29. Egypt Kuwait Holding Company (S.A.E.)|
|30. Dice Sport & Casual Wear|
9. Additional Information
Eastern Tobacco has an extremely attractive dividend yield of over 10%. This is mainly attributable to Eastern Tobacco’s huge cash pile which exceeds EGP 11 billion as of September 2020.
Ethical Investment strategies usually exclude tobacco and alcohol manufacturers and certain other sectors from the investment universe.