Eastern Tobacco (EAST.CA) Share Overview

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.

Headquarters	Giza, Egypt
Founded	1920
Industry	Tobacco
Parent Company	The Holding Company for Chemical Industries
Phone	20 2 38164444
Index	EGX 30

Data retrieved from Eastern Tobacco’s Financial Statement

Eastern Tobacco Products — Source: Ahram

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.

2.1 Profitability

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*
Revenues	13,410.01	14,025.47	14,704.51
Growth	27.22%	4.59%	2.69%
Net Income	4,240.60	3,733.30	3,898.64
Margin	31.62%	26.6%	26.5%

Data retrieved from Eastern Tobacco’s Financial Statement
*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
Liabilities	10,614.27	13,600.86	15,305.25
Equity	6,483.27	7,776.11	8,574.49
Total Assets	17,097.5	21,376.97	23,879.75

Data retrieved from Eastern Tobacco’s Financial Statement

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

Data retrieved from Eastern Tobacco’s Financial Statement

3. Capitalization

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

As of 4 December 2020

4. Multiples

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.

Multiple	Dec-31-2018	Dec-31-2019	Dec-12-2020
TEV/LTM Total Revenue	3.32x	2.29x	1.44x
TEV/LTM EBITDA	8.36x	6.28x	3.73x
P/LTM EPS	11.40x	10.23x	7.80x
P/BV	5.01x	4.10x	2.85x

The multiple used is the Average Multiple over the period

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.	1,136,250,000	51.58	14,710.2
Invesco Ltd.	69,251,024	3.14	896.5
LGM Investments Limited	44,659,340	2.03	578.2
The Vanguard Group, Inc.	33,659,912	1.53	435.8
BlackRock, Inc.	30,757,781	1.40	398.2

As of December 2020

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).

7. News

Headlines:

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

8. Egx 30 companies

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.

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