Alexandria Container & Cargo Handling (ALCN) has delivered strong performance in the past, which was boosted by the EGP floatation. ALCN’s tariffs are linked to the USD, while most of its costs are denominated in EGP. ALCN’s business is considered stable, given its strong ties with Egypt’s foreign trade, especially imports which are somewhat resilient at current levels. The outbreak of COVID-19 will pressure ALCN’s performance, however, EGP depreciation may support its performance. Historically, ALCN has been a generous dividend payer, and we expect it to remain so in the future. We initiate coverage on ALCN with an Overweight / High Risk and a 12M PT of EGP9.0/share (+41%).
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