BRIEF ON LAST WEEK: The Nigerian Stock Exchange All Share Index (NSEASI) declined by 1.12% WoW to settle at 36,703.58 points. The equities market index pared on two (2) out of the five (5) trading days in the week to bring the YtD return of the index to 36.57% on the last trading day of the week. The total volume of traded stocks jumped by 102.65% WoW, while the total value of traded stocks surged by 101.52% WoW due to some bulk transactions (68.29mn and 1.58bn units of NB and SOVRENINS respectively were traded on separate days) on the floor of the Exchange in the week. We attribute the negative performance of the index in the prior week in part to the recent semi-annual review of the MSCI index in which four (4) Nigerian stocks (FBNH, PZ, FO and GUINNESS) were taking out of the MSCI Frontier Market Index with no subsequent additions, and they were added to the MSCI Frontier Market Small Cap Index with the exception of FO that was totally dropped off the index. Also, CADBURY, DIAMONDBNK, FCMB, GLAXOSMITH, SKYEBANK, and STERLNBNK were deleted from the MSCI Frontier Market Small Cap Index. The indices review will take effect from the end of Nov-17. WHAT TO EXPECT THIS WEEK: We anticipate a sustenance of cautious trade sentiments from investors in the week, however, noting the gradual re-entry of positive sentiments on the last two trading days in the previous week. Overall, we expect a fairly marginal positive week-on-week close of the Nigerian Stock Exchange All Share Index in the week. We still recommend that investors should focus their interest in stocks with a history of positive earnings growth and dividend payments with attractive yields. NISL TOP RECOMMENDATIONS: S/N COMPANY CURRENT PRICE (N) TARGET PRICE (N) UPSIDE (%) YtD GAIN/(LOSS) (%) RATING 1. ACCESS 9.70 11.96 23.25 65.25 BUY 2. DANGCEM 230.00 230.50 0.22 32.19 HOLD 3. DANGFLOUR 9.00 9.98 10.89 111.76 HOLD 4. FBNH 6.90 8.44 22.32 105.97 BUY 5. FIDELITYBK 1.60 2.04 27.19 90.48 BUY 6. GUARANTY 43.00 39.02 (9.26) 74.09 SELL 7. GUINNESS 100.25 114.56 14.27 20.71 HOLD 8. MOBIL 170.00 187.84 10.49 (39.07) HOLD 9. NB 138.80 171.24 23.37 (6.21) BUY 10. NESTLE 1,251.03 1,371.74 9.65 54.45 HOLD 11. PRESCO 66.00 69.90 5.90 64.59 HOLD 12. TRANSCORP 1.35 1.70 25.93 55.17 BUY 13. UCAP 3.21 3.40 5.92 17.58 HOLD 14. UNILEVER 37.50 45.70 21.85 7.14 BUY 15. ZENITHBANK 24.12 31.48 30.49 63.53 BUY NSEASI SUMMARY Most Recent Week Previous Week % Change NSEASI 36,703.58 37,120.28 (1.12) Market Cap ( bn) 12,774.18 12,847.22 (0.57) Market Cap ($ bn) 41.75 41.99 (0.57) Total Volume (mn) 2,675.40 1,320.19 102.65 Total Value ( bn) 27,777.89 13,784.10 101.52 Total Value ($ bn) 90.78 45.06 101.48 Page 1
NISL STOCK RECOMMENDATION ANALYSIS: ACCESS Price: 9.70 Target Price: ( 10.76 13.15) Rating: BUY P/B : 0.56 P/E : 3.75 Upside: 23.25% Div. Yield : 9.28% 1 Yr Range: 5.15 10.76 Our valuation of ACCESS BANK PLC (herein referred to as ACCESS or the Bank ) currently shows an upside of 23.25% to its fair value, hence we maintain a BUY recommendation on the stock. ACCESS declined by 2.12% WoW to settle the YtD return of the counter at 65.25%. For Q3 17, ACCESS posted a 33.00% growth in Gross Earnings from 274.47B to 365.06B and Profit After Tax grew by 4.28% from 54.08B to 56.40B. EPS also advanced by 4.79% YoY from 188kobo to 197kobo. The counter s Trailing 12M EPS holds at 259kobo. The bank s topline growth can be attributed to the 27.91% advancement in Non-Interest Income from 92.89B to 118.82B, as the Bank recorded a Net Foreign Exchange Income of 116.46B from a loss position of 53.69B in Q3 16, while Net Fees and Commission Income and Net Trading Income pared by 15.05% and 142.82% respectively to 38.43B and a loss of 41.22B. The Net Interest Income for the Bank advanced by 14.19% from 106.37B to 121.47B. According to ACCESS, it received all regulatory approvals for the divestment of the banks 17.65% equity shareholding in Stanbic IBTC Pension Managers Limited (SIML) to the company s majority shareholders (Stanbic IBTC Holdings Plc) on 10-Feb- 17. This was effected in the books of Stanbic IBTC Holdings Plc in FY 16. For FY 16, ACCESS posted a 13.02% growth in Gross Earnings from 337.40B to 381.32B and Profit After Tax grew by 8.46% from 65.87B to 71.44B. EPS waned by 5.66% YoY from 265kobo to 250kobo. The bank declared a total dividend of 65kobo/share for FY 16 (18.18% higher than FY 15 dividend of 55kobo/share). It also declared an interim dividend of 25kobo for FY 17. Ex-Div. Date: 07-Sep-17; Payment Date: 21-Sep-17. (Interim Dividend) AFRIPRUD Price: 3.79 Target Price: ( 3.24 3.96) Rating: SELL P/B : 1.41 P/E : 5.03 Downside: 5.01% Div. Yield : 7.92% 1 Yr Range: 2.26 3.82 Our valuation of AFRICA PRUDENTIAL REGISTRARS PLC (herein referred to as AFRIPRUD or the Company ) indicates that the stock currently trades at a downside of 5.01% to fair value, therefore we place a SELL recommendation on the stock. AFRIPRUD pared by 0.79% in the week to settle the YtD return of the stock at 24.26%. In Q3 17 AFRIPRUD s Revenue advanced by 48.59% YoY from 1.53B to 2.27B, while Profit After Tax also advanced by 59.10% YoY from 0.82B to 1.31B. EPS settled higher by 59.10% from 41kobo to 65kobo. Trailing 12M EPS for AFRIPRUD holds at 75kobo. AFRIPRUD s growth in gross revenue is attributed to the rise in income from Net Investment, which advanced by 78.61% from 0.90B to 1.61B. Fee Income also advanced by 5.36% from 0.63B to 0.66B in the period, while Other Income jumped by 67.25% from 0.021B to 0.035B. In FY 16 AFRIPRUD s Revenue fell by 4.96% YoY from 2.55B to 2.42B, while Profit After Tax also plunged by 29.61% YoY from 1.45B to 1.02B. EPS settled lower by 29.17% from 72kobo to 51kobo. The Company declared a total Dividend Per Share (DPS) of 30kobo for FY 16 representing a 50.00% decrease from last year s Dividend per share of 60 kobo. Ex-Div. Date: 06-Mar-17; Payment Date: 28-Mar-17. Page 2
DANGOTE CEMENT Price: 230.00 Target Price: ( 207.45 253.54) Rating: HOLD P/B : 4.54 P/E : 15.85 Upside: 0.22% Div. Yield : 3.70% 1 Yr Range: 149.26 245.00 Our valuation of DANGOTE CEMENT PLC (herein referred to as DANGCEM or the Company ) currently shows an upside potential of 0.22%, hence we maintain a HOLD recommendation on the stock. DANGCEM advanced by 0.43% in the week to settle its YtD return at 32.19%. In Q3 17, DANGCEM s Revenue grew by 36.53% from 442.09B to 603.58B, while Profit After Tax advanced by 44.65% from 133.52B to 193.14B. EPS also advanced by 38.99% from 813kobo to 1,130kobo. TTM EPS holds at 1,451 kobo. The Company s top-line was boosted by the high price of cement in the period relative to the corresponding period of 2016. Cost of Sales grew at a lower rate of 12.16% YoY to 259.85B from 231.68B, translating in a 63.36% rise in Gross Profit to 343.72B from 210.41B in Q3 16. DANGCEM s operating expense increased by 23.36% to 113.50B from 92.01B, while the company s operating profit advanced by 90.53% to 233.14B from 122.37B. Consequently, Profit Before Tax for DANGCEM appreciated by 48.06% YoY to 220.18B from 148.72B, while Profit After Tax climbed by 44.65% from 133.52B in Q3 16 to 193.14B. In Aug-17, Dangote Indiustries Limited sold 2.3% stake in DANGCEM to foreign investors in a deal valued at c. 86.1B. The transaction brings the free-float of the Company s shares to 10.4%, still below the 20% requirement of the NSE. DANGCEM s FY 16 Revenue grew by 25.09% from 491.73B to 615.10B, while Profit After Tax advanced marginally by 2.92% from 181.32B to 186.62B. EPS also advanced by 4.42% from 1086kobo to 1134kobo. The Company declared a Dividend Per Share (DPS) of 850kobo for FY 16; an increase of 6.25% when compared to the 800kobo DPS paid in FY 15. Ex-Div. Date: 15-May-17; Payment Date: 26-May-17. DANGFLOUR Price: 9.00 Target Price: ( 8.98 10.98) Rating: HOLD P/B : 1.27 P/E : 2.20 Upside: 10.89% Div. Yield : - 1 Yr Range: 3.51 9.50 Our valuation of DANGOTE FLOUR MILLS PLC (herein referred to as DANGFLOUR or the Company ) currently shows an upside potential of 10.89%, hence we maintain a HOLD recommendation on the stock. DANGFLOUR declined by 4.76% WoW to settle its YtD return at 111.76%. In Q3 17, DANGFLOUR recorded a Revenue growth of 101.17% from 49.85B to 100.28B, while Profit After Tax surged by 359.21% from 2.84B to 13.05B. EPS also advanced by 344.42% from 57kobo to 255kobo. TTM EPS holds at 410kobo. Revenue growth for the Company in the year remains buoyed by the improving economic dynamics in the nation, coupled with the sustained availability of FX to companies in the consumer goods space. The Company s Cost-to-Sales ratio in the period increased to 76.82% (vs 71.86% in Q3 16), while the Gross Profit increased by 65.70% to 23.25B. DANGFLOUR s Operating Expense increased by 94.74% YoY to 10.97B, while the OPEX Ratio declined to 10.94%, compared to 11.30% in Q3 16. Operating Profit in the period settled at 19.07B (304.90% YoY), while the Finance Cost increased to 2.56B from 2.30B in Q3 16. The company recorded a gain of 3.74B on the sale of an asset held for sale in the period. Consequently, PBT and PAT for DANGFLOUR settled at 18.01B (+581.26% YoY) and 13.05B (+359.21% YoY) respectively. DANGFLOUR s FY 16 Revenue grew by 120.22% YoY from 48.03B to 105.77B, while Profit After Tax settled at 10.57B from a Loss After Tax Position of 12.68B in FY 15. EPS also advanced by 184.46% to 212kobo. The Company did not declare any dividend for FY 16. Page 3
DANGOTE SUGAR Price: 14.33 Target Price: ( 13.57 16.59) Rating: BUY P/B : 2.16 P/E : 5.58 Upside: 15.70% Div. Yield : 3.49% 1 Yr Range: 5.71 15.40 Our valuation of DANGOTE SUGAR REFINERY PLC (herein referred to as DANGSUGAR or the Company ) indicates that the stock currently trades at an upside of 15.70% to fair value, therefore we maintain a BUY recommendation. DANGSUGAR waned by 6.03% in the week to settle the YtD return at 134.53%. In Q3 17, DANGSUGAR reported a 41.45% increase in Turnover from 115.25B to 163.03B while Profit After Tax rose by 162.13% from 10.12B to 26.52B. EPS was also higher by 163.10% from 84kobo to 221kobo. The counter s Trailing 12M EPS holds at 257kobo. The Company s Revenue growth was due to increase in all revenue generating sections of the company, as the effect of higher price and volume sales translated to the 41.45% increase in revenue. Gross Profit Margin (25.44% vs. 16.49% in Q3 16) was higher in the period, as the Company efficiently managed its Cost of Sales in the period in view (Cost-to- Sales moderated to 74.56% vs. 83.51% in Q3 16). The OPEX Ratio also eased to 3.25% as against 4.03% in Q3 16, while the Operating Profit subsequently settled at 36.36B (+146.99% YoY) from 14.72B in Q3 16. DANGSUGAR s impressive bottom line run was further buoyed by gains in the Fair Value Adjustments of the Company s biological assets plus investment income, which was 234.38% higher at 3.32B, compared to 0.99B in Q3 16. Consequently, DANGSUGAR s PBT settled at 39.25B (+156.23% YoY). DANGSUGAR reported a 67.95% increase in Turnover to 169.73B for FY 16 while Profit After Tax rose by 29.20% to 14.40B. EPS was higher by 29.03% from 93kobo to 120kobo. The Company declared a Dividend Per Share (DPS) of 60kobo for FY 16; an increase of 20.00% when compared to the 50kobo DPS paid in FY 15. The Company also declared an interim dividend of 50kobo/share in Q2 17. Ex-Div. Date: 11-Aug-17; Payment Date: 14-Aug-17 (Interim Dividend). ETI Price: 17.00 Target Price: ( 16.83 20.58) Rating: HOLD P/B : 0.50 P/E : - Upside: 10.03% Div. Yield : - 1 Yr Range: 7.10 18.00 Our valuation of ECOBANK TRANSNATIONAL INCORPORATED PLC (herein referred to as ETI or the Bank ) currently shows an upside potential of 10.09%, hence we maintain a HOLD recommendation on the stock. ETI traded flat in the week to hold its YtD return at 65.37%. Q3 17 saw ETI post a 23.61% growth in Gross Revenue from 456.66B to 564.46B, while PAT increased by 12.37% YoY to 57.95B. EPS was higher by 20.00% from 165kobo to 198kobo. The Trailing 12M EPS for the stock holds at -226kobo. Top-line earnings was boosted by growths across all revenue generating segments for the Bank, with Net Interest Income ( 216.31B vs 200.02B), Net Fees & Commission Income ( 89.62B vs 76.48B) and Net Trading Income ( 101.11B vs 62.50B) all advancing amongst other gains. Consequent on the topline gains, ETI recorded Operating Profit before Impairment to the tune of 158.64B (+33.66% YoY). Although, the Bank recorded Impairment Loss on Financial Assets worth 89.30B (+74.48%), ETI recorded Operating Profit After Impairment worth 69.34B (+2.72% YoY), while the Profit Before Tax came in at 69.41B (2.68% YoY) in the year. After accounting for Tax charges, ETI recorded Profits from Continuing Operations worth 57.76B (+10.96%) and Discontinued Operations 0.20B (+141.12%), to bring the Profit After Tax to 57.95B (+12.37% YoY). The Ecobank Group received shareholders approval at its 29 th yearly general meeting and extraordinary meeting to issue up to $400M convertible bonds, with 5-Years maturity and a coupon of 6.46% above 3-Month LIBOR. FY 16 saw ETI post a 22.53% growth in Gross Revenue from 542.71B to 665.00B, but recorded Loss After Tax of 52.60B from a PAT of 21.25B in FY 15. EPS was lower by 562.50% from 56kobo to -259kobo. The Bank did not declare any dividend for FY 16, compared to the 40kobo Dividend Per Share it declared for FY 15. Page 4
FBNH Price: 6.90 Target Price: ( 7.60 9.28) Rating: BUY P/B : 0.38 P/E : 15.68 Upside: 22.32% Div. Yield : 2.90% 1 Yr Range: 2.95 7.23 Our valuation of FBN HOLDINGS PLC (herein referred to as FBNH or the Bank ) shows a 22.32% upside potential, hence we place a BUY recommendation on the stock. FBNH declined by 4.56% in the week to settle the YtD return of the stock at 105.97%. Q3 17 saw FBNH report a 5.22% rise in Gross Earnings from 417.40B to 439.20B while Profit After Tax increased by 5.84% from 42.52B to 45.00B. EPS also increased by 4.27% from 117kobo to 122kobo. The Trailing 12M EPS for the counter holds at 44kobo. The Holdco s positive top-line earnings was supported by the 27.82% growth in Interest Income from 278.58B to 356.08B, while the Non-Interest Income pared by 43.50% YoY from 131.0B to 74.0B. Net gains on Foreign Exchange pared by 91.81% YoY from 68.40B to 5.60B. FBNH s Net Fees and Commission Income increased marginally by 0.53% YoY from 44.96B to 45.20B, whereas its Net Insurance Premium Revenue jumped by 17.58% YoY to 8.05B as against 6.85B in Q3 16. Loan impairment charges in the period under review declined by 14.93% YoY to 97.59B. FBNH s Operating Income settled at 328.10B (-1.74% YoY), while its Total Operating Expense increased by 8.34% to 175.30B. Consequent on the foregoing, the Holdco s Profit Before Tax declined by 3.52% to 55.43B, while its Profit After Tax from continuing operations increased by 7.81% to 45.84B. A 0.84B loss from discontinued operations translated to an overall Profit After Tax of 45.00B (+5.84% YoY). For FY 16 the Bank registered a 15.74% appreciation in Gross Earnings from 502.70B to 581.80B but overall Profit After Tax declined by 19.18% from 15.15B to 12.24B. EPS also fell by 9.30% to 39kobo (FY 15: 43kobo). The Bank declared a 20kobo Dividend per share (DPS) for FY 16; a 33.33% increase from the 15kobo DPS declared for FY 15. Ex-Div. Date: 08-May-17; Payment Date: 22-May-17. FIDELITYBK Price: 1.60 Target Price: ( 1.83 2.24) Rating: BUY P/B : 0.23 P/E : 2.62 Upside: 27.19% Div. Yield : 8.75% 1 Yr Range: 0.76 1.68 Our valuation of FIDELITY BANK PLC (herein referred to as FIDELITYBK or the Bank ) shows an upside potential of 27.19%, hence we maintain a BUY recommendation on the stock. FIDELITYBK waned by 4.76% WoW to settle the YtD return at 90.48%. For Q3 17 FIDELITY posted a 17.89% increase in Gross Earnings from 110.35B to 130.09B, while Profit After Tax increased by 65.09% from 8.75B to 14.45B. EPS also settled higher at 67kobo (Q3 16: 40kobo). The Trailing 12M EPS for the stock settled at 61kobo. The Bank s growth in gross earnings was on the back of a 20.72% increase in Interest Income from 91.43B to 110.37B. The bank s Net Interest Income After Impairment Charge increased by 9.22% from 42.56B to 46.48B, as Loan Impairment Charges declined by 8.00% YoY ( 7.32B vs. 7.96B in Q3 16). FIDELITYBK recorded Net Trading Profit of 186M compared to the Loss position of 771M in Q3 16, while Other Income jumped by 99.76% YoY to 5.94B vs. 2.98B in Q3 16. The Bank s Operating Expense declined by 2.57% YoY to 47.49B, while Operating Income settled at 63.72B vs. 58.58B in Q3 16. Consequently, Profit Before Tax and Profit After Tax for the Bank advanced by 65.08% and 65.09% YoY to 16.24B and 14.45B respectively. For FY 16 FIDELITY posted a 3.45% marginal increase in Revenue from 146.95B to 152.02B but Profit After Tax was lower by 29.99% from 13.90B to 9.73B. EPS also settled lower at 34kobo (FY 15: 48kobo). The Bank declared a 14kobo Dividend per share (DPS) for FY 16; a 12.50% decrease from the 16kobo DPS declared for FY 15. Ex-Div. Date: 18-Apr-17; Payment Date: 04-May-17. Page 5
FIDSON Price: 3.91 Target Price: ( 3.58 4.38) Rating: HOLD P/B : 0.81 P/E : 6.09 Upside: 1.79% Div. Yield : 1.28% 1Yr Range: 0.89 3.91 Our valuation of FIDSON HEALTHCARE PLC (herein referred to as FIDSON or the Company ) shows an upside potential of 1.79%, hence we place a HOLD recommendation on the stock. FIDSON advanced by 3.99% in the week to settle the YtD return of the stock at 205.47%. In Q3 17, FIDSON recorded a 127.58% surge in Revenue from 4.53B to 10.30B and Profit After Tax rose by 789.98% from 82.08M to 730.45M. EPS also increased by 789.98% YoY from 5kobo to 49kobo. The Trailing 12M EPS settled at 64kobo. The Company s topline earnings in the period was largely buoyed by increases in the Over-The-Counter drug sales ( 6.12B vs 2.79B in Q3 16) and Ethical goods sales ( 4.11B vs 1.66B in Q3 16). We attribute the topline performance to the improved FX liquidity in the economy (due to the Investors/Exporters FX window) amongst other instances. This we note has enhanced product supplies as against the situation that was obtainable in Q3 16. FIDSON s Gross Profit was recorded at 5.22B (+118.92% YoY), while the Operating Expense of the Company climbed by 97.90% YoY from 1.81B to 3.59B. Consequent on this, FIDSON s Operating Profit increased by 183.05% YoY from 0.58B to 1.65B, while the Profit Before Tax and Profit After Tax also surged by 764.56% and 789.98% to settle at 1.04B and 730.45M respectively. In FY 16 the Company recorded a 6.77% decrease in Revenue from 8.21B to 7.66B and Profit After Tax dropped by 57.45% from 744.38M to 316.76M. EPS also decreased by 58.00% YoY from 50kobo to 21kobo. The Company declared a 5kobo Dividend per share (DPS) for FY 16; same as the dividend value declared for FYE 15. Ex-Div. Date: 26-Jun-17; Payment Date: 21-Jul-17. FLOURMILL Price: 34.89 Target Price: ( 30.14 36.84) Rating: HOLD P/B : 0.85 P/E : 8.79 Upside: 7.45% Div. Yield : 2.87% 1 Yr Range: 16.20 35.47 Our valuation of FLOURMILLS OF NIGERIA PLC (herein referred to as FLOURMILL or the Company ) currently indicates an upside potential of 7.45% to fair value, therefore we place a HOLD recommendation on the stock. FLOURMILL gained 2.62% in the week to settle the YtD return of the counter at 88.70%. In Q2 18 (6M ended 30-Sep-17), FLOURMILL recorded a 16.90% rise in Revenue from 255.30B to 298.44B, while Profit After Tax increased by 44.64% YoY to 9.36B. EPS advanced by 42.15% from 223kobo in Q2 17 (6M ended 30- Sep-16) to 317kobo. The Trailing 12M EPS settled at 397kobo. The impressive topline performance by the company can be attributed to instances surrounding the overall economic recovery, reducing inflation and improving purchasing power of consumers in the domestic economy, as the Food revenue reporting segment advanced by 18.40% YoY to 233.15B (78% of total revenue) in the period. Also, the Company s Gross Profit Margin dipped to 11.90% from 14.27% due to the 20.12% YoY growth in Cost of Sales, while it recorded Net Operating Gains to the tune of 5.08B from a loss position of 8.08 in Q2 17 (6M ended 30-Sep-16). FLOURMILL s operating profit advanced by 53.51% in the period from 19.20B to 29.47B and the Company s Finance Cost increased by 48.89% YoY to 16.27B. PBT and PAT for the Company increased by 53.15% and 44.64% YoY to 13.48B and 9.36B respectively. In FY 17 (FY ended 30-Mar-17), FLOURMILL recorded a 53.09% YoY rise in Revenue to 524.46B, whilst PAT plunged by 38.72% YoY to 8.84B. EPS fell by 45.60% YoY to 303kobo. The poor bottom-line performance was due to the one-off effect of the gain on disposal of asset ( 23.73B) in the prior year. Discounting this gain, the company s PAT advanced by c.172% YoY. For FY 17 the Company paid a Dividend Per Share of 100kobo. (FY 16: 100kobo). Ex-div Date: 7-Aug-17. Payment Date: 12-Sep-17. Page 6
GUARANTY Price: 43.00 Target Price: ( 35.12 42.92) Rating: SELL P/B : 2.17 P/E : 8.65 Downside: 9.26% Div. Yield : 5.35% 1Yr Range: 20.65 43.00 Our valuation of GUARANTY TRUST BANK PLC (herein referred to as GUARANTY or the Bank ) currently indicates a downside potential of 9.26%, hence we place a SELL rating on the stock. GUARANTY traded flat in the week to hold its YtD return at 74.09%. GUARANTY reported a 4.58% increase in Gross Earnings in Q3 17 from 294.73B to 308.21B, while its Profit After Tax was higher at 125.58B (+7.26% YoY). EPS settled higher at 444kobo increasing by 7.25% from 414kobo in Q3 16. The Trailing 12M EPS settled at 497kobo. GUARANTY s topline performance was boosted by the 42.80% increase in Net Interest Income from 132.75B to 189.57B. Also, the Bank recorded minimal Loan Impairment charges ( 8.36B vs. 57.08B in Q3 16). Non-Interest Income plunged by 58.21% to 61.6B, as Other Income pared from 61.67B to 12.03B. Net Fee & Commission Income for the bank declined by 21.10% to 37.98B from 48.13B. GUARANTY s Net Trading Income surged by 229.78% from 3.01B to 9.94B. The bank s Operating Income advanced by 27.94% YoY to 241.15B from 188.48B, while the total Operating Expense increased by 10.09% to 91.12B from 82.77B. Consequently, Profit-Before-Tax for the bank rose by 8.73% to 150.03B from 137.99B, while Profit-After-Tax appreciated by 7.26% to 125.58B from 117.08B. GUARANTY reported a 37.36% increase in Gross Earnings in FY 16 from 301.85B to 414.62B and Profit After Tax was higher by 33.03% from 99.44B to 132.28B. EPS settled higher at 467kobo increasing by 33.05% from 351kobo in FY 15. The bank declared a total dividend of 200kobo/share for FY 16 (12.99% above FY 15 dividend of 177kobo/share). The bank declared an interim dividend of 30kobo/share. Ex-Div. Date: 24-Aug-17; Payment Date: 05-Sep-17. (Interim Dividend) GUINNESS Price: 100.25 Target Price: ( 103.10 126.01) Rating: HOLD P/B : 2.68 P/E : 36.06 Upside: 14.27% Div. Yield : 0.50% 1 Yr Range: 57.66 102.00 Our valuation of GUINNESS NIGERIA PLC (herein referred to as GUINNESS or the Company ) currently shows an upside potential of 14.27%, hence we maintain a HOLD recommendation on the stock. GUINNESS declined by 1.72% WoW to settle its YtD return at 20.71%. In Q1 18 (3M ended 30-Sep-17), Revenue growth for GUINNESS was 29.91% YoY from 23.02B to 29.90B, while Profit After Tax settled at 41.39M from a Loss After Tax position of 2.23B in Q1 17 (3M ended 30-Sep-16). EPS also advanced by 101.35% to 2kobo. Trailing 12M EPS holds at 278kobo. Like other consumer goods sector company in the period, revenue growth for GUINNESS was a function of the improved FX availability amongst other positive economic variables. The Company s Cost of Sales in the period increased by 33.03% YoY to 19.53B, translating to a 24.43% YoY growth in Gross Profit to 10.37B. Operating Expense for GUINNESS increased slightly by 1.84% YoY to 7.89B, while Finance Cost and Operating Profit increased to 3.84B (+14.00% YoY) and 2.65B (+286.80% YoY) respectively. Subsequently, PBT and PAT for GUINNESS settled at 49.31M apiece, from loss positions of 2.21B and 2.23B respectively. FY 16 Revenue for GUINNESS pared by 13.94% YoY from 118.50B to 101.97B, while the Company recorded Loss After Tax of 2.02B from a Profit After Tax Position of 7.79B in FY 15. EPS also plunged by 126% to -134kobo. The Company declared a dividend of 50kobo per share for FY 17 compared to 320kobo in FY 16. Ex-Div. Date: Not Available; Payment Date: Not Available. Page 7
INTBREW Price: 51.80 Target Price: ( 40.88 49.96) Rating: SELL P/B : 12.34 P/E : 60.03 Downside: 12.32% Div. Yield : - 1 Yr Range: 15.00 51.80 Our valuation of INTERNATIONAL BREWERIES PLC (herein referred to as INTBREW or the Company ) currently shows a downside potential of 12.32%, hence we maintain a SELL recommendation on the stock. INTBREW advanced by 3.60% in the week to settle its YtD return at 180.00%. INTBREW Q2 18 (6M ended 30-Sep-17) Revenue grew by 28.91% YoY to 17.40B, while it recorded a Loss After Tax of 52.19M from a loss position of 1.87B in Q2 17 (6M ended 30-Sep-16). EPS settled at a loss position of 2kobo from -57kobo in Q2 17 (6M ended 30-Sep-16), while the Trailing 12M EPS settled at 86kobo. The Company s impressive performance is a reflection of the improved FX availability in the economy stemming from increased FX earnings to the FGN and the implementation of the Investors/Exporters window. Finance Cost for INTBREW dropped by 47.58% YoY to 2.30B from 4.39B (largely due to FX loan revaluation). On 06-Jun-17, INTBREW notified the public of a proposed merger among the Company, Intafact Beverages Limited and Pabod Breweries Limited subject to requisite regulatory and shareholders approval. The proposed merger was considered and approved at INTBREW s board meeting on 02-Jun-17, and it s expected to generate both revenue and cost synergies, enhanced operational efficiencies, better resource management and more streamlined operations. All three companies, which are indirect subsidiaries of Anheuser-Busch InBev SA/NV, will continue to operate as usual until the receipt of required approvals. We note that upon conclusion of the acquisition process, production capacity of INTBREW is expected to increase significantly, while also having access to the Eastern Nigeria market. This we note amongst other factors make the stock a suitable BUY for long term portfolio positions. In FY 17 (FY ended 31-Mar-17), INTBREW s Revenue grew by 40.58% YoY to 32.71B, while PAT declined by 61.01% to 1.03B due to the 203.95% spike in Finance Cost (FX related issues). EPS was also down at 31kobo from 81kobo (FY 16). The Company did not declare a dividend for FY 17 (Dividend Per Share of 35kobo was declared for FY 16). JBERGER Price: 29.33 Target Price: ( 29.96 36.62) Rating: HOLD P/B : 1.53 P/E : 6.06 Upside: 13.50% Div. Yield : - 1Yr Range: 30.87 48.39 Our valuation of JULIUS BERGER NIGERIA PLC (herein referred to as JULIUS BERGER or the Company ) currently indicates a 13.50% upside potential, hence we place a HOLD rating on the stock. JBERGER traded flat in the week to hold the YtD return of the counter at -23.98%. In Q3 17, JBERGER s Revenue advanced by 11.84% YoY to 105.49B, while it recorded Loss After Tax of 349.68M compared to a loss position of 3.32B in Q3 17. EPS was 101.59% up at 4kobo. The Trailing 12M EPS of the stock holds at 484kobo. The Company s Gross Profit settled at 26.74B (+9.04%) from 24.52B due to the slightly higher increase in Cost-of- Sales (+12.82% YoY) to 78.74B. Operating Expense advanced by 58.66% to 22.73B, translating to a decline in Operating Profit (-39.81%) to 6.59B, while it recorded Other Gains of 2.58B (+242.47% YoY). Foreign Exchange Acquisition Loss in the period dropped to 3.07B in the period from 10.16B in Q3 16, while PBT advanced by 104.97% to 81.56M. Consequently, JBERGER recorded a Loss After Tax of 349.68M compared to a Loss After Tax of 3.32B in Q3 16. In Jun-17, JBERGER announced that it has entered into a strategic partnership and joint investment agreement with Petrolan Energy Limited. In a notification to the NSE, JBERGER said the partnership is for the acquisition and development of oil fields in Nigeria. According to the Company, the alliance is in line with its strategic goal to diversify into the oil and gas sector. In FY 16 JULIUS BERGER (JBERGER) reported a 3.88% increase in Revenue from 133.81B to 138.99B and Loss After Tax of 3.82B compared to a Profit After Tax of 2.44B in FY 15. EPS was 71.43% up at 228kobo from 133kobo in FY 15. Page 8
MOBIL Price: 170.00 Target Price: ( 169.05 206.62) Rating: HOLD P/B : 2. 51 P/E : 8.75 Upside: 10.49% Div. Yield : 4.71% 1Yr Range: 155.60 360.00 Our valuation of MOBIL NIGERIA PLC (DOUBLE ONE PLC: 11 Plc) (herein referred to as MOBIL or the Company ) currently indicates a 10.49% upside potential, hence we place a HOLD rating on the stock. MOBIL advanced by 3.03% in the week to settle the YtD return of the stock at -39.07%. MOBIL s Revenue in Q3 17 increased by 22.79% YoY to 88.25B, while PAT declined by 20.03% to settle at 4.59B (Q3 16: 5.74B). EPS was also lower by 20.03% from 1,593kobo to 1,274kobo. The Trailing 12M EPS settled at 1,942kobo. The rise in Revenue is attributed to the Company s ability to push relatively higher sales volume of petroleum products in the period, noting that the Company did not engage in any export sale in the period. The Company s Gross Profit Margin was lower (12.14% vs. 16.59% in Q3 16) in the period due to the 29.35% increase in Cost of Sales to 77.54B. Gross profit for MOBIL settled at 10.71B (-10.19% YoY), while the Company recorded a 34.79% growth in Other Income to 5.31B largely due to the 4.99B increase in rental income from its Real Estate business. Consequently, MOBIL s Operating Profit was 6.28% up to 8.89B. MOBIL recorded a 2.23B loss on Exceptional Items in the period due to the migration of a significant portion of its Defined Benefit Pension Scheme to a Defined Contributory Pension Scheme. Based on this, PBT and PAT settled at 6.83B (-19.46% YoY) and 4.59B (-20.03% YoY) respectively. Discounting the exceptional item, MOBIL s PBT advanced by 6.84% YoY. Further to the 60% equity stake acquisition by NIPCO Investment Limited (NIL) in MOBIL (in addition to NIPCO Plc prior 6.77% stake), NIL filed a Takeover Bid to acquire up to 11.64mn ordinary shares in MON (representing up to 3.23% of the issued and paid up capital of MON) not currently held by NIL and NIPCO PLC. The cash consideration was 417.12/share tendered by investors whose names appear in MON s register of shareholders on 10-Apr-17. The Acceptance Period closed on 27-Jul-17. MOBIL s Revenue in FY 16 increased by 46.54% from 64.22B to 94.11B and Profit After Tax rose by 67.34% settling at 8.15B (FY 15: 4.87B). EPS was higher by 67.34% from 1,351kobo to 2,261kobo. For FY 16 the Company declared a dividend of 800kobo/share (11.11% higher than 720kobo paid in FY 15). NB Price: 138.80 Target Price: ( 154.11 188.36) Rating: BUY P/B : 6.17 P/E : 34.36 Upside: 23.37% Div. Yield : 3.30% 1Yr Range: 112.82 193.00 Our valuation of NIGERIAN BREWERIES PLC (herein referred to as NB or the Company ) currently indicates an upside potential of 23.37%, hence we place a BUY rating on the stock. NB declined by 3.54% in the week to settle its YtD return at -6.21%. In Q3 17 NB s Revenue increased by 14.36% YoY to 254.69B while PAT advanced by 19.39% from 20.11B to 24.01B. EPS was also higher by 18.11% from 254kobo to 300kobo. The Trailing 12M EPS for NB currently holds at 404kobo. The Revenue growth was partly pressured by the Company s 18.10% YoY increase in Cost of Sales to 148.00B. OPEX for NB in the period increased by 10.99% YoY to 66.42B, while Operating Profit settled at 42.30B. NB s Finance Cost pared by 23.78% to 7.99B, while PBT advanced from 27.80B to 34.43B. We are optimistic of a sound FY 17 earnings performance for NB, provided the current liquidity in the FX market is sustained, affording the Company the opportunity of meeting its foreign denominated obligations through the period. In FY 16 NB s Revenue increased by 6.75% from 293.91B to 313.74B while Profit After Tax declined by 25.33% from 38.06B to 28.42B. EPS was also lower by 25.73% from 482kobo to 358kobo. The Company declared an interim dividend of 100kobo/share in Q3 17 (Total dividend of 358kobo/share FY 16, compared to the total dividend of 480kobo in FY 15) Ex-Div. Date: 16-Nov-17; Payment Date: 23-Nov-17. (Interim Dividend) Page 9
NESTLE Price: 1,251.03 Target Price: ( 1,234.56 1,508.91) Rating: HOLD P/B : 21.56 P/E : 32.60 Upside: 9.65% Div. Yield : 2.00% 1Yr Range: 570.00 1,290.00 Our valuation of NESTLE NIGERIA PLC (herein referred to as NESTLE or the Company ) currently indicates an upside potential of 9.65%, hence we place a HOLD rating on the stock. NESTLE declined by 3.02% WoW to settle its YtD return at 54.45%. In Q3 17 NESTLE s Revenue increased by 43.06% YoY to 185.24B while PAT surged by 4,641.13% to 22.98B. EPS was also higher by 4,641.13% from 61kobo to 2,899kobo. The Trailing 12M EPS for NESTLE currently holds at 3,838kobo. NESTLE s Cost of Sales advanced at a slower pace (+41.02%) to the Revenue, to settle at 109.36B, while Gross Profit increased by 46.11% to 75.88B. OPEX in the period increased by 23.46% YoY to 32.80B, whereas Operating Profit increased by 69.83% YOY to 43.09B. Also, NESTLE recorded a 526.38% YoY surge in PBT from 5.50B to 34.48B due to the 56.68% drop in Net Finance Cost from 19.87B to 8.61B in the period (exacerbated by improved FX sourcing modalities). In FY 16 NESTLE s Revenue increased by 20.25% from 151.27B to 181.91B while Profit After Tax declined by 66.61% from 23.74B to 7.93B. EPS was also lower by 66.61% from 2,995kobo to 1,000kobo. The Company declared an interim dividend of 1,500kobo/share in Q3 17 (Total dividend of 1,000kobo/share FY 16, compared to the total dividend of 1,900kobo in FY 15). Ex-Div. Date: 27-Nov-17; Payment Date: 11-Dec-17. (Interim Dividend) PRESCO Price: 66.00 Target Price: ( 62.91 76.88) Rating: HOLD P/B : 1.15 P/E : 3.25 Upside: 5.90% Div. Yield : 2.27% 1Yr Range: 36.96 76.95 Our valuation of PRESCO PLC (herein referred to as PRESCO or the Company ) currently indicates an upside potential of 5.90%, hence we maintain a HOLD rating on the stock. PRESCO traded flat in the week to hold the YtD return of the counter at 64.59%. PRESCO posted a 41.94% increase in Q3 17 Revenue from 11.94B to 16.94B and Profit After Tax pared by 21.91% from 6.80B to 5.36B. EPS also settled lower at 536kobo (Q3 16: 680kobo). The Trailing 12M EPS settled at 2,029kobo. PRESCO continues to boost its topline earnings through increase in volume sales in the year, relative to the prior year, as constraints on local importers to access FX for palm oil imports at the official FX rate continues to boost the demand from local producers like PRESCO. The Company s Cost-to-Sales ratio increased to 29.21% from 24.68% in Q3 16, translating to PRESCO s Gross Profit Margin decline to 70.79% from 75.32% in Q3 16. The Company s bottom-line performance was further dragged by the 106.25% plunge in Gains on Biological Asset Revaluation to a loss position of 275.47M. Consequently, PRESCO s Operating Profit declined by 17.97% YoY to 9.08B, while Profit Before Tax and Profit After Tax for PRESCO declined by 18.18% and 21.19% to 7.95B and 5.36B respectively. PRESCO posted a 50.42% increase in FY 16 Revenue from 10.45B to 15.72B and Profit After Tax grew by 771.65% from 2.49B to 21.74B. EPS also settled higher at 2174kobo (FY 15: 249kobo). For FY 16 the Company proposed a Dividend Per Share (DPS) of 150kobo (FY 15:100kobo). Ex-Div. Date: 3-Jul-17; Payment Date: 20-Jul-17. Page 10
TOTAL Price: 230.00 Target Price: ( 225.41 275.50) Rating: HOLD P/B : 2.99 P/E : 8.56 Upside: 8.89% Div. Yield : 8.70% 1Yr Range: 216.80 345.00 Our valuation of TOTAL NIGERIA PLC (herein referred to as TOTAL or the Company ) currently indicates an upside potential of 8.89%, hence we maintain a HOLD rating on the stock. TOTAL traded flat in the week to hold its YtD return at -23.08%. In Q3 17, TOTAL reported a marginal 0.45% rise in Turnover from 220.22B to 221.20B, while the PAT declined by 48.79% from 11.63B to 5.96B. EPS also settled at 1,754kobo representing a 48.79% drop from the 3,426kobo recorded in Q3 16. The Trailing 12M EPS of the stock holds at 2,686kobo. TOTAL s drop in Aviation Fuel Sales in the period (exacerbated by distorted loading from tank depots) continued to drag its topline performance, as Revenue from the segment pared by 44.66% YoY to settle at 12.15B in the period. The 0.45% rise in Q3 17 Revenue is attributable to the 0.54% and 29.07% YoY increases in Network and General Trade segments of the company to 163.45B and 45.25B, each contributing 73.89% and 20.46% of total Revenue. The unimpressive revenue growth was further hampered by high cost of revenue generation (changes in inventory of lubes, greases and refined products) in its General Trade (trade to companies) and Network Trade (trade at the fuel stations) arms, as the Cost-to-Sale ratio of the company jumped from 85.46% in Q3 16 to 89.78% in Q3 17. Consequently, TOTAL s Gross Profit plunged by 29.39% to 22.60B. PBT for TOTAL declined by 43.08% from 17.00B to 9.68B, while Profit After Tax pared by 48.79% from 11.63B to 5.96B. In FY 16, TOTAL reported a 39.86% rise in Turnover from 208.03B to 290.95B and a 265.63% surge in Profit After Tax from 4.05B to 14.80B. EPS also settled at 4,358kobo representing a 265.63% surge from the 1,192kobo in FY 15. The Company declared an interim dividend of 300kobo/share in Q3 17. (Total dividend of 1,700kobo/share for FY 16 compared to FY 15 dividend of 1,400kobo/share). Ex-Div. Date: 4-Dec-17; Payment Date: 18-Dec-17. (Interim Dividend) TRANSCORP Price: 1.35 Target Price: ( 1.53 1.87) Rating: BUY P/B : 0.57 P/E : - Upside: 25.93% Div. Yield : - 1Yr Range: 0.67 1.86 Our valuation of TRANSNATIONAL CORPORATION PLC (herein referred to as TRANSCORP or the Company ) currently reveals an upside potential of 25.93% to fair value, hence we place a BUY recommendation on the stock. TRANSCORP declined by 4.26% in the week to settle its YtD return at 55.17%. TRANSCORP recorded a 35.39% YoY increase in Revenue from 41.92B to 56.76B in Q3 17, while Profit After Tax settled at 8.19B (+157.61%) compared to Loss After Tax position of 14.21B in Q3 16. EPS was 8kobo (Q3 16: loss of 20kobo). The Trailing 12M EPS for the stock currently holds at a loss of 201kobo. The Company s top-line positive performance was on the back of a 54.33% surge in income from its Power business to 46.97B, as the effect of the Abuja airport closure (for rehabilitation works) in Q1 17 was noted on its hotel business and resulting in an 14.67% drop in income from its Hospitality business to 9.79B. Cost-to-Sales for TRANSCORP came in slightly higher at 54.86% (52.67% in Q3 16) due to the 41.00% YoY rise in Cost of Sales to 31.13B. Consequently, the Company recorded 25.62B (+29.15% YoY) in Gross Profit and 16.81B (+45.12%) in Operating Profit, as the Operating Expense in the period increased by 4.78% YoY from 8.97B to 9.40B. TRANSCORP s bottom-line performance was further boosted by the 93.77% drop in FX loss on borrowings from 18.45B in Q3 16 to 1.15B in Q3 17 as its Finance Cost increased by 7.37% YoY to 7.20B. Subsequently, PBT for TRANSCORP in Q3 17 settled at 9.04B (+170.74% YoY). TRANSCORP recorded a 45.81% increase in Gross Revenue from 40.75B to 59.42B in FY 16, but registered a Loss After Tax of 1.13B compared to a PAT of 2.03B in FY 15. EPS was -229kobo (FY 15: 96kobo). Page 11
UACN Price: 17.20 Target Price: ( 16.12 19.71) Rating: : HOLD P/B : 0.44 P/E : 12.20 Upside: 4.16% Div. Yield : 5.81% 1Yr Range: 12.02 21.78 Our valuation of UAC OF NIGERIA PLC (herein referred to as UACN or the Company ) currently shows an upside potential of 4.16%, hence we maintain a HOLD recommendation on the stock. UACN declined by 9.95% in the week to settle its YtD return at 2.32%. UACN reported a 21.10% growth in Revenue in Q3 17 from 56.79B to 68.77B, while PAT pared by 54.50% from 4.34B to 1.98B. EPS settled lower at 79kobo (-40.60% YoY). The Trailing 12M EPS for the stock holds at 141kobo. The Company s earnings was enhanced majorly by the 24.18% increase in revenue from its Food & Beverages business from 44.87B to 55.72B, giving the price increase/re-packaging of its flagship product Gala in the period in view. The Paints and Real Estate revenue generating segments also increased by 8.15% and 37.93% to 6.55B and 3.02B respectively, while its Logistics arm pared by 5.44% YoY to 3.23B. The growth in Revenue was largely pressured by the 30.48% increase in Cost of Sales to 57.84B to settle the Gross Profit at 10.93B from 12.46B. Operating Profit for the Company was 13.75% lower at 5.57B, as Operating Expense increased by 5.15% to 8.13B. UACN s bottom line performance was further worsened by the 271.87% surge in Net Finance Cost from 840.30M to 3.12B due to higher interest rates in the period, translating to a drop in Profit Before Tax to 3.05B from 6.71B in Q3 16. UACN s Profit After Tax plunged by 54.50% YoY from 4.34B to 1.98B. UACN reported a 14.69% growth in Revenue in FY 16 from 73.77B to 84.61B, while Profit After Tax rose by 9.76% from 5.16B to 5.67B. EPS also settled higher by 25.81% from 155kobo to 195kobo. For FY 16 UACN paid a Dividend Per Share (DPS) of 100kobo, same as it paid for FY 15. Ex-Div. Date: 16-May-17; Payment Date: 15-Jun-17. UBA Price: 9.60 Target Price: ( 10.45 12.77) Rating: BUY P/B : 0.65 P/E : 4.07 Upside: 20.94% Div. Yield : 7.81% 1Yr Range: 4.01 10.41 Our valuation of UNITED BANK FOR AFRICA PLC (herein referred to as UBA or the Bank ) currently shows an upside potential of 20.94%, hence we maintain a BUY recommendation on the stock. UBA declined by 1.03% in the week to settle its YtD return at 113.33%. In Q3 17 UBA reported a 25.75% YoY boost in Gross Earnings from 265.53B to 333.91B, while PAT increased by 23.04% YoY from 49.51B to 60.92B. The Bank s EPS rose 22.54% YoY from 142kobo to 174kobo for the period. The Trailing 12M EPS for the stock holds at 236kobo. The Bank s topline performance was on the back of impressive growths across all revenue generating segments. Net Trading and FX Income for the Bank rose by 41.30% YoY from 24.40B to 34.48B, while Other Income surged by 79.38% to 3.45B. Fees and Commission Income in the period grew by 2.97% YoY to 57.89B from 56.22B in Q3 16. Furthermore, in spite of the 41.89% surge in Impairment Loss on Loans to 12.91B, the Bank recorded a 28.61% rise in Net Operating Income after impairment on Loans and Receivables during the period to 223.99B from 174.17B. UBA s PBT climbed by 33.21% YoY to 78.33B, while the PAT also advanced by 23.04% YoY to 60.92B in Q3 17. In Jul-17, the Bank announced the cancellation of the UBA Staff Share Investment Trust Scheme and the crossing of 2.08bn units of its ordinary shares from the trust scheme to the bank. Upon final cancellation, the outstanding shares of UBA will be reduced by the same amount of shares accordingly. The cross was done at a price of 9.47/share on the floor of the NSE. The Bank declared a total dividend per share of 75kobo/share for FY 16 (25.00% increase on the 60kobo dividend per share it paid in FY 15). It also declared an interim dividend of 20kobo per share for FY 17. Ex-Div. Date: 31-Aug-17; Payment Date: 11-Sep-17. (Interim Dividend) Page 12
UCAP Price: 3.21 Target Price: ( 3.06 3.74) Rating: HOLD P/B : 1.26 P/E : 3.52 Upside: 5.92% Div. Yield : 15.58% 1Yr Range: 2.18 3.82 Our valuation of UNITED CAPITAL PLC (herein referred to as UCAP or the Company ) currently reveals an upside potential of 5.92%, hence we maintain a HOLD rating on the stock. UCAP declined by 2.73% in the week to settle its YtD return at 17.58%. UCAP grew its revenue by 9.65% YoY from 5.69B to 6.24B in Q3 17, while profit for the year declined by 30.30% YoY from 4.70B to 3.27B. EPS also decreased by 30.30% YoY from 78kobo to 55kobo. The Trailing 12M EPS for the stock holds at 91kobo. UCAP s topline growth was buoyed mainly by the surge in its Investment Income (+59.71% YoY from 0.69B to 1.10B). UCAP s Other Income advanced by +36.35% YoY from 559.09M to 762.32M, while Fees & Commission Income for the Company advanced by 0.66% YoY from 1.43B to 1.44B. Also, the company recorded a decline in PBT (-1.66% YoY from 3.96B to 3.90B) due to the 35.61% YoY increase in Total Expense in the period to 2.34B. UCAP s profit from continuing operations advanced by 3.26% YoY to 3.27B from 3.17B, while the Profit After Tax pared by 30.30% YoY, due to the effect of an extra-ordinary item ( 1.53B) recorded in the prior year. The Company declared a total Dividend Per Share (DPS) of 50kobo for FY 16 representing a 43% increase from last year s Dividend per share of 35kobo. Ex-Div. Date: 03-Mar-17; Payment Date: 22-Mar-17. UNILEVER Price: 37.50 Target Price: ( 41.13 50.26) Rating: BUY P/B : 13.35 P/E : 22.43 Upside: 21.85% Div. Yield : 0.27% 1Yr Range: 25.29 46.00 Our valuation of UNILEVER NIGERIA PLC (herein referred to as UNILEVER or the Company ) currently shows an upside potential of 21.85%, hence we maintain a BUY recommendation on the stock. UNILEVER declined by 6.25% WoW to settle its YtD return at 7.14%. In Q3 17 UNILEVER reported a 38.61% YoY boost in Revenue from 49.87B to 69.13B, while PAT surged by 207.98% YoY from 1.57B to 4.83B. The Company s EPS rose 207.98% YoY from 41kobo to 128kobo for the period. The Trailing 12M EPS for the stock holds at 167kobo. UNILEVER s topline performance was on the back of impressive growths across all of its revenue generating segments, as sales volume increased in line with improving consumer disposable income. The Food Products segment advanced by 23.39% to 32.64B, while the Home and Personal Care segment jumped by 55.40% YoY to 36.86B. Cost of Sales in the period increased by 35.61% YoY to 47.70B, while the OPEX grew by 5.71% to 12.26B. UNILEVER s Operating Profit surged to 9.18B (194.84%), while the Finance Cost rose by 70.75% YoY to 2.98B. Overall, PBT for UNILEVER in the period advanced by 351.57% YoY to 6.82B, while the PAT grew to 4.83B (+207.98%). In FY 16, the Company recorded Revenue growth of 17.82% YoY to 69.78B, while PAT surged by 157.63% YoY to 3.07B. Earnings Per Share in the period settled at 81kobo (+1153.13%). Dividend declared in FY 16 was 10kobo/share, same as what was declared in FY 15. Ex-Div. Date: 18-Apr-17; Payment Date: 12-May-17. Page 13
WAPCO Price: 50.00 Target Price: ( 49.77 60.84) Rating: HOLD P/B : 1.55 P/E : 4.34 Upside: 10.61% Div. Yield : 2.10% 1Yr Range: 34.50 63.00 Our valuation of LAFARGE AFRICA PLC (herein referred to as WAPCO or the the Company ) currently shows an upside potential of 10.61%, hence we maintain a HOLD recommendation on the stock. WAPCO pared by 2.82% to settle its YtD return at 22.10%. For Q3 17 WAPCO s Revenue advanced by 38.89% from 161.04B to 223.67B while the Profit After Tax of the company settled at 937.91M (+102.51% YoY) from a Loss After Tax position of 37.40B in Q3 16. EPS also advanced by 101.21% to 10kobo compared to a loss per share of 827kobo in Q3 16. The Trailing 12M EPS for the stock holds at 1,152kobo. The 38.89% rise in Revenue was largely due to the huge jump in cement sales (+41.47% YoY to 177.07B) in the period, as the company just like every other cement manufacturer continue to enjoy increasing consumption in the face of the gradual economic recovery in the nation. The topline growth was further supported by the reduced effect of production cost (improving efficiency in fuel/power), as the Company s Cost-to-Sales ratio dropped to 74.11% (vs. 88.75% in Q3 16). Consequent on this, WAPCO s Gross Profit surged by 219.77% YoY from 18.11B in Q3 16 to 57.91B. WAPCO s Operating Expense grew by 60.36% YoY from 20.20B to 32.40B, while it recorded an Operating Profit position of 18.42B compared to an Operating Loss of 32.97B in Q3 16. Although the company recorded a 134.05% YoY rise in Net Finance Cost to 17.31B in the period, the Profit Before Tax settled at 1.08B (vs. Loss Before Tax of 40.37B in Q3 16), while the Profit After Tax held at 937.91M, 102.51% higher than its 37.40B Loss After Tax in Q3 16. In FY 16, WAPCO s Revenue declined by 17.78% to 29.71B, while the PAT declined by 37.79% to 16.90B. EPS was 315kobo. The company declared a dividend of 105kobo per share in FY 16, compared to a bonus of 1 for 10 in FY 15. Ex-Div. Date: 23-May-17; Payment Date: 07-Jun-17. ZENITHBANK Price: 24.12 Target Price: ( 28.33 34.62) Rating: BUY P/B : 0.99 P/E : 4.64 Upside: 30.49% Div. Yield : 9.41% 1Yr Range: 13.30 25.99 Our valuation of ZENITH BANK PLC (herein referred to as ZENITHBANK or the Bank ) currently shows an upside potential of 30.49%, hence we maintain a BUY recommendation on the stock. ZENITHBANK pared by 3.52% in the week to settle its YtD return at 63.53%. ZENITHBANK reported a 39.68% YoY growth in Gross Revenue in Q3 17 from 380.35B to 531.27B while PAT advanced by 35.49% from 95.39B to 129.24B. EPS also increased by 35.49% from 304kobo to 412kobo. The counter s Trailing 12M EPS holds at 520kobo. The Bank s performance in topline was on the back of the surge in Trading Income to 81.81B (vs. 16.41B in Q3 16) and Fees & Commission Income to 71.02B (vs. 46.28B in Q3 16). The Bank recorded a 6.15% YoY increase in Net Interest Income from 189.82B to 201.49B, while its Impairment Loss on Financial Assets rose to 47.05B from 21.86B in Q3 16. The Bank reported a 17.45% YoY growth in Gross Revenue in FY 16 from 432.54B to 508.00B while PAT grew by 22.70% from 105.66B to 129.65B. EPS also increased by 22.62% from 336kobo to 412kobo. The Bank declared a final dividend per share of 177kobo for FY 16, to bring the total dividend per share in the period to 202kobo compared to the total dividend of 180kobo per share paid in FY 15. It also declared an interim dividend of 25kobo for H1 17. Ex-Div. Date: 21-Aug-17; Payment Date: 25-Aug-17. (Interim Dividend) Page 14