Cairo - Mubasher: MubasherTrade Research has maintained their Buy/High Risk rating for the stock of MB for Engineering and Contracting, with a price target (PT) of EGP 1.82 per share, according to a recent report.
The report noted that MB's management showed impressive commitment to the restructuring plan announced pre-IPO, which entails expanding in the manufacturing business capitalizing on their long term experience in the distribution of electrical products.
“The backward integration triggered improved operating margins and higher ability to cater for local demand at all segments.
“With more expansions in the industrial segment through the launch of Beta Electric facility in the third quarter of 2017, we believe MB would post even wider margins and will be able to capture a bigger market share.
“We still await management guidance on the operations of the newly-launched facility and its impact on margins,” the research firm indicated.
“We note that the facility's production will replace imported products, which is already accounted for in our model,” it further added.
MB for Engineering and Contracting reported a year-on-year consolidated profit increase of 332.9% in the first quarter of 2017, as profits rose to EGP 3.85 million in Q1-17, compared to EGP 890,300 in Q1-16.
Sales rose 72.3% reaching EGP 31.6 million in Q1-17, compared to EGP 18.4 million in the same quarter in the year earlier.
