JPM-MENA TELECOMS SECTOR-EXPANDING COVERAGE WITH 5 INITIATIONS-100224

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      【出版时间及名称】：JPM-MENA TELECOMS SECTOR-EXPANDING COVERAGE WITH 5 INITIATIONS-100224
      【作者】：jpmorgan
      【文件格式】：pdf
      【页数】：52
      【目录或简介】：
We expand our existing MENA telecoms coverage with four stock initiations:
Mobily, Wataniya Telecom (WT), Vodafone Qatar (VFQ) and Zain KSA. Among
these new names, Mobily is our top pick. We now cover a combined market
capitalisation of c.USD90bn and c.90% of the sub-sector’s 16% weight in the
Bloomberg GCC200 index.
We rate Mobily and WT Overweight with Dec-10 price targets of SR60 and
KD2.20, respectively. Both names offer an implied upside of c.30% from current
trading levels and join two other MENA telecom names, Qtel and STC, on our list
of preferred CEEMEA telecoms. We also add Mobily to our CEEMEA AFL as a
third telecom name along Qtel and MTN. We initiate with Neutral ratings on VFQ
(Mar-11 PT QR9.0) and Zain KSA (Dec-10 PT SR11) – offering an implied upside
of c.10-20% to current trading levels.
• Four strong reasons why we add to MENA telecom positions:
1) supportive valuation; 2) favourable industry characteristics and trends;
3) GCC markets have started to outperform emerging markets (~10%
ytd); and 4) backdrop for emerging equities remains positive.
• Top pick - Mobily: We believe Mobily is in a strong position to benefit
from the overall telecoms growth in Saudi Arabia – we forecast 10% EPS
CAGR09-12E. Based on our forecasts, Mobily generates healthy positive
free cash flows (e.g. 2010E OpFCF of ~SR2.6bn) and is well financed
with 2009 net-debt-to-EBITDA of 1.6x improving to 0.9x in 2010E.
• Mixed re-financing requirements: Based on our debt analysis, WT has
the most comfortable debt position followed by Mobily, while Zain KSA
is the most leveraged. Based on our calculations, Zain KSA along with
Mobily face some near term re-financing requirements.
• Sensitivity analysis: Forex only relevant for moderately exposed WT -
10% fluctuation in TND impacts revenue by 2.4% and EPS by 5.6%.
• Mobily joins CEEMEA AFL: We add Mobily to our CEEMEA AFL. We
derive our Dec-10 target prices for Mobily and Zain KSA, and our Mar-11
PT for VFQ from our single country DCF fair values and our Dec-10 PT
for WT from our DCF-based SOTP fair value. We apply a liquidity
discount of 15% to WT. We use relative valuation multiples and historical
trading ranges as reference points for a consistent valuation approach for
the sector. Key risks to our target prices include tougher-than-expected
competition and some re-financing risks.

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关键词：INITIATION Expanding coverage telecoms Telecom With telecoms coverage