Reuters Ticker: ALCN.CA
The company’s business model is very similar to that of the Suez Canal:
High initial fixed cost + very low operating cost + dollar-denominated revenues
The company has giant cranes, and all it does is move the container from land to ship for export, or from ship to land in case of import.
Here are the numbers:
- The stock is up 55% since the beginning of the year
- The company’s revenues are denominated in dollars, and costs are mostly in EGP
- No debts at all and no taxes because it is a free zone
- Annual cash distribution to shareholders
- Net profit margin in 2021/2022 = 71%, and I think there is no other company among the 218 listed companies that records this margin.
- The share price is EGP 13, which is close to the highest share price in 52 months
- Net profit per share in 2021/2022 = EGP 1.3
- So, the earnings multiple = about 10x, a moderate valuation
- Profits in the income statement are almost equal to the flows from operating activities because there are no paper revenues and expenses, but most of it is cash in/cash out.
- Finally, based on all of the above, it was not surprising that Emirati and Saudi funds acquired large stakes in the company in 2022.
Note: The post is not a recommendation to buy or sell
* This article was not written by Thndr and does not constitute investment advice. You should do your own research before making investment decisions.
