Ecobank Sonatel Equity Note

8/11/2019 Ecobank Sonatel Equity Note

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ONATEL:

Sonatel, tproposed 1the stock sMillion.

We believbourse; ouliquidity pr The stocksanticipateprincipallytrading fre

obank Researc

The first stock s

Sonatel, the la10-for-1 stock s31 October 2outstanding shFriday, 23 Novprice of XOF14,this is Sonatelswill receive ninThe BRVM CI,telecom stocks:36% of the indSonatels highmovement witbasis.

Sonatel share p

The stock splitinvestor base iscould yield wiunchanged aftesuggest that thOn this accoustocks fair valuthe participatioWe also expecthanks to a refrequency. Hocompetition wiremains high ivaluation modeIn 2011, Sonatmobile phoneoff the back oaverage of 15.result, marginsprudent costproduct innovaits markets. Wthese declininvaluations. Horemains higheoperating in Af

by the stock spl

Highlights

PLEASE SEE ANA

ommentary

dle Afri

the stock

e largest com0-for-1 stock split that will in

that the stocr back of theofile in the mar

free float willa strengthen

due to the narrquency.

| ecobankrese

plit since listing

gest companyplit proposed b12 the stock

ares to 100m.mber 2012 on

000. Although s first stock splite additional shwhich is mar

: Sonatel andx. Although th

price was c an average b

rice will be mor

is expected tolikely to widee swings bothr the split; howe stocks liquidit alone, we ae, although thisn level of the the stock spliuction of theever, with S

ll likely intensin Mali due tol shows that thls revenues wusiness and th a continued d% both in Sen

continue to banagement s

ion pipeline ine believe thatg micro-fundaever, despite

r than the avrica so the quan

it.

LYST(S) CERTIFIC

ca Brief

split to

any by markeplit. Shareholdecrease the com

k split will imenvelope calcuket could rise b

remain unchaning in Sonatowing of the bi

rch@ecobank.

g

by market capy managementsplit that wilrading of thethe BRVM stocktock splits are c since listing inares of commoet capitalizatinatel with So benchmark isrrying a heaeta Vs the mar

re affordable

improve the li, although an i

ways. The stoever, our backty profile in thssign an additi quantum leap

uninformed ret to improve Sid-ask spread

onatels markfy, especially ipolitical uncer equity risk prre partly hit b end of tax ex

owndraft in ARegal and Malie diluted andtrategies in aa bid to enhancequity markets

entals anddecreasing marage profitabiltum of this do

ATION(S) AND I

ing Not

nhance l

t cap on the Brs approved onpanys outstand

prove Sonatelslations suggest 15%.

ged after the sls upside s

id-ask spread a

om

on the BRVM e. Shareholdersl increase thesplit shares co exchange withommon for tele 1998 and each

stock for eachn-weighted, hatel accountin

not a price-weiy weight inket hovering at

uidity of Sonatincrease in tradcks free floatf the envelope market couldonal 5% prem

will likely be dail segment ofnatels upside

arising from hits increasingl Senegal and

ainty and asmium may rea a domestic primption in MaliPUs, which de

over the past 2Sonatel has hdition to ram

e competitive p will continueassign discoungins, Sonatelsity of telecomnside will likel

MPORTANT DISC

| Equit

iquidity

RVM executed31 October 20

ing shares to 1

liquidity on t that the stoc

plit; however,ing moment

rising from hig

xecuted thepproved oncompanys

menced ona post-split

com shares,shareholdershare held.

as just twog for nearlyhted index,

the market1.5 on YTD

el since theing volumeswill remaincalculationsise by 15%.ium on thependent onthe market.momentumher trading

maturing,country risk

result, ourh 9%.ce war in its. This comeslined by anyears. As ad to adopt

ping up itsositioning into pre-pricets in theirprofitabilitycompanies

y be capped

LOSURES ON THE

| BRV

In BillionRevenuesEBITDAEBITDA MEBITNet ResulNet Margi

CurrePerfoMarkMarkBeta52 W

its1200

heks

emer

Mark

SONA

Value tr

Sourc

LAST PAGE OF

Profitabi

10000

12000

14000

16000

18000

20000

01/12

0

2000

4000

6000

8000

10000

12000

| SONA

OF

argin

n

t share price (mance YTD (%)t cap (Bn XOF)t cap (Bn US$)s BRVM CIrange (XOF)

t statistics

EL: Price and

ded weekly o

: BRVM, company

HIS REPORT.

lity of SONAT

2009 01/12

TEL 28

2009562316

56%223185

33%

OF)

olume trade

n SONATEL (M

, Bloomberg, Ecob

L

2010 01/12

Volume

Sonatel BRVM

ovember 2

2010599324

54%228184

31%

14

1

10,500 - 14

illion XOF)

ank Research

/2011

Price

1

12

2011635334

53%235154

24%

,00016.7,400

2.31.8

,400

0

100000

200000

300000

400000

500000


2/3

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Figures in MilTotal RevenuOperating IncNet Income t

Cash and EquTotal CurrentTotal AssetsTotal CurrentTotal LiabilitiTotal Equity

Cash From OCash From InCash From Fi

Returns & MReturn on CoReturn on AsReturn on CaReturn on In

Operating MIncrementalPretax MargiNet IncomeNet Income t

-20

-15

-10

-5

0

5

10

15

20

Summary

Source: Bloomb

Growth of

Source: Com

dle Afri

llion XOFesomeo Common

ivalents Assets

Liabilitiess

erationsvestingancing

rgins (%)mmon Equitysetspitalested Capital

rginperating Mar

argino Common Merg, n/a not avail

ONATELs ac

any

ca Brief

gin

argin

2010/09

able

tivities (%)

ing Not

FY632313

2147

1 04384459

28-12-15

FY

011/10

| Equit

2011 F5 361 55 765 26 521 1

4 769 21 557 40 937 1 01 718 38 615 42 322 5

2 061 23 968 -14 984 -1

2011 F25,913,322,424,1

37,121,234,621,521,5

| BRV

2010 F9 002 58 044 29 631 1

6 264 17 733 34 224 87 444 22 810 31 414 5

4 580 38 702 -11 973 -1

2010 F31,216,827,528,6

38,111,436,826,626,6

| SONA

2009 F62 626 523 884 163 603 1

56 644 150 522 384 103 856 522 227 219 356 884 5

02 290 225 748 -106 387 -1

2009 F33,919,130,330,3

39,890,039,929,129,1

TEL 28

Y 200829 55294 10536 578

14 09930 97031 83996 28723 90607 933

11 62033 703 -42 303

Y 200830,217,328,729,0

36,7n/a

36,525,825,8

ovember 2

Y 200770 58903 80540 967

14 80764 11543 17516 03356 60686 569

8 26566 55651 416

Y 200734,120,233,735,0

43,325,541,930,030,0

2

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is document was prcument was gathercument provides thfiliates do not in any direct or remote lI SA is a credit institE OF THIS PUBLICATIception of this publi any member of Ecocordingly, EBI SA (A

is document is publien prepared withou investors individua

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e information contaiblished, in whole or

EBI SA Groupe Ecobis note has been prer any question, pleaul-Harry Aithnardoup Head, Researchs Collines de l'Arche,

057 Paris La DfensIS LOSURESesearch analyst certife research analyst(curately reflect theirsearch analyst in thi

mportant disclosuresThe analyst(s) respompany.

The company benefi

. EBI SA or the Group


EBI SA or the Group


I. The company is a c

II. EBI SA or the Grou


EBI SA or the Group


I. EBI SA and the issu

dle Afri

pared under the suped from reliable soue opinions, analyses

way endorse the fiss or damage arisin

ution authorized by tN FOR THE PURPOSEcation does not makbank Group is not amember of the Ecob

shed for informationt regard to the indivil circumstances, risk

and EBI SA have implreport. Further disclo available on reques

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nce of a security is nthe full amount invefect the value, priceeliable information

ined in this documen in part, for any purp

nk 2011. All Rightspared by Paul-Harryse contact:

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fications) primarily responsi personal views. Eac

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nsible for the prepar

icially owns more th

is a market maker i

beneficially owns 5

beneficially holds a s

has been lead mana

lient of EBI SA or the

p has lead managed

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ca Brief

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Dsearch Division of EBI(s) and the publishehe Research divisionnclusions in this doc or any part of the inle prudentiel.NT DECISION EXPOSEide you with the pr

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| Equit

ISCLAIMERI SA (a member of Ecrs of this documentonly and is providement. EBI SA, Ecob

formation contained

YOU TO SIGNIFICANTtections afforded tocument and will no any recipient for pr

cit, buy or sell any s return objectives oftments and shares r

vent any conflict of i potential conflicts

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all or any identifiedpart of their compe

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oup).

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ompany.

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12 months of any p

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| SONA

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st 12 months.

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during the next 3

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TEL 28

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Ecobank Sonatel Equity Note