FAB «Al Awal» Daily Cumulative Return Fund for Liquidity is re-opened now for subscription till the allowed limit is reached. To invest in the fund, please visit the nearest branch, hotline: 19977

Securities & Investment

Month: July 2026

HC: Juhayna Food Industries, Gradual normalization

Posted on by Marwa Nakhla

  • We forecast JUFO to deliver a c18% revenue and c26% EBITDA 2026–30e CAGR, supported by higher prices and volumes

  • A gradual margin normalization will pave the way for higher dividend distribution, despite planned expansions, in our view

In a recent report, HC Brokerage shed light on the consumer sector through an evaluation of Juhayna Food Industries’ performance. They forecast revenue growth supported by both price and volume increases.

Pakinam El-Etriby, Consumers Analyst at HC commented that: “JUFO’s operations normalized in 2025, after a strong 2024 led by concentrates, with this trend expected to continue in 2026: In 2024, JUFO delivered a strong y-o-y improvement in operational performance, with gross profit margin (GPM) expanding to c30% from c23% in 2023 as concentrate revenues grew by around threefold y-o-y to EGP3.15bn, contributing c13% of total revenues, up from c7% in 2023 and c2% in 2022. The surge was supported by JUFO capitalizing on the 2024 orange tree crisis, along with favorable factors, including the Ras El Hekma investment deal and macro reforms, that improved USD availability at the official rate. In 2025, however, GPM started normalizing to c25%, driven by the resolution of the Brazil supply disruption, which weighed on concentrate revenues, declining by c56% y-o-y to EGP1.40bn and contributing only c5% of total revenues. We forecast concentrate revenues to decline by a further c27% to EGP1.03bn in 2026, representing c3% of total revenues, broadly in line with pre-2023 levels, and forecast concentrates to average c3% of revenue over our 2026–30e forecast horizon. We see that concentrates have already normalized, accounting for  c40–45% of total exports as of 1Q26, down from c85% of exports in 2024, and representing c2% of total revenues, in line with 2021–2022 levels.”

“We forecast JUFO’s revenues to grow at a 2026–30e CAGR of c18%, driven by higher average selling prices and volume growth: For 2026e, we expect revenues to increase by c21% y-o-y to EGP36.2bn (c1% above our prior estimate), supported by price and volume growth. We also assume JUFO’s core segments (dairy, yogurt, and juice) to grow by c23% y-o-y. Meanwhile, we expect the concentrates segment to normalize to pre-crisis levels, reaching EGP1.03bn (down c27% y-o-y and contributing c3% of total revenues). Over 2027–30e, we estimate revenues to grow at a CAGR of c18%, also supported by higher prices and volumes. In 2026e, we expect GPM to remain broadly stable at c25% (lower than our prior estimate of c32% assuming higher concentrates), as we believe that JUFO is more likely to pass on cost increases to consumers to preserve margins, especially due to global cost pressures – particularly due to higher shipping and insurance costs– resulting from ongoing geopolitical tensions. Although skimmed milk powder (SMP)’s price increased c7% y-o-y in 1Q26 to USD2,946/ton, and further rose by c23% y-o-y to USD3,459/ton in 2Q26, likely impacted by the recent geopolitical tensions, JUFO is unlikely to be significantly impacted as it secured most of its SMP needs at favorable prices at the beginning of the year, according to management. Over 2027–30e, we estimate GPM to average c28%, gradually increasing to 29.9% by the end of our forecast period. We expect EBIT to stand at EGP4.93bn in 2026e (below our previous estimate of EGP6.94bn), implying an EBIT margin of c14% (below our prior estimate of c19%). Over 2027–30e, we forecast EBIT margin to average c16%, reaching c18% by the end of our forecast period. We also expect SG&A/sales to average c12% over 2026–30e and forecast total export rebates of EGP848m, equivalent to c4% of total exports. We expect net debt to increase to EGP6.46bn as of 4Q26e from EGP5.96bn in 4Q25 (implying a drop in net debt-to-equity to 0.62x in 4Q26e from 0.74x in 4Q25), then rise further to EGP6.76bn by 2028 in line with the company’s expansionary plans, and decline thereafter. Consequently, we expect the 2026e net profit margin (NPM) to increase by only 0.10 pp to c8% (lower than our previous estimate of c13%), primarily on lower margins, gradually increasing to c13% by 2030e.” Consumers Analyst concluded.

 About HC Brokerage

HC Brokerage is an affiliate of HC Securities & Investment– a full-fledged investment bank providing investment banking, asset management, securities brokerage, research, and custody services. HC Brokerage is an Egyptian registered company and member of Egypt’s Financial Regulatory Authority (FRA), and its registered address is 34 Gezirat Al-Arab St., Mohandessin, Giza, Egypt, Dokki 12311

For further information, please contact: Research@hc-si.com

HC expects the CBE to keep the policy rates unchanged

Posted on by Marwa Nakhla

  • In light of Egypt’s macro economy developments and the geopolitical conditions, the Research Dept. at HC Securities & Investment expects the CBE to keep the policy rates unchanged at its upcoming July 9, 2026 meeting.

Financials analyst and economist at HC, Heba Monir commented: “The regional geopolitical turbulence from the US-Israeli war against Iran, which began on 28 February, is still affecting the global economy and Egypt. Egypt’s stable external position and flexible exchange rate have managed to absorb the conflict’s implications relatively well until now, with the following; (1) Net international reserves (NIR) increased by a total of USD1.68bn y-t-d to USD53.1bn in May, while deposits not included in the official reserves increased by a total of USD647m y-t-d to USD11.0bn, after these deposits had dropped by a total of USD2.90bn from February to April and started recovering in May, (2) Egyptian banks’ net foreign assets (NFA) decreased moderately by USD6.60bn to USD22.9bn in April, from a peak of USD29.5bn in January over the past five years. The NFA figure recovered by USD1.57bn m-o-m in April, after dropping by a total of USD8.18bn in February and March, backed by narrower net foreign treasury outflows. Egypt recorded net foreign inflows of USD4.55bn in 6M26, compared to USD1.34bn only in 6M25. In parallel, the EGP appreciated against the USD by c11% to EGP49.1/USD from EGP54.7/USD in the first week of April, minimizing its y-t-d depreciation to only c3%, (3) Egypt’s USD sources showing stability and improving with worker remittances increasing c38% y-o-y to USD17bn in 4M26, and Suez Canal revenues increasing by c27% y-o-y to USD1.56bn in 4M26. Domestically, we expect headline inflation to move in a sideway direction, after it decelerated to 14.6% y-o-y and 1.6% m-o-m in May from a high of 15.2% y-o-y and 3.2% m-o-m in March, the highest in the past 14 months, affected by the war’s implications on energy prices and FX depreciation. In light of this, the latest 12M T-bills yield of 24.7% implied a positive real interest rate of 6.78% using our updated 12M inflation estimate of c14% (after deducting a 15% tax rate for European and U.S. investors). Therefore, given the geopolitical risks and their implications for Egypt’s USD resources, our downward revision of inflation estimates, the need to maintain the carry trade attractiveness, and the budget deficit targets, we expect the MPC to keep interest rates unchanged at its 9 July meeting.”

It is worth mentioning that, at its  21 May meeting, the Monetary Policy Committee (MPC) of the Central Bank of Egypt (CBE) maintained the benchmark overnight deposit and lending rates at 19.0% and 20.0%, respectively, reversing a total of 825 bps since 2025 of a total 1,900 bps rate hikes since the CBE started its tightening policy in 2022. The MPC also reduced the required reserve ratio (RRR) for commercial banks by 200 bps to 16.0% from 18.0% in February 2026. Egypt’s annual headline inflation decelerated to 14.6% y-o-y in May from 14.9% y-o-y in April, according to the Central Agency for Public Mobilization and Statistics (CAPMAS) data. Monthly prices increased by 1.6% m-o-m in May compared to 1.1% m-o-m in April. On the global front, on 17 June, the U.S. Federal Reserve maintained the target range for the federal funds rate at 3.50-3.75% with total cuts of 175 bps since September 2024, after it hiked rates by 525 bps since it started tightening policy in 2022, while the European Central Bank (ECB) raised the key ECB interest rates for the deposit facility, the main refinancing operations and the marginal lending facility by 25 bps to 2.25%, 2.40% and 2.65%, respectively, with total net cuts of 175 bps since it started cutting rates in June 2024 after it hiked rates by 450 bps since it started its tightening policy in 2022. Given Egypt’s current economic situation, we present below our expectations for the possible outcome of the 9 July MPC meeting..

 

About HC Securities & Investment

 

HC Securities & Investment is a leading investment bank in Egypt and the MENA region. Since its inception in 1996, HC has utilized its relationship-driven insights, local and regional market knowledge, and industry-specific expertise and strong execution capabilities to provide its clients with a wide range of services in investment banking, asset management, securities brokerage, research, custody and online trading through its offices in Egypt and the UAE (DIFC). HC Investment Banking has an outstanding track record of advising leading corporates in Egypt and the MENA region on M&A, capital market, and financing transactions in excess of USD6.6bn. HC Asset Management now manages 7 mutual funds for commercial banks and portfolios for institutions and sovereign wealth funds with assets under management in excess of EGP5.6bn. HC Brokerage is ranked among the top brokers in Egypt and provides a wide array of services, including research and online trading to institutional and retail clients.