EXECUTIVE SUMMARY
EXCEPTIONAL COMMERCIAL ACHIEVEMENTS ..., REVISION OF OUR TARGET PRICE
Half-year achievements well above expectations
At the end of the first half of 2021, Auto Hall shows a solid recovery of its revenue of 129% to MAD 2,825 Mn. Compared to H1-19, the growth rate is still high at 33.4%. At the origin of this performance, the recovery of automotive sales of +105% after a particularly difficult year 2020 under the effect of the health crisis.
EBITDA rose by 87.7% to MAD 426 Mn in H1-21, boosted by a property sale of MAD 120 Mn. Restated for this non-current transaction, the increase in EBITDA would be 34.8% to MAD 306 Mn, i.e. a margin of 10.8% in H1-21 almost equivalent to that in H1-19. In the end, the reported consolidated net income settled at MAD 201 Mn. Excluding the sale operation, profit would amount to MAD 118 Mn against a loss of MAD -29 Mn in H1-20 and a profit of MAD 77 Mn in H1-19.
Under these conditions, the achievement rates of the Auto Hall Group are above expectations compared to our annual forecasts (Cf. Listed Companies 2020 Results).
A gain in MS thanks to the network size and the availability of stocks
During this first semester, Auto Hall outperformed its sector thanks to two factors: (1) the size of its distribution network and (2) the availability of its stocks compared to the competition. In this favorable context, the Group's sales volumes rose by 138% to 14,589 units.
In more detail, the Opel brand climbed to 5th position in best sellers in the private cars category, up 202% compared to H1-19 to reach a Market Share of 4.9%. For its part, DFSK ranks in first position of LCV sales with a growth rate of 249% compared to H1-19, i.e. a MS of 19.6%. In the end, Auto Hall gained 3.4 points of MS, going from 10.7% in H1-19 to 14.1% at the end of this first half.
An undeniable ability to surprise the market in terms of dividends
Taking into account the solid dynamics of the automotive sector in Morocco observed in 2021, we have retained our initial growth scenario, developed pre-health crisis (Cf. Book Africa 2020). At the end of this exercise, we revised our target price to MAD 105 against MAD 95. We therefore recommend to HOLD the Auto Hall stock thanks in particular to its ability to surprise the market in terms of dividends over the period 2021-2022.
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