Corporate Stock Broking Agency(1) by pptfiles

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									                                                           Corporate Stock Broking Agency.
PORTFOLIO RECOMMENDATIONS. PERIOD: 12th June – 19th June 2007.



                                         AVERAGE
                                           PRICE
   LAST 12                                11th June
   MONTHS              COMPANY              2007                               FINANCIAL INFORMATION.                                                               MARKET AND ECONOMIC INFORMATION.
                           SPECULATIVE
HIGH       LOW
121.00     70.00     Equity Bank            134.00       HY(The Bank reported a 226% increase in net income to KES 402 Million compared             The bank has set aside Ksh. 7.5 Billion for the real estate venture. The bank is aggressively
                                                         to KES 279 million recorded the first quarter 2006 results. Earnings per share went        growing its clientele base which has hit 1 million mark. We expect its innovative product to
                                                         up to Ksh 1.48. The Bank’s non interest income increased significantly by Ksh.338          continue propelling it upwards towards its double digit growth. The bank is likely to introduce
                                                         million. The returns on assets were1.63% up while return on equity was up 16.62%           more capital issuing more shares as it has a low capital ratio and its also expanding vigorously.
                                                         compared to 1.02% and 7.18% respectively for the first quarter of 2006.                    The Bank is planning to get into the lucrative real estate and credit card business at a lower seal
                                                                                                                                                    than other players. Easy loan applications procedures hence high default risk. Has a weak foreign
                                                         P/E ratio; 48.32x                                                                          currency earning capacity due to the retail business. High P/E Multiple
 76.00     22.50     National Bank          57.00        Q1 (The bank’s net income for the three months ended March 31 2007 decreased by            The bank has shown marginal improvements in its performance. We expect an upward move in
                                                         4.64%, to Ksh.152 million, compared to net income of KES160 thousand in the first          the price as there is excess demand for the share. The Government has committed to repay back
                                                         quarter of 2006. Earnings per share decreased to Ksh. 0.76 in the first quarter of 2007,   the loan through a bond that is yet to be floated in the market. The government has committed
                                                         compared to Ksh. 0.80 in the first quarter of 2006). The Bank had KES22 billion in         Kshs 13 Billion for non-performing loans hence non-performing loans will reduce. The bank has
                                                         insider loans and advances a 22% increase from the 2006 (insider loans/advances –          more room to lend and we expect more shares to be sold to the public after the restructuring.
                                                         KES 18 million). The gross non-performing loans in the same period were KES 33.6
                                                         billion, an approximate Ksh. 200 million increase from the same period in 2006.

                                                         P/E ratio; 55x
 15.00     10.00     ACCESS                 12.65        FY (Sales up by 65% to Ksh 577.9 Million. EPS up 440 % to Ksh 0.23 from 0.04.              Good quality of management. The BOD won’t sell its shares for sometime; we expect this
                     KENYA                               Cash flow from operations up 84% to Ksh 68 Million. Cash flow per share stood at           stabilize the price. The shareholding consists of Institutional and High net worth as the majority;
                                                         0.33)                                                                                      we don’t expect to see panic trading. The industry is growing at a high rate. The subject has
                                                                                                                                                    competitive prices for its products.
                                                         P/E ratio; 58.47x
 68.00     22.00     MUMIAS                 26.75        HY (Sales reduced by 23% to Ksh 4. 35. Billion EPS reduced by 43% to Ksh 0.86,             Signed an agreement to set up a boiler at a cost of Ksh 2.6 Billion. Is geared towards realizing its
                                                         Return on equity was 5.84% compared to 10.84 reported the previous year, cash flow         strategic plans in power generation; we expect the company to produce 34 MW of power and
                                                         from operations decreased by 368% to a negative ksh 368 Million. )                         supply it to the national grid. Financed theTARDA project which will be beneficial to the
                                                                                                                                                    company. Signed the power generation agreement and to supply in the market .Duty-free and
                                                         P/E ratio; 8.95x                                                                           COMESA privileges to end in Jan 08 hence to come to free fall at their end year.
 49.00     15.05     Ken Gen                27.25        HY (1.72% increase in total revenue to Ksh 7,423.9 Billion, 20% decrease in                The Government honored the Power tariff move up from Ksh 1.76 to shs.2.36. Increased demand
                                                         operating costs to Ksh 4,506 Billion, 77% increase in operating profits to Ksh 2,917       for power. The government to form another subsidiary company to split the business. To claim
                                                         Billions, increased operating and profit margins). Highly debt financed increased cash     4.5 Billion retrospectively from the power tariff. Government to commission more IPPs. Second
                                                         flow.                                                                                      issue has been postponed for two years. This time span is long enough to give the share ample
                                                                                                                                                    time to appreciate. The company got Ksh 3.5 Billion loan, which is not guaranteed by the
                                                         P/E ratio; 15.94x                                                                          government from the French gvt.
 80.00     16.00     ICDCI                  25.25        HY (38% increase in investment income to 384 Million, 79% increase in profits from         Have a well balanced portfolio of investments e.g. in Insurance, beverages, transport,
                                                         associates, 39% increase in operating profits to Ksh 331 Million, 55% increase in          manufacturing e.t.c. Hence reduced diversifiable risk-. Benefiting from the improved
                                                         EPS, 15% increase in investment portfolio to Ksh 7,007 Million, low expense ratio of       performance of major key sectors through its portfolio. Largest listed investment company at the
                                                         0.75%). Y ends in 30th June with expected growth. We expect a good performance             Nairobi Stock exchange. KWAL is looking to grow its market share by producing cheap
                                                         and dividend from the end year results.                                                    products. Bought into Rift Valley Railways hence to benefit from it in the long run.
Tsavo Securities Limited. Kimathi House, 6th Floor, Kimathi Street. P.O.Box 11987-00100, Nairobi. Tel: 254-20-2013226, 245042, 2023116, 243954, 243958. 0727-546909, 0733-124189. Email: info@tsavo.co.ke . website: www.tsavo.co.ke
                                                           P/E ratio; 22.95x
 110.00     30.00     E. A. CABLES            45.00        Q1 ( The company recorded a 68% increase in its total consolidated revenue for the      Expanding regionally. Attractive price. To benefit from rural electrification and booming
                                                           first quarter of 2007 to Kshs 751Million compared to Kshs 449 million reported for      construction. Demand for copper is still high. Affected by high metal prices. Quality products.
                                                           the first quarter of 2006. The EPS went up by 45% to Ksh.0.48 compared to Ksh.0.33      The gvt is pushing for 3 undersea cable deals where subject can be a beneficiary by supplying its
                                                           recorded the previous quarter                                                           products. Has a one billion shillings expansion plan. The company is getting into Fiber Optic
                                                                                                                                                   Cabling which will boost their sales turnover through the KDN project countrywide cabling
                                                                                                                                                   project.
                                                           P/E ratio; 32.14x
 131.00     13.35     Sasini                  18.45        HY (The company has recorded 18% rise in pretax profit to Sh171.9 million for six       Has local market focus. Likely to re finance its strategic plan through mobilization of more funds.
                                                           months ended March 2007 compared to KSh145.6 million the previous year. The             Changed name from Sasini Tea and Coffee to Sasini Limited opening a window of new
                                                           company’s turnover moved to Ksh.700.7Million from Ksh.444.2 the previous year.          opportunities. New coffee mill is commissioned and working. Tea production has increased
                                                                                                                                                   compared to last year. Strong shilling is a challenge. To open their own coffee outlets. Sustained
                                                                                                                                                   a stable price in the first quarter while all the agricultural went down. But there’s also a reduction
                                                           P/E ratio; 14.81x                                                                       in the world’s tea prices. Diversifying its source of revenue, subject’s business in the following
                                                                                                                                                   industries; agriculture, dairy, horticulture, tourism, forestry, tea and coffee. Vigorous marketing.
 67.00      10.35     Housing                 28.00        FY (0.63% increase in Total interest income to Ksh 1 Billion, 1.36% increase in         Generated interest from other partners. Its 5 year strategy is to become a one stop property shop.
                      Finance                              operating income to Ksh 857 Million, 1.53% decrease in loans and advances to            There are plans to operate as a fully fledged bank. NSSF, Treasury &CDC are likely not to pick
                                                           customers to Ksh 6.3 Billion). High non performing loans, low reserves                  up there rights. Facing stiff competition from other players who are offering better mortgage
                                                                                                                                                   terms. Has a Ksh 13 billion expansion plan. Equity bank bringing in more competition.
                                                           P/E ratio; 31.46x                                                                       Introduced an attractive mortgage product; 1stHOP, which requires minimal deposits. Their
                                                                                                                                                   Assets went up. Have changed to a full commercial bank. Are looking for strategic partners to do
                                                                                                                                                   business.
 435.00     65.00     Jubilee                250.00        FY (Profit before Tax went up by 4.2%. Total asset base went up by 51.8%. The           Cut throat competition in the insurance industry. We believe, the insurance industry
                                           Books close     company proposed a 65% final dividend of Ksh. 3.25. The company’s EPS was up            demonstrated growth last year mainly because of its investment at the NSE. Has cross listed its
                                             28/6/07       51.8 % to close at Ksh. 14.67.                                                          shares in the E. African market. The company is focusing into expanding its business regionally
                                                                                                                                                   and diversification of its brands.
                                                           P/E ratio; 17.04x
355.00      115.00    KPLC.                  209.00        HY (8.14% increase in sales to Ksh 12 Billion, 21% increase in EPS to 11.56. 60         Has a target of connecting 150,000 clients by promoting the ‘Umeme project’ in the rural areas
                                                           cents dividend payout.)                                                                 and also setting aside Ksh 9 billion; this will improve its turn over. Mumias to increase their
                                                                                                                                                   power distribution strategy from their generation. Power bill fee likely to be revised upwards.
                                                                                                                                                   Increasing demand for power. Changing cables systems to enhance efficiency. Reduction of
                                                                                                                                                   system losses is becoming a challenge.
                                                           P/E ratio; 10.06x
                SHORT TERM
 147.00     36.00     KQ                      76.50        FY (Turn over was up 11.3% to Ksh 58.8 Billion, operating profit was down 2.8% to       Is facing fierce competition in its local routes. Likely to compensate the victims of the crash
                                                           Ksh 7.64 Billion, Pre-tax profit was down 14.2% to Ksh 5.98 Billion , EPS was down      hence will impact on them negatively. Competition expected from Virgin and other players in its
                                                           15.1% to Ksh 8.87). Passenger carryings increased by 9% to 2.6 million compared to      international routes; threat effects are not certain. Is facing high staff turn over which is affecting
                                                           the previous period. Cargo volumes increased by 11% mainly due to increased cargo       its long term strategy. Is affected by high Jet fuel. To buy 3 planes from a Brazil jet maker for its
                                                           space. Fuel unit costs increased by 12% or Ksh 1.4 Billion                              local routes. Has gone into a forward contract on fuel to hedge against its price volatility.
                                                                                                                                                   Business for the company is growing as two Embarer E170 expected. High net worth
                                                                                                                                                   shareholders. Facing foreign exchange risk as the shilling is gaining against the dollar.
                                                           P/E ratio; 8.62x
 40.00      13.20     Olympia                 18.00        The company recorded a 36% increase in its turn over. The company’s net profit also    The company approved a rights issue to raise approximately Ksh.300Million to finance its
                                                           went up by a significant 26%. The company is retaining net profits to enhance its      expansion and acquisition exercises. Its subsidiaries in Botswana and South Africa are currently
                                                           expansion programs.                                                                    doing well; we believe they are participating in the vigorous construction going on in South
                                                                                                                                                  Africa for the 2010 world cup. We expect the company to have a long term benefit from its
                                                            P/E ratio; 12.16x                                                                     aggressive expansion regional acquisition exercise; acquired a new company in South Africa
                                                                                                                                                  called Plash Products which has a turnover of Ksh 1 Billion;
 125.00     40.00     NIC Bank                102.00        FY ( interest income increased by 22%, EPS increased by 59%, total assets increased   The bank opened a new capital division which will engage in commercial paper and bond activity
                                                            by 26%, advances to customers increased by 16%, customers deposits increased by       only. The company is also involved in careful expansion into new branches. Nakuru branch was
                                                            32%). NIC Bank’s interest income level is one the highest among the 41 commercial     opened to support extensive asset finance business in the region. Also new branches at Westlands
                                                            banks operating in Kenya and pales the industry average of 60 per cent. Last year,    and the Junction (Dagoretti) are already open. Shrinking net interest pose a threat to the
                                                            the bank raked in Sh1.4 billion from interest income out of its total income of Sh1.9 performance of NIC Bank, who’s lending business accounts for 74 per cent of its income, way
                                                            billion.                                                                              above the industry average. Capital base is believed to be slightly low. High demand from
                                                                                                                                                  institutional investors
Tsavo Securities Limited. Kimathi House, 6th Floor, Kimathi Street. P.O.Box 11987-00100, Nairobi. Tel: 254-20-2013226, 245042, 2023116, 243954, 243958. 0727-546909, 0733-124189. Email: info@tsavo.co.ke . website: www.tsavo.co.ke
                                                         P/E ratio; 18.35x
 430.00    150.00    Nation Media           259.00       FY ( 13% increase in turnover to Ksh 6.34 Billion, 14% increase in pre tax profit to     Improving its market share in the local market. Controlling over majority of the print media. To
                     Group.                              Ksh 1.15 Billion, the company declared a special dividend of Ksh 5 per share and an      improve performance with the upcoming election; we expect to see politicians advertising
                                                         ordinary dividend of Ksh 7 per share. Cash flow from operations increased by 55% to      vigorously. Facing tight competition from the local and electronic prints.
                                                         Ksh 1.16 Billion.)

                                                         P/E ratio; 22.73x
 37.00      12.00    Scan Group.            26.00        FY (Gross turn over was up 29% to Ksh 3 Billion, EPS was up 23% to Ksh 1.17, total       Improved profitability. Acquired 100% stake in Red sky Limited which owns the lucrative
                                                         equity/shareholders wealth increased by 96% to Ksh 470.9 Million, cash flow from         Safaricom advertising account. Continued regional expansion. Likely to increase advertising
                                                         operations increased by 21% to Ksh 142.8 Million). Declared dividend per share of 80     business owing to IPO’s and election campaigns. Enjoys major market share in the region. Its
                                                         cents.)                                                                                  strategy is to continue acquiring and merging with related firms to have huge market share. To
                                                                                                                                                  expand into Nigeria. Has increased number of shares by 21Milion for future use in acquisition.
                                                         P/E ratio; 21.495x
 27.50     17.00     KCB                    23.25        Q1 (The bank recorded a 39% increase in pretax profit to Ksh. 1.2 Billion from           Aggressive advertising, Increased products; western union transfers. S&L unveiled 2 products,
                                         Crediting of    KShs733 million for the same period the previous year. The bank’s total operating        networked, topped TZ branch with a further USD 5 million for lending. Installing new software
                                        shares in CDS    income went up by 23% from KShs2.7 billion for the same period of 2006 to KShs3.3        which costs Ksh 560 Million to enhance operations; will be beneficial in the long run but,
                                          will be on     billion in the quarter under review. The bank’s net loans and advances jumped by         disruptions are expected in the short run. 2.5 months to commence trading. Decentralized
                                           25/6/07       KShs7.1 billion from KShs45.3 billion as at the end of 2006 to KShs52.4 billion in the   decision making in the region; this will reduce bureaucracy costs. We expect supply of shares at
                                                         first quarter of 2007.                                                                   book closure. The US has economic sanctions in Sudan hence investors are pulling out. Got an
                                                                                                                                                  ward as the best performing company in Africa From a recent study.
                                                         P/E ratio; 19.09x



                                                                                                                                                  ……………………………………………….-
 125.00    68.00     TPS ( E.A)s           75.00-xd      FY( Net sales increased by 65% to Ksh 3.26 Billion; Operating profits increased by       Benefit from the booming tourism sector in the East African Region. Strategically expanding in
                                                         115% to Ksh; Financing costs increased by 700% to ksh 142 Million; interest              the East African region through acquisitions-took over 2 Rwandan establishments (Kigali Serena
                                                         coverage was 4.47x compared to 16.57x of previous period; increased operating and        & Lake Kivu Serena Hotel).Likely to raise more money from the market to finance its aggressive
                                                         profit margins; 193% increase in cash flow from operations. Declared a dividend per      expansion through rights issue. Virgin’s promise to fly 600 tourists daily will be beneficial to the
                                                         share of Ksh 1.25) Announced a bonus of 1:5.                                             company

                                                         P/E ratio; 23.96x
 270.00    122.00    Standard               181.00       Q1 (The company reported a 5.23% increase in net income from Ksh.699Million in           Rolling out new products in the market that are likely to improve their market share and
                     Chartered.                          Q1, 2006 to Ksh.735Million in Q1, 2007.The EPS went up to Ksh.2 .70 compared to          profitability. Stanchart controls most of the corporate banking operations in East Africa. Reduced
                                                         Ksh.2.57 the previous year. The net interest income went up to of KES 1.315 Billion      lending rules. Its mortgage product is yet to penetrate the market. Campaign for new clients.
                                                         compared to KES 1.224 Billion for the quarter ended March 31, 2006.                      Introducing fixed rate mortgage targeting middle income earners. Court ruled against the subject
                                                                                                                                                  in a Ksh 420 Million case. Have introduced a banking solution called ‘Straight to Bank’for the
                                                         P/E ratio; 19.96x                                                                        MSE competition. Retained 2 Directors in its AGM who were to retire; for purposes of continuity
                                                                                                                                                  of its strategy.
 100.00    55.00     Barclays Bank.         68.50        FY (11% increase in Interest income to ksh 10.42 Billion, 21.43% decrease in DPS to      Has taken the retail loan campaign all over the country. Opening new branches- more than 80
                                                         Ksh 1.65, 61% increase in gvt securities to Ksh 25.5 billion, 12.7% increase in          branches to be opened in rural areas; Garissa branch re opened. Actively launching new products
                                                         advances to Ksh 73.9 Billion, 15% increase in customer deposits to Ksh 93.84 Billion,    (Ksh 2 Billion set aside). Competition. Mobilizing deposits. Attractive price. Credit cards to be
                                                         Total assets went up 13% to Ksh 118 Billion). Financially stable, minimal growth in      given to low income earners. Barclay Plc is in negotiations to acquire ABN AMRO.
                                                         EPS. Increased products-Islamic banking.

                                                         P/E ratio; 22.83x
 95.00      24.00    Diamond Trust          78.50        Q1 (The Bank has reported a diluted earnings per share of KES1.04, a 76.27 percent       An expansion strategy within E.A is being adopted following a successful rights issue- Opening
                                                         increase from KES 0.59 recorded in 2006. Net income during the period totaled            ATMs, new Branch at TESCO supermarket. Rolling out new banking products, targeting the
                                                         KES145 million compared to KES 75 million in 2006. After-tax profit for the first        retail clients. Increased asset financing business. Has gone to CS retail banking. Has also
                                                         quarter was KES 145 million, as compared to KES 74 million in Q1 2006.                   introduced a ‘Young Rangers’ a/c for kids. Have very strong conservative international
                                                                                                                                                  shareholders. Tanzanian outfit to do a rights issue
                                                         P/E ratio; 20.71x
 122.00     34.00    Pan Africa             87.50        FY (Gross premium increased by 19% to Ksh 1.4 Billion compared to the previous           Improved performance in the market due to economic growth. Continued good growth in general

Tsavo Securities Limited. Kimathi House, 6th Floor, Kimathi Street. P.O.Box 11987-00100, Nairobi. Tel: 254-20-2013226, 245042, 2023116, 243954, 243958. 0727-546909, 0733-124189. Email: info@tsavo.co.ke . website: www.tsavo.co.ke
                     Holdings                            period. Net surplus was up 122% to Ksh 417 Million. EPS was Ksh 9.38 compared to       insurance. APA which is a subsidiary reported 43% increase in pre-tax profit. Introduced a
                                                         Ksh 3.68 reported the previous period. Cash flow from operations was up 47% to Ksh     SANLAM funds management; we expect its revenue stream to increase as fund management is
                                                         653 Million. Ksh 1.44 per share dividend declared)                                     growing in Kenya.

                                                         P/E ratio; 23.78x
 165.00    115.00    E. A. Breweries        146.00       HY (14% increase in sales to Ksh 12.6 Billion, high-constant profit margins, 171%      To spend Ksh. 3.5 Billion in its expansion program in Ethiopia, Sudan and Europe; has entered
                     Ltd.                                increase in financing costs, 11% increase in EPS to Ksh 4.57, 11% increase in DPS to   into Rwanda by opening a selling point. At a mature stage, enjoying economies of scale, many
                                                         Ksh 4.12). Financially stable, high cash flow generated base.                          brands, price searcher, to spend Ksh 500 Million on Ruaraka factory refurbishment. 90 Million
                                                                                                                                                Guinness marketing strategy which is expected to increase demand for Guinness from 13% to
                                                         P/E ratio; 17.85x                                                                      37%. The company is facing challenges in the regions it’s expanding. Foreign demand for the
                                                                                                                                                stock.
 25.00      11.45    CMC.                   14.30        HY (For the six months ended March 31, 2007, the company reported a 15% increase       Has benefited from improved economic performance. Is enjoying government tenders. The
                                                         in sales revenue to KES 4.8 billion, compared to Ksh. 4.2 billion recorded the         company is aggressively coming up with innovative options to increase its sales like Fleet hiring
                                                         previous period. The net income increased by 46% to Ksh. 287Million compared to        and management. This has had positive impact on their bottom-line. Have excess turnover due to
                                                         Ksh. 196Million recorded the previous period. Gross profit margin for the first six    change in shareholding structure.
                                                         months was 22.4%, compared to 20.8% for the full for the six month ended March 31,
                                                         2006.

                                                         P/E ratio; 17.98x
 33.25      11.60    Express               22.00-cd      FY (Sales slipped 22% to ksh 822.5 Million; operating costs down 27% to ksh 708        Diversifying from its non -performing business segments and cutting its cost. Growing transport
                                          closure on     Million; earnings per share was up 23% to ksh 1.87. Declared a dividend of ksh 40      sector due to outsourcing. Rift Valley Railways comeback is a challenge in the long run. Has
                                          (20-25)/7/7    cents per share.)                                                                      strong clientele; GlaxoSmithKline, Uniliver, World bank, Toyota EA, Recktitt benckiser.

                                                         P/E ratio; 11.76x
 24.00      13.00    Unga                   14.60        FY (Sales went down by 3% to hit Ksh 7.31 Billion; operating profits was up 1.8% to    Shrinking market share due to competition from cheap local feed farms. However has benefited
                                                         hit ksh 229 Million; EPS was down 50% to Ksh 0.58 ;)                                   from the revival of Uchumi supermarkets. Have products that can be substituted. Its animal feed
                                                                                                                                                product to benefit from revival of parastatals; for example Kenya meat Commission and KCC
                                                         P/E ratio; 25.17x

          LONG TERM
 99.50      27.00    Athi River             71.50        FY ( sales up 18% to ksh 2.6 Billion; pre-tax profit up 31% to ksh 387 Million;        Cement demand is declining because of delays of the construction plans. We expect the company
                     Mining                              declared dividend of Ksh 1 per share; marginal increase in cash flow) increase and     to raise money to set up a fertilizer plant. New clinker is operational; hence reduced costs and
                                                         high debt to equity ratio.                                                             increased production is expected. Growth expectations in the East & Southern African regions.
                                                                                                                                                EA Portland’s production is expected to dip hence to benefit from this. Cement prices gone up
                                                         P/E ratio; 25.91x                                                                      4%.To raise money to expand a fertilizer plant.
 152.00     80.00    Kenya Oil             99.00-xd      HY(23% increase in sales to Ksh 46.4 Billion, 25% increase in operating costs to Ksh   The company has acquired the entire 20 service stations of Shell Rwanda and 81 service stations
                                                         45 Billion, 7% decrease in EPS , reduced profits). good cash flow base, highly debt    and two terminals in Ethiopia. Is putting up a modern LPG Plant at $1.4 Million. This will
                                                         financed                                                                               improve their medium to long term profitability. Trying to relocate the pump stations built to
                                                                                                                                                legal land. Stiff competition. Challenges from KPC; KPC to expand supplies. Oil prices volatility
                                                         P/E ratio; 12.09x
 148.00     82.00    E.A. Portland         24.02-cd      HY (gross profit increased by 6% over the period under review. The increase in         Likely to sell more shares in the market to compile with the 25% minimum float. Tender for new
                                          closure on     operating profit to Kshs 592Million from Kshs 458 Million prior year was due to        clinker re advertised; we expect this to enhance confidence. Cement prices gone up 4%. The
                                          (12-16)/7/7    good performance and the decrease in selling expenses and other operating expenses     Shilling strength against the Japanese Yen has led to an unrealized foreign currency exchange
                                                         by 16% and 24% respectively. Profit before tax increased by 21%.                       gain of Kshs 427m against Kshs 363m in the previous year. Reduction on constructions due to
                                                                                                                                                the slow approval of the plans by the city councils. Looking to expand to regional markets.
                                                         P/E ratio; 24.02x
 33.25      15.50    Rea Vipingo.           19.40        HY (sales were up 4.24% to Ksh 599.44 million; profit before tax was up 13.6% to       Promising market prospects for its products in the international market. Likely to come up with
                                                         Ksh 100.2 Million; EPS was up 23.169% to Ksh 1.17; cash from operations was            good strategic plan to counter the synthetic alternatives. Likely to record improved performance
                                                         down 36.6% to Ksh 26.9 Million.                                                        as the demand for gunny bags by the coffee millers. Strong shilling has been a challenge. Good
                                                                                                                                                sisal prices
                                                         P/E ratio; 10.32x
 250.00     80.00    BAT                    180.00       FY( sales were up 12% to Ksh 12,669 Million, Operating profit was down 12% to          Improved profitability. The company is expanding its tobacco export which is improving its
                                                         Ksh 1,809 Million, DPS was down 4% to Ksh 12. Assets up to ksh 4.96Billion from        revenue. Declared final dividend of Ksh.7.50. Tobacco bill poses as a big challenge-to hedge this
                                                         Ksh 4.55 Billion.)                                                                     with increased exports (exports 60%). Manufacturing international brands and exporting them
Tsavo Securities Limited. Kimathi House, 6th Floor, Kimathi Street. P.O.Box 11987-00100, Nairobi. Tel: 254-20-2013226, 245042, 2023116, 243954, 243958. 0727-546909, 0733-124189. Email: info@tsavo.co.ke . website: www.tsavo.co.ke
                                                                                                                                                   including- Dunhill, Pall Mall and Benson & Hedges. Have a big challenge by the city council
                                                                                                                                                   bylaws banning smoking in most public places; Nakuru has banned and we expect some councils
                                                         P/E ratio; 14.99x                                                                         to do the same
 900.00     54.00    CFC                  114.00 xd      FY ( Interest income jumped 26% to ksh 3.03 Billion; operating income was up 37%          Likely to conclude merger with the Standard Bank of South Africa through its subsidiary Stanbic
                                                         to Ksh 6.7 Billion; profit after tax was up 70% to ksh 940 Million; Total assets up       Kenya; we expect the two will maintain there names, brands and branches as they are. Have new
                                                         22% to Ksh 40.4 Billion; declared a divided of ksh 1.25 per share.)                       banking products.

                                                         P/E ratio; 22.62x
 250.00    120.00    Bamburi.             200.00-xd      FY ( 10% increase in sales to Ksh 16.7 Billion, 30% increase in EPS to Ksh 7.2, high      Construction industry has gone down due to slow approval by Nairobi City Council. Expanding
                                                         operating margins, increased cash flow from operations)                                   aggressively to S. Sudan and Rwanda. Government expected to increase budget for road
                                                                                                                                                   construction. EA Portland’s production is expected to dip hence to benefit from this. Cement
                                                         P/E ratio; 27.78x                                                                         prices gone up 4%
 85.00      33.50    Standard group          54.50       FY (19% increase in sales, 106% increases in pretax profits). High production costs,     To invest Ksh. 1 Billion towards upgrading of its operations and the printing press. To open a radio
                                                         highly debt financed. Weak cash flow. Announced a bonus of 1:8                            station as part of its long term strategy. Staff turnover hence reduced market share. Building a head
                                                                                                                                                   office on Mombasa road
                                                        P/E ratio; 59.34x
 117.00     68.00    Unilever.             75.00-xd      FY (9% decrease in sales to Ksh 4.24 Billion, 26% decrease in EPS to ksh 1.07, 240%       To benefit from the Government reforms in the Agricultural sector. Strength of the Kenya
                                                         increase in financing costs to Ksh 180 Million, decrease in ROE & ROA, 73%                shilling is a challenge; US tea prices are low, competition from other countries. Likely to realize
                                                         decrease in cash flow from operations). Minimal profitability, strong cash flow base.     bounty harvest due to the good weather conditions. Tea production has increased compared to
                                                                                                                                                   last year.
                                                         P/E ratio; 70.09x
 500.00     50.00    City Trust             137.00       HY (Investment income was down 33.7% to Ksh 542.6 Million; profit after tax went          No change in fundamentals. Relying on one source of revenue stream; I & M
                                                         down 50% to Ksh 133.23 Million. Equity was up 2.7% to Ksh. Investment was up 8%
                                                         to Ksh 185.6 Million.)

                                                         P/E ratio; 44.92x
 165.00     70.50    Williamson Tea         130.00                                                                                                 Concentrated source of revenue. Improved production due to improved weather conditions. Tea
                                                         P/E ratio; negative                                                                       production has increased compared to last year. Strong shilling is a challenge.
 46.75      27.00    Total.                29.25-xd      FY ( 8% decline in sales to ksh 38 Billion, 15% reduction in pre-tax profit to ksh 677     Increasing financing costs. Market share reduced to 20% from 22%-retaining its market share by
                                                         Million, 8.6% reduction in EPS to Ksh 2.78, Dividend per share was Ksh 2.50.              increasing its petrol stations. Reduced capacity by KPC; KPC to expand supplies. Oil price
                                                         operating profit margin was 2.8% compared to 2.67% reported the previous period.          volatility
                                                         77% decline in cash flow from operations. Dividend yield of 8%)

                                                         P/E ratio; 10.52x
 180.00     80.00    Kapchorua Tea          112.00       Year ends 31st March                                                                      Low cash flows. Likely to record good profits with improved weather conditions.

                                                         P/E ratio; 16.49x
 64.00      22.50    Car & General          50.00        HY (Sales were up 52% to Ksh 846.92 Million. Pre tax profits were up 60.78% to Ksh        The management expects good results in the course of the year from sale of generators, 3-wheel
                                                         69.65 Million, EPS was up 17.55 to Ksh 2.21. Cash flow from operations was down           vehicles, Cummins engines and TVS motor cycles. The company is under an expansion program
                                                         to a negative Ksh 83 Million from Ksh 40.5 Million.                                       which we believe will be positive

                                                         P/E ratio; 8.21x
 64.50      25.00    Crown Berger          44.00-cd      FY (The company posted a 17% increase in revenue to Ksh. 1.6Billion compared to           Expanding regionally to hedge against competition. Market share affected by counterfeit
                                                         Ksh. 1.4 Billion recorded the previous year. The earnings before tax went up by 15%       products. To benefit from the booming construction contracts in Sudan. Affected by marbles as
                                                         to Ksh. 80.3 Million. Earnings per share were up by 109% to Ksh.3.03 from Ksh. 1.00       an option to painting. Rolling new paints for the road and run ways; targeted for the JKIA
                                                         the previous year. The company’s total assets have increased by 21.92% to Ksh.1.5         upgrade and the North and South Corridor road network. The company’s expansion in Uganda
                                                         Billion from Ksh. 1.2 Billion the previous year.                                          has picked up on good note.


                                                         P/E ratio; 14.52x
 50.00      24.50    Marshalls              43.00        Year ends 31st March                                                                      Shrinking market share due to lost tenders. Facing competition from General Motors and cheap
                                                                                                                                                   second hand imports. Revival of the agriculture sector has been advantageous to the subject as it
                                                         P/E ratio; 13.50x                                                                         has managed to sell machinery.

Tsavo Securities Limited. Kimathi House, 6th Floor, Kimathi Street. P.O.Box 11987-00100, Nairobi. Tel: 254-20-2013226, 245042, 2023116, 243954, 243958. 0727-546909, 0733-124189. Email: info@tsavo.co.ke . website: www.tsavo.co.ke
                        HOLD

 400.00    310.00    Limuru Tea.          400.00-xd      FY (37% increase in sales to Ksh 57 Million, 100% increase in DPS to Ksh 10, 250%      The shares are illiquid in the market. tea price fluctuations, competition from other low cost
                                                         increase in EPS to Ksh 8.05 increased profit margins, 21% decrease in cash flow from   producing countries. Tea production has increased compared to last year. Strong shilling is a
                                                         operation). High dividend payout, weak cash flow                                       challenge.

                                                         P/E ratio; 49.69x
 40.00      12.00    Sameer Africa.         13.95        FY ( 5.6% reduction in sales, reduced profit margins, 110% reduction in EPS,           Has a subsidiary company that imports tires to hedge against cheap imports; started building
                                                         increase in financing costs). Weak cash flow decreased financial liquidity, loss       other brands e.g. Japanese Bridgestone, Dunlop, and Hankook. Retrenched its staff. Stiff
                                                         makings.                                                                               competition from cheap imports. To go into real estate; by build a business park on mombasa
                                                                                                                                                road. Spend huge cash on marketing “Yana”
                                                         P/E ratio; negative
  5.00      4.15     Kenya Orchards          5.00        To announce results                                                                    Competition from the middle east and other cheap products.

                                                         P/E ratio; negative
 45.00      9.90     A. Bauman              27.00        Year ends 31st March                                                                   The Group trades in electrical, agricultural, and construction equipment and also holds
                                                                                                                                                investment properties and other investments. Improved demand for its products in the
                                                         P/E ratio; negative                                                                    construction industry. The shares are illiquid.
 28.00      7.80     Eveready.               7.95        HY (The company ahs recorded a 125% increase in net income after tax. This is          The company recorded reduced profitability. Is highly affected by the counterfeit products from
                                                         attributed to the cost cutting strategy and good control of expenses. The net profit   the East. Reducing market share due low demand for its products. The company is using outdated
                                                         went up to Ksh. 80 million in the half year, 07, compared to Ksh. 70 Million the       technology, making its products expensive. Trading below IPO price. Price likely to be
                                                         previous year. The EPS went up to Ksh. 0.38 compared to KES 0.34 the previous half     suppressed lower as the demand is minimal. Coming up with new products to match technology;
                                                         year. The revenue went up to Ksh. 1.17 billion, compared to Ksh. 991 million in the    portable mobile phone charges to be used in rural areas.
                                                         first half of fiscal 2006.

                                                         P/E ratio; 10.09x

              EXIT
HIGH       LOW
 67.00     16.75     Eaagads                50.00                                                                                               Gearing up to take advantage of the reforms in the coffee sector. Trading at its peak.


                                                         P/E ratio; 79.37x
 55.50      32.00    Kakuzi                  31.75                                                                                              Restructuring their business model to hedge against draught and Foreign currency fluctuations.
                                                         P/E ratio; 4.86x                                                                       To sell some of its property to its subsidiary in phases. There are allegations of malpractices. Had
                                                                                                                                                a very stormy AGM meeting in regards to sale of its property.
          SUSPENDED
 160.00    140.00    BOC                    160.00       HY(For the six months ended 31 March 2007, the company recorded a 12% increase         Capital Markets Tribunal delivered its decision in respect of the Appeal by BOC Kenya Limited
                                                         in revenue to Ksh. 587m compared to Ksh. 523Million over the same period last year.    over its take over of Carbacid. The Tribunal ruled in favor of BOC Kenya Limited and set aside
                                                         The company recorded a 10.33% increase in Operating profit to Ksh. 151Millon           the earlier decision of CMA not to allow the conclusion of the transaction. Subsequently, CMA
                                                         compared to Ksh. 137Millon the previous year.). The company’s EPS has increased to     has appealed against the decision of the Tribunal in the High Court. The matter is waiting for the
                                                         Ksh. 6.17 compared to Ksh. 5.58 the previous year. The board has declared an interim   outcome of the Appeal. The BOC Group was taken over by the Linde Group, in the UK as from
                                                         dividend of 60% including a special dividend of Shs 1.60 per share. The books are      September 2006. This has made the company to change its financial to 31'' December from 30th
                                                         closing on the 1, July, 2007.                                                          September

                                                         P/E ratio; 13.83x
 138.00    126.00    Carbacid               137.00       HY (Profits up 54% to ksh 97.8 Million, Declared an interim dividend of Ksh 5 per      The tribunal ruled in favor of the takeover, of Carbacid by BOC. CMA appealed this decision to
                                                         share.)                                                                                the courts of appeal.

                                                         P/E ratio; 13.69x
 23.25      10.45    Uchumi                  14.50                                                                                                                                                           The company is to
                                                                                                                                                Has enough working capital, the turnaround of last 1 yr has been positive.
                                                                                                                                                issue additional debentures to raise Ksh. 600Million as part of its
Tsavo Securities Limited. Kimathi House, 6th Floor, Kimathi Street. P.O.Box 11987-00100, Nairobi. Tel: 254-20-2013226, 245042, 2023116, 243954, 243958. 0727-546909, 0733-124189. Email: info@tsavo.co.ke . website: www.tsavo.co.ke
                                                                                                                                                        recapitalization process. Investors have agreed to take up the Ksh 360 Million
                                                                                                                                                        debenture.


 20.25      20.25     Hutchings                 20.25


KEY:
Speculative: Capital gain spans approximately 3 months. The current fundamentals provide an opportunity for capital gain.
Short Term: Capital gain spans approximately 6-10 Months. The company has some significant prospects in its industry.
Long Term: Capital gain falls beyond 12 month. The fundamentals are strong and the company has bright future.
Exit: The Company is trading on its peak based on its current price or there are fundamental concerns .
Hold: No action is anticipated ion the near future. The company is expected to take some actions.
HY ( ): Most recent half year results
FY ( ): Most recent full year results.
-cd (cum dividend), ca (cum all), xd (ex-dividend), xs (ex-split), xc (ex-coupon)
P/E Ratio/Multiple; The P/E ratio is equal to a stock's market capitalization by its earnings a 12-month period, usually the trailing period but occasionally the current or forward period. The value is
the same whether the calculation is done for the whole company or on a per-share basis. Companies with high P/E ratios are more likely to be considered "risky" investments than those with low P/E
ratios, since a high P/E ratio signifies high expectations. Comparing P/E ratios is most valuable for companies within the same industry. Before using the above parameter to make an investment
decision, please contact us for more explanation


            MOMBASA                                                                                                                ELDORET                                                            KISUMU
     Ground Flr, Hassan Ali
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     Building, Nkrumah Road                    6th Floor, Kimathi House, Kimathi Street                                 Uganda Road,                                                      Oginga Odinga Street, Kisumu
     P. O. Box 83407 - 80100                   P O Box 11987-00100, GPO, Nairobi                                        P.O.Box 7268-30100, Eldoret                                       P.O.Box 4121 Kisumu 40103
     Mombasa                                   Tel +254- 20-202 3116, 245 042, 300 1470, 243 954, 243 958               Tel: +254 -53-203 0877,                                           Tel: +254 57 202 4848,
     Tel: +254 -41 231 9039,                   Cell+254-727 546 909, 0733 124 189                                       Cell: +254 729-330542, 0733-462555                                Cell: +254 722 390 16
     Fax: +254 041 231 9038                    Fax +254 20 243 958                                                      Fax: +254 53-2030880                                              Fax: +254 57 202 14143
     Email: msa@tsavo.co.ke                    E-mail: info@tsavo.co.ke                                                 Email: eld@tsavo.co.ke                                            Email: ksm@tsavo.co.ke
     Website: www.tsavo.co.ke                  Website www.tsavo.co.ke                                                  Website: www.tsavo.co.ke                                          Website: www.tsavo.co.ke


  Disclaimer:   “This report is prepared for general information only and as such, the specific needs, investment objectives or financial situations of any particular user have not been taken into consideration. Users are therefore advised to
                                                               consult Tsavo Securities Limited for financial advice on the merits of the recommendations for specific circumstances.”




Tsavo Securities Limited. Kimathi House, 6th Floor, Kimathi Street. P.O.Box 11987-00100, Nairobi. Tel: 254-20-2013226, 245042, 2023116, 243954, 243958. 0727-546909, 0733-124189. Email: info@tsavo.co.ke . website: www.tsavo.co.ke

								
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