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					                                                                                                                               EGYPT | AUTOMOTIVE

                                                                                                                                                                                 th
                                                                                                                                                                    10 May 2010
                         GB Auto                                                                                                                LTFV| EGP46.5
                                                                                                                                        TARGET PRICE|EGP46.5
                         Gearing up for expansion                                                                                         BUY|MODERATE RISK
                         GB Auto [AUTO] is a leading player in the Egyptian automotive industry,
                         and has an exclusive license from South Korea’s Hyundai Motor Company               SHARE DATA
                         to distrubute its vehicles in the Egyptian market. For the past 10 years, GB
                         Auto’s range of competitively-priced products has held a leading market             Reuters; Bloomberg                                                                      AUTO.CA , AUTO EY
                                                                                                             Recent price as of 10-May-10                                                                      EGP 38.33
                         share of 26% in the passenger car segment, and and it is currently the
                                                                                                             No. of O/S shares                                                                                  129.0 mn
                         largest player in the three-wheel vehicles market (with a c. 99% market             Market cap                                                                                        4944.6 mn
                         share). In February 2010, GB Auto entered into a key export agreement in            52-wk high / low                                                                           EGP 39/ EGP 16.3
                         Iraq, where we estimate it has sold 22,500 units to capture a c. 22.5%              Avg. daily volume / turnover                                                          0.16 mn / EGP 4.16 mn
                         market share thus far in FY10. Though it already owns the largest after-
                         sales network in both Egypt and the Middle East, the company has                    COMPANY SYNOPSIS
                         embarked on an EGP1.1bn capex plan (EGP400mn of which was spent                     GB Auto's business was founded by Sadek and
                         between 2008-2009) to enhance both that network and its other                       Kamal Ghabbour in 1940. In 1956 the company
                         operations. 63% of the capex plan is directed toward increasing the                 was incorporated as the Ghabbour brothers with a
                         number of after-sales centres to 35 by FY12 (from the current 12). We are           business activity of trading in automotive- related
                         confident in the company’s fundamentals – its driving catalysts include             products and construction materials. In the early
                         estimated triple-digit earnings growth in 2010. GB Auto currently trades at         1970s, the company began securing agent
                         a forward 2010 PER of 11.9x compared to its global peers’ 11.3x. Using              licenses for passenger car, bus and automotive
                         our Discounted Cash Flow (DCF) valuation method, we have assigned a                 part distributors.
                         value of EGP46.5/share for both LTFV and TP, implying a 21.2% upside
                                                                                                             In July 2007, GB Auto shares began trading on
                         potential from the stock’s current market price of EGP38.3/share. We                The Egyptian Exchange (EGX) after the
                         therefore initiate our coverage with a Buy recommendation and Moderate              completion of capital increase through an IPO.
                         Risk rating.
                                                                                                             Hence, GB Auto became the first automotive
                         Diversified sales portfolio: GB Auto's main activities are the assembly and
                                                                                                             company to float shares on the Egyptian stock
                         distribution of a diversified portfolio of products (including passenger cars,
                                                                                                             market.
                         commercial vehicles, two and three-wheel vehicles and construction equipment)
                         in partnership with large Original Equipment Manufacturers (OEMs). In addition,     GB Auto has an authorized capital of EGP400mn
                         the company has launched a business finance leasing and microfinance project.       and an issued and paid-in capital of EGP129mn
                         GB Auto has the largest after-sales centre network in Egypt: 12 centres spread      distributed over 129mn shares at a par value of
                         across the country (6 for passenger vehicles and 6 for commercial vehicles).        EGP1/share.
                         Expansion plans: To enhance both its market share and its leadership in the
                         Egyptian market, GB Auto has allocated a capex plan of approximately
                         EGP1.1bn for 2008-2012. The bulk of this EGP591mn plan is to be spent from          SHAREHOLDER STRUCTURE
                         2010-2011, and its largest share is directed toward increasing the company’s
                         after-sales network to 35 centres by the end of FY12.                               Dr. Raouf Ghabbour & Family                                                                                            70.9%
                                                                                                             Free Float                                                                                                             29.1%
                         New joint venture projects: GB Auto has established a joint venture with Al-        Total                                                                                                                 100.0%
                         Kasid Group for the distribution of Hyundai passenger cars in Iraq, in addition
                         to inking an agreement with Allab Group for the export and distribution of
                         trailers in Algeria. It has also launched a joint venture with Marco Polo for the
                         distribution of buses in that company’s markets.
                         Valuation and Recommendation: We used the discounted cash flow (DCF) for                     AUTO vs. EGX30 performance
                         free cash flow to the firm (FCFF) to value GB Auto's shares, and have assigned          EGP
                                                                                                                                                 Volume                      AUTO                            EGX 30 - rebased

                                                                                                                                                                                                                        mn shares
INITIATION OF COVERAGE




                         the stock a value of EGP46.5/share for both LTFV and TP, implying a 21.2%               45                                                                                                                          1.2
                                                                                                                 40
                         upside potential from its market price of EGP38.3/share. Hence, we initiate                                                                                                                                         1.0
                                                                                                                 35
                         coverage on GB Auto as a Buy with a Moderate Risk rating.                               30                                                                                                                          0.8

                         EGP mn               2008 A    2009 A     2010 P     2011 P     2012 P                  25
                                                                                                                                                                                                                                             0.6
                                                                                                                 20
                         Revenues            5,192.4   4,258.4    7,625.3   10,547.5   11,838.1                  15                                                                                                                          0.4
                         Growth rate                    -18.0%     79.1%      38.3%      12.2%                   10
                                                                                                                                                                                                                                             0.2
                                                                                                                  5
                         EBITDA               646.4      405.7     823.5     1,107.5    1,219.3
                                                                                                                  0                                                                                                                          -
                         Growth rate                    -37.2%    103.0%      34.5%      10.1%
                                                                                                                                                  Aug-09

                                                                                                                                                           Sep-09



                                                                                                                                                                                 Nov-09

                                                                                                                                                                                          Dec-09
                                                                                                                      May-09

                                                                                                                               Jun-09

                                                                                                                                        Jul-09




                                                                                                                                                                    Oct-09




                                                                                                                                                                                                    Jan-10

                                                                                                                                                                                                               Feb-10

                                                                                                                                                                                                                          Mar-10

                                                                                                                                                                                                                                    Apr-10




                         EBITDA margin        12.4%       9.5%     10.8%       10.5%      10.3%
                         Net income           415.9      201.4     406.8      502.8      661.9
                         Growth rate                    -51.6%    101.9%      23.6%      31.7%                      Ahmed Abdel Ghani
                         Net margin             8.0%      4.7%      5.3%       4.8%       5.6%
                                                                                                               Ahmed.Abdelghani@cich.com.eg
                         PER                   11.6x      23.9x     11.9x       9.7x       7.4x
                         P/BV                   2.8x       2.7x      2.3x       2.0x       1.7x
                         EV/EBITDA              8.6x      13.5x      8.0x       6.5x       5.4x
                                                                                                                        Fadwa Hossam
                         Net debt/EBITDA        1.1x       1.6x      2.1x       2.1x       1.3x                   Fadwa.Hossam@cich.com.eg
                         Dividend yield        0.0%       2.7%      2.5%       3.3%       4.2%
                                                                                                                                                                             1
                         Source: GB Auto and CICR estimates

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                                                                                                                                            th
                         Table of Contents                                                                                             10 May 2010

                         Evaluation ....................................................................................... 3
                         I. Investment Case .......................................................................... 4
                                A. Positives ............................................................................... 4
                                B. Negatives ............................................................................. 5
                         II. Valuation ..................................................................................... 6
                                A. DCF and Target Price…………………………………………….6
                                 B. Risks to our Recommendation………………………………….7
                                C. Technical Analysis……………………………………………......7
                         III. Company Profile & Management............................................... 8
                                A.Company Profile .................................................................... 8
                                B. Management ...................................................................... 10
                                C. Corporate Structure ............................................................ 11
                         IV. Operational Summary.............................................................. 13
                                A. Capacity Expansion ............................................................ 13
                                B. Business Segments ............................................................ 13
                         V. Financial Analysis & Forecasts ............................................... 18
                         A. Major Lines of Business .......................................................... 18
                                Passenger Cars (PCs) ............................................................ 18
                                Commercial Vehicles (CVs) ..................................................... 22
                                Two and Three-Wheel Vehicles............................................... 24
                                Other Lines of Business .......................................................... 24
                         B. Other Financial Issues ............................................................. 30
                                Capital Expenditures (CAPEX) ................................................ 30
                                Employee Stock Ownership Plan (ESOP)................................ 31
                                Loans convertible to common stock......................................... 31
                                Earnings per share (EPS)........................................................ 32
                         VI. Appendix .................................................................................. 33
INITIATION OF COVERAGE




                                Recent Developments ............................................................. 33
                         VII. Financial Statements .............................................................. 35




                                                                                                                                        2

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                                                                                                                                  EGYPT | AUTOMOTIVE

                                                                                                                                                      th
                                                                                                                                                10 May 2010
                         Evaluation
                         With over 50 years experience, GB Auto [AUTO] is a leading player in the
                         Egyptian automotive industry, reporting EGP4.3bn in revenues in 2009. The
                         company operates across the industry value chain, assembling and distributing
                         passenger cars (PC), commercial vehicles (CV), two and three- wheelers and
                         providing after-sales service through the largest service network in both Egypt
                         and the Middle East. GB Auto’s other business segments include automotive
                         components, tires, leasing & micro-finance activities as well as construction
                         equipment. During 2009, GB Auto was able to mitigate the negative impact of
                         the global recession through a cost control program focused on reducing
                         overheads and closely monitoring inventory levels.
                         Key elements of the company’s segment performance are highlighted below:

                            As passenger cars contribute 68% of sales revenue (EGP2.9bn including
                             after-sales revenue), they are a key performance driver. GB Auto sold
                             41,646 units in 2009.
                            The commercial vehicle segment (consisting of buses, trucks, trailers and
                             superstructures)     demonstrates    the group’s         capabilities  through
                             manufacturing. Commercial vehicles accounted for 13.8% of total revenues
                             in 2009 - GB Auto sold 1,228 trucks, 792 buses and 646 trailers.
                            Two and three-wheel vehicles contributed 14% of revenues in 2009 - the
                             company sold 47,878 units.
                            Other lines of business (LoBs), including tires, construction equipment,
                             transportation services and leasing activities contributed 4.3% of revenues in
                             2009.
                         GB Auto has entered a slew of joint venture agreements to secure both
                         representation rights and access to new markets (that give the company
                         preferential trade access).
                         Following its 2009 expansion into the Algerian market through its trailer venture,
                         GB Allab-Remorque, and GB Auto’s joint venture with Brazil-based Marco
                         Polo, we believe this served as the driving catalyst for the commercial vehicles
                         segment, which grew 43% year-on-year (YoY) to EGP837mn in 2010.
                         We estimate that GB Auto’s Mazda representation and its Iraqi joint venture
                         with Al Kasid have stimulated PC sales to grow by 100% to reach EGP5.8bn
                         thus far during 2010. Passenger car sales in the Iraqi market alone are
                         expected to account for a c. 32% share of the segment’s total revenues.
                         We valued GB Auto Group using a discounted cash flow (DCF) model for free
                         cash flow to the firm (FCFF) to derive its LTFV. We used a risk free rate of 10%,
                         an equity market premium of 8%, a Beta of 0.7x and a perpetual growth rate of
                         4%. GB Auto is currently traded at 2010PER of 11.9x vs. its international peers’
                         average multiple of 11.3x. We have assigned the stock a value of
                         EGP46.5/share for both LTFV and TP, implying 21.2% upside potential from its
                         current market price of EGP38.3/share. Hence, we assign a Buy
INITIATION OF COVERAGE




                         recommendation with a Moderate Risk rating.
                         We expect GB Auto to generate positive FCF from FY12 onwards, once it has
                         finalized its capex program.
                         Figure 1 | CICRe relative to other consensus estimates
                                                                         CICR estimates                   Other Consensus               CICRe vs. Consensus
                         (EGP mn, unless otherwise stated)      2010 P      2011 P        2012 P   2010 P     2011 P     2012 P   2010 P       2011 P     2012 P
                         Revenues                               7,625       10,547        11,838   7,594      10,187    12,531     0.4%         3.5%       -5.5%
                         EBITDA                                  824        1,107         1,219     767        1,082     1,383     7.3%         2.3%      -11.8%
                         EBITDA Margin (%)                      10.8%       10.5%         10.3%    10.1%       10.6%     11.0%     0.7pp       -0.1pp      -0.7pp
                         Net Income                              407         503           662      405         604       813      0.3%        -16.8%     -18.6%
                         Net Income Margin (%)                   5.3%        4.8%          5.6%     5.3%        5.9%      6.5%     0.0pp       -1.2pp      -0.9pp
                         P/E*                                    11.9x       9.7x          7.4x     12.1x       8.2x      6.1x
                         *PE calculated based on CICR’s estimated number of shares
                         Source: CICRe and Others



                                                                                                                                                  3

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                                                                                                              EGYPT | AUTOMOTIVE

                                                                                                                             th
                                                                                                                       10 May 2010
                         I. Investment Case
                         A. Positives
                            GB Auto is currently Egypt’s sole local importer and assembler of South            Operating at all levels
                             Korean brand Hyundai Motor Company (Hyundai) vehicles, and the                     of the automotive
                             company boasted a dominant market share of 26% in the passenger car                industry value chain
                             segment in FY09. Having renewed its representation rights for Mazda
                             vehicles, GB Auto is set to re-introduce them to the Egyptian market in May
                             2010.

                            GB Auto is engaged at each level of the automotive industry value chain:

                                 Assembling, distributing and selling passenger cars (PCs) and
                                  commercial vehicles (CVs);
                                 Manufacturing semi-trailers, superstructures, light and medium trucks
                                  and bus bodies;
                                 Providing after-sales services, such as selling automotive components;
                                 Providing two and three-wheelers, tires, leasing & micro-finance
                                  services and construction equipment.

                            Competitive overhead cost structure provides GB Auto with a considerable            Low-cost environment
                             competitive edge (for both assembly and manufacturing) compared to peers
                             in other emerging markets (including Eastern Europe).

                            GB Auto’s offers competitive-value propositions in order to meet its                Competitive value
                             customers’ growing needs. Spare-part availability and numerous after-sales
                                                                                                                 proposition
                             service centres are key to the company’s success. It currently owns 12 after-
                             sales centres (six for PCs and six for CVs) and plans to bring this number to
                             35 (25 for PCs and 10 for CVs) by 2012.

                            Hyundai passenger cars have the highest second-hand retention value
                             compared of any vehicle in Egypt.


                            The industry’s capital-intensive nature and its high initial investment costs       Barriers to entry
                             reduce the risk of new competition.

                            GB Auto has cultivated strong partnerships with major Original Equipment            Strong partnerships
                             Manufacturers (OEMs), including Hyundai (for passenger cars) and                    agreements with
                             Mitsubishi & Volvo (for commercial vehicles). It also has exclusive
                                                                                                                 leading global OEMs
                             distribution rights for both Lassa and Yokohama tires.

                            GB Auto received a BBB+ rating with a stable outlook from the Middle East           Stable rating
                             Rating and Investors Service (MERIS).

                            Egypt is party to a number of international trade agreements, particularly
INITIATION OF COVERAGE




                             Aghadir and the Egypt-EU Free Trade Agreement. These agreements are
                             expected to stimulate sales.

                            Legislative changes allowing licensing for three-wheel vehicles (tuk-tuks)
                             have helped GB Auto grow this business segment.

                            Traffic Law No. 121 (2008), requiring the replacement of all taxis 20 or more
                             years old created a sales window of 13,440 vehicles in 2009. GB Auto’s
                             contribution to the taxi replacement program stood at 4,584 units that year, a
                             34% share.




                                                                                                                         4

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                                                                                                                        th
                                                                                                                   10 May 2010
                         B. Negatives
                            The automotive industry is highly suceptible to changes in the economic          Highly cyclical industry
                             environment and as such is very cyclical. A downturn in consumer demand
                             would not only impact sales, but also demand for after-sale services and
                             spare parts.

                            GB Auto is exposed to fluctuations in the values of a number of currencies,       FX risk
                             including the US dollar and the Japanese Yen. The company’s revenues are
                             denominated in Egyptian Pounds, while the cost of goods sold is either
                             priced in foreign currencies or in reference to them.

                            The passenger car market is subject to intense competition, given that a          Rising competition
                             number of manufacturers offer a wide range of vehicles varying in size,
                             engine capacity and price. We believe the growing numbers of low-priced
                             Chinese vehicles and the entry of Chinese manufacturers into the market
                             could affect GB Auto’s market share.

                            GB Auto’s Chairman and Managing Director, Dr. Raouf Ghabbour, is a                A family-run business
                             key member of the company’s management team (as with most large family
                             businesses operating in Egypt). Still, we feel measures have been taken to        undergoing
                             transform the company into a regional player and bring on board qualified         institutionalizing
                             management team at a C level.                                                     efforts
INITIATION OF COVERAGE




                                                                                                                    5

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                                                                                                                                     th
                                                                                                                                 10 May 2010
                         II. Valuation
                           A. DCF and Target Price
                         We valued GB Auto Group using a discounted cash flow (DCF) model for free
                         cash flow to the firm (FCFF) to derive its LTFV. We used a risk free rate of 10%,
                         an equity market premium of 8%, a WACC of 15.5%, a Beta of 0.7x and a
                         perpetual growth rate of 4%. GB Auto is traded at a forward 2010PER of 11.9x
                         vs. its international peers multiple average of 11.3x. We assigned a value on
                         the stock of EGP46.5/share for both LTFV and TP, implying a 21.2% upside
                         potential from its current market price of EGP38.3/share. Hence, we assign a
                         Buy recommendation on the stock with a Moderate risk rating.
                         We expect GB Auto to start generating a positive cash FCF after FY12, once it
                         has finalised its Capex program.
                         Figure 2 | DCF Valuation
                         EGP (mn)                                                    2010 P       2011 P     2012 P     2013 P    2014 P
                         NOPAT                                                         609          838        914       930        913
                         Depreciation and amortization                                 74           91         106       118        120
                         Net plant expenditures                                       (658)        (410)      (297)      (162)     (121)
                         Working investment                                          (1,087)       (932)       137        86        124
                         FCFF                                                        (1,062)       (414)       861       972      1,036
                         PV of FCFF                                                   (968)        (327)       588       575        531
                         PV of Terminal Value                                         4,812
                         WACC                                                         15.5%
                         Prepetual Growth rate                                        4.0%
                         Corporate value                                              5,211
                         Total Debt (Dec-09)                                          (104)
                         Total Cash (Dec-09)                                           13
                         Minority interest (Dec-09)                                    (67)
                         Equity value                                                 5,053
                         Total Number of shares                                        129
                         No. of treasury shares                                         3
                         No. of Outstanding shares                                    125.7
                         Current FV                                                   40.2
                         LTFV                                                         46.5
                         Source: CICR estimates

                         Figure 3 | Sensitivity analysis (LTFV)
                                                                         WACC
                                           46            13.5%     14.5% 15.5%         16.5%     17.5%
                                          2.0%            50        44     39           35        31
                             Prepetual
                              Growth




                                          3.0%            55        48     43           38        34
                                          4.0%            61        53     47           41        36
INITIATION OF COVERAGE




                                          5.0%            69        59     51           45        39
                                          6.0%            78        66     57           49        43
                         Source: CICR estimates

                         GB Auto is trading at 2010E PER multiple of 11.9x vs. its international peers’
                         average multiple of 11.3x.
                         Figure 4 | Peers analysis
                                                                                           2010
                                             Name
                                                                          Country    P/E      EV/EBITDA
                         Mahindra                                           India   15.2         11.1
                         Asbury Automotive                                  USA     10.3          9.2
                         Pendragon                                           UK     11.3          4.4
                         Lithia Motors                                      USA     10.5         10.7
                         UNIPRES                                           Japan     9.5          2.9
                         Average                                                    11.3          7.7
                         GB Auto                                          Egypt     11.9         8.0
                                                                                                                                 6
                         Source: Bloomberg, prices as of May 10th, 2010

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                                                                                                                                                                                                                     EGYPT | AUTOMOTIVE

                                                                                                                                                                                                                                                       th
                         B. Risks to our recommendation                                                                                                                                                                                            10 May 2010

                         Downside risks
                         Unexpected delay in economic recovery: Weaker-than-expected economic
                         recovery could impact sales revenues.
                         Delay in capex program: Any delay in GB Auto’s capex expansion plans could
                         impact our valuation.
                         Competition: Strong competition and new entries to the market (primarily from
                         low-priced Chinese vehicles) may force GB Auto to surrender some of its
                         market share.
                         Supply risk: Any exposure to risks and uncertainties associated with its
                         dependent OEMs (Hyundai, Mitsubishi, and Volvo) could impact GB Auto’s
                         main operations.
                         Fluctuations of Foreign Exchanges: As GB Auto depends mainly on OEMs, it
                         is subject to foreign exchange rate fluctuations (especially in the US dollar and
                         the Japanese Yen) as well as any supplier behaviour prompted by fluctuations
                         in the Korean Won. We believe that any depreciation in the Egyptian Pound GB
                         Auto’s margins.
                         C. Technical Analysis
                         Mohamed El-Zayat | Mohamed.Elzayat @cich.com.eg
                         The stock is still bound in consolidation trading inside a tight range below 38.
                         Although further sideways trading could be seen, it should be treated as a
                         correction to a sharp upward move from 21 with a medium term target at 42.50.
                         On the other hand, 38 remains a key short-term focus. Breaking this resistance
                         will favour the case in which consolidation has already occurred, and will bring a
                         stronger increase to the aforementioned target. On the down side, short term
                         stop loss should be positioned below 34.80 while a longer one should be set
                         below 31.50.
                         Resistance levels:
                         *      37
                         ***   38
                         **    40
                         Support levels:
                         *      36
                         *** 34.80
                         **    34.25
                         Resistance/Support tables rank importance of levels from                                                               *,**, to *** (in order of
                         importance)

                         Figure 5 | Technical Analysis
                          Daily QAUTO.CA                                                                                                                                                                             2/16/2009 - 5/10/2010 (CCS)

                                Cndl, QA UTO.CA, Last Trade                                                                                                                                                                              Price
                                                                                                                                                                                       Target 42.50
                                5/4/2010, 35.98, 36.9, 35.5, 36                                                                                                                                                                          EGP
                                                                                                                                                                                                                                         39

                                                                                                                                                                                   Resis tance 38
                                                                                                                                                                                                                                         36
INITIATION OF COVERAGE




                                                                                                                                                                                      Support1 34.50
                                                                                                                                                                                                                                         33

                                                                                                                                                                                         Support2 32
                                                                                                                                                                                                                                         30
                                                                                                                                                        29.37

                                                                                                                                                                                                                                         27


                                                                                                                                                                                                                                         24


                                                                                                                                                                                                                                         21


                                                                                                                                                                                                                                         18


                                                                                                                                                                                                                                         .12

                                Vol, QA UTO.CA , Last Trade                                                                                                                                                                              V olume
                                                                                                                                                                                                                                         EGP
                                RSI, QA UTO.CA , Last Trade(Last), 14, Wilder Smoothing                                                                                                                                                  V alue
                                5/4/2010, 56.848                                                                                                                                                                                         EGP
                                                                                                                                                                                                                                         30
                                                                                                                                                                                                                                         .123

                                Stoc hS, QA UTO.CA , Last Trade, Stochastics -Slow %K 5, 3, Simple, 3                                                                                                                                    V alue
                                5/4/2010, 52.095                                                                                                                                                                                         EGP
                                Stoc hS, QA UTO.CA , Last Trade, Stochastics -Slow %D 5, 3, Simple, 3
                                5/4/2010, 36.221                                                                                                                                                                                         .123
                           16     02    16      01     16     01     18     01     16     02     16     03     17     01     16     01     16     02   16   01     16     01     18     01     16      01     16      01     16     03
                                       Mar 09        Apr 09        May 09        Jun 09        Jul 09        Aug 09        Sep 09        Oct 09    Nov 09        Dec 09        Jan 10        Feb 10         Mar 10         Apr 10




                         Source: CI Capital Technical Analysis Department



                                                                                                                                                                                                                                                   7

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                                                                                                                               EGYPT | AUTOMOTIVE

                                                                                                                                                     th
                                                                                                                                                10 May 2010
                         III. Company Profile & Management
                         A.Company Profile
                         GB Auto is a leading player in the Egyptian automotive industry. The company                             A strong family business
                         assembles and distributes passenger cars (PC) and commercial vehicles (CV),
                         manufactures semi-trailers and provides after-sales service through the largest
                         service centre network in Egypt and the Middle East. The company’s business
                         segments also sell automotive components, motorcycles & scooters and
                         construction equipment.
                         GB Auto was founded by Sadek and Kamal Ghabbour in 1940 as a family-run                                  A brief history
                         trading business. In 1956, the company was incorporated as The Ghabbour
                         Brothers, for the purpose of trading in automotive-related products and
                         construction materials (such as ceramic and cement) as well as home
                         appliances and electronics. In the early 1970s, the company started securing
                         agent licenses for passenger car, bus and automotive part distributors.
                         Figure 6 | Major Milestones
                            1940    A family-run trading business started by Mr.Sadek and Mr. Kamal Ghabbour.
                                    Officially incorporated as The Ghabbour Brothers.
                            1956
                                    The business include trading automotive-related products and construction materials.
                            1985    Started assembly of bus bodies under a technical agreement with Sweden-based bus manufacturer Scania
                                    Appointed by the South Korean- based car manufacturer "Huyndai Motors" as its exclusive agent distributor
                            1992
                                    of its passenger cars in Egypt.
                            1995    Granted a technical license by Hundai to assemble its passenger cars in Egypt.
                            1995    Became a local agent for the Indian- based manufacturer " Bajaj" for the distribution of two & three wheelers.
                                    Operate as the local agent for Mitsubishi truck and bus.
                            1997
                                    Became a local agent for Volvo truck and Volvo bus.
                                    Established and operate its passenger and cargo transportation service " Haram".
                            2006
                                    Consolidated its 10 subsidaries under one holding company, GB Capital.
                                    Renamed the group holding company to GB AUTO.
                            2007
                                    Raised EGP846mn in an IPO and institutional offering of shares at EGP37/share.
                                    Signed an agreement with the Brazilizn-based bus manufacturer " Marcopolo" to establish a local bus
                            2008
                                    assembly facility.
                            2009    Signed an agreement to establish a micro-finance business for two and three wheelers.
                            2009    Listed its GDR shares in London and New York stock exchanges.
                            2009    Signed an agreement with the Algerian-based company "SENTRAX" to distribute semi-trailers in Algeria.
                            2010    Entered a joint venture agreement with Al-Kasid Group to distribute the Huyndai vechicles across the Iraq
                            2010    Signed an exclusive agreement to import and distribute Mazda passenger cars in Egypt
                            2010    Signed an agreement to represent the Japanese tires Yokohama in Egypt
INITIATION OF COVERAGE




                         Source: GB Auto

                         On July 9th, 2007 GB Auto began trading its shares on the Egyptian Exchange                                   The IPO and capital increase.
                         (EGX) following the successful completion of its capital increase through an
                         IPO. The IPO was to offer between 31.2mn and 35.2mn shares in two tranches:
                         The first tranche: Representing 7.5mn shares, this tranche was offered for                                    First tranche offered for public
                         public subscription to individuals and institutions with a minimum of 150 shares                              subscription.
                         and a maximum of 60,000 shares per subscriber at a maximum price of EGP
                         39/share. This tranche was 4x covered at the price of EGP37/share, where 150
                         shares were allotted to each subscriber (a total of 1,832,550 shares). The
                         second allocation resulted in the distribution of 5,667,450 shares to subscribers
                         who had ordered more than 150 shares.




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                         The second tranche: The second tranche was offered to strategic investors in           10 May 2010
                         a private placement through the book-building process. This tranche was
                         divided into two parts:
                          The first consisted of a capital increase of a minimum 23.7mn shares and a      The second tranche offered
                             maximum of 27.7mn shares. 25.7mn shares were sold at a price of               for strategic investors
                             EGP37/share (7x oversubscribed).
                          The second part (1.7mn shares) was sold through a secondary offering in
                             which the company's existing shareholders sold some of their shares.
                         As a result, GB Auto’s paid-in capital increased from EGP95.8mn distributed
                         over 95.8mn shares to EGP129mn distributed over 129mn shares.

                         Figure 7 | Pre-offering shareholders’ structure

                                                       1.7%                  Dr. Raouf Ghabbour &
                                               10.4%
                                                                             immediate Family
                                       1.3%
                                      2.8%                                   Other family members


                                                                             Beltone Capital


                                                                             RGI Investment


                                                                             Others
                                                                 83.8%




                         Source: GB AUTO

                         Figure 8 | Post-Offering shareholders’ structure




                                       27.1%                                     Dr. Raouf Ghabbour &
                                                                                 immediate Family
                                                                                 Other family members


                                                                                 Beltone Capital
                                     1.1%
                                     2.3%
                                                                                 Free Float

                                                                    69.5%



                         Source: GB AUTO
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                                                                                                                                10 May 2010

                         Figure 9 | Pre and post-offering shareholders’ ownership
                                             Pre-offering shareholders' ownership                       Post-offering shareholders' ownership
                         Shareholder                               No. of Shares % of ownership      No. of Shares    % of ownership   % change
                         Dr.Raouf Ghabbour                          45,950,390        47.9%           47,921,695           37.1%         -10.8%
                         Mrs. Ola Lotfy Zaki                         8,583,610        9.0%            9,583,600            7.4%           -1.5%
                         Kamal Raouf Ghabbour                        8,583,610        9.0%            10,710,300           8.3%           -0.7%
                         Nadr Raouf Ghabbour                         8,583,610        9.0%            10,710,300           8.3%           -0.7%
                         Dina Raouf Ghabbour                         8,579,130        9.0%            10,710,300           8.3%           -0.6%
                         Dr. Raouf Ghabbour & Immediate Family      80,280,350        83.8%           89,636,195           69.5%         -14.3%
                         Maged Shaker Ghabbour                       1,791,315        1.9%            2,000,000            1.6%           -0.3%
                         Sherieen Shaker Ghabbour                     895,655         0.9%            1,000,000            0.8%           -0.2%
                         Total Ghabbour Family                      82,967,320        86.6%           92,636,195           71.8%         -14.8%
                         RGI Investment                              9,990,000        10.4%                0               0.0%          -10.4%
                         Soliman Abd Al-Mohsen Abnamy                1,236,095        1.3%            1,380,100            1.1%           -0.2%
                         Beltone Capital                             1,236,095        1.3%            1,380,100            1.1%           -0.2%
                         Reinie Riad Salama                           397,490         0.4%             443,800             0.3%           -0.1%
                         ITAMCO                                         6,000        0.006%                0               0.0%         -0.006%
                         Ghabbour Misr                                  3,000        0.003%                0               0.0%         -0.003%
                         Interland Motors                               1,000        0.001%                0               0.0%         -0.001%
                         Public Subscription                              0           0.0%            7,500,000            5.8%           5.8%
                         Private Subscription                             0           0.0%            25,659,805           19.9%         19.9%
                         Total                                      95,837,000        100%           129,000,000           100%
                         Source: GB Auto

                         B. Management
                         GB Auto’s management, headed by the Ghabbour family, has a strong track                      Management experience
                         record dating back to 1940. As Egypt began to embrace open-door economic
                         policies in the 1970s, GB Auto narrowed its focus to the automotive industry. At
                         present, the company’s management team is one of the most important factors
                         contributing to its performance as it has extensive knowledge and experience in
                         the business. The team is headed by Dr. Raouf Ghabbour, the group’s
                         Chairman, Managing Director and principal shareholder.
                         Dr. Raouf Ghabbour has been the Chief Executive officer and a director of GB
                         Auto since 1990. He and his family are the company’s main shareholders, they
                         own around c.70% of its capital.
                         At the time of the IPO GB Auto embarked on an modernisation process. For
                         most of FY09, GB Auto has focused on institutionalizing the businsess by
                         strengthening the management team and the corporte structure of the business.
                         By end of FY09, a new blueprint has been put into effect where a C suite senior              Modernising g the
                         management level has been formulated to include a Chief Operating Officers, a                business
                         Chief Financial Officer, a Chief Business Development Officer and a Chief
                         Human Resources Officer.
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                         Figure 10 | Organizational Structure                                                                                                                    10 May 2010
                                                                                                     Board of Directors
                                                Chief Internal Auditor
                                                                                              Chairman & Managing Director

                                                                    Projects Division                                                             Passenger Cars Advisor
                                       `
                                                                      Legal Counsel                                                                     Financial Advisor

                                                                                            Chief Manufacturing
                           COO – Financing      COO – Passenger            COO-                                                                                     Chief Business            Chief Human
                                                                                              & Supply Chain      Joint Ventures       Chief Financial Officer
                              Business             Vehicles                C-CAT                                                                                 Development Officer        Resources Officer
                                                                                                   Officer

                                                                                                                                                                         Business
                                 GB Lease         Hyundai Franchise       Volvo & Hyundai         Warehousing           GB Polo                   Finance                                       Administration
                                                                                                                                                                       Development

                                                                                                   Logistics &         GB Allab –
                             Consumer Finance      Mazda Franchise          Mitsubishi                                                       Treasury and Risk           Marketing             Human Resources
                                                                                                   Insurance           Remorque

                                                     Scooters &            Construction
                               Micro Finance                                                      Procurement      Ghabbour Al-Kasid        Investor Relations        Communications              Recruitment
                                                     Motorcycles            Equipment

                                                      Other Car                                     Vehicle
                                                                              Trailers                                                      Strategic Planning            Analysis                 Personnel
                                                      Franchises                                  Manufacturing

                                                                                                                                                Information                                       Training &
                                                      After Sales              Tires
                                                                                                                                                  Systems                                        Development


                                                                          Haram Transport                                                    Financial Control



                                                                            After Sales


                         Source: GB Auto

                         C. Corporate Structure
                         GB Auto operates through a number of subsidiaries. On January 27th, 2009, the                                                           Merged Subsidiaries
                         company’s management finalised a series of restructuring activities that merged
                         five subsidiaries into two. The restructuring took place over two phases which,
                         in addition to simplifying the group’s structure, re-valued its net fixed assets by
                         more than EGP500mn.

                         Phase I: Three companies merged into Ghabbour Egypt:
                          Engineering for Marketing and Trading (EMT)
                          Interland Motors
                          Vehicles Components Industries (VCI)

                         Phase II: Two companies merged into International Trade Agencies and
                         Marketing Corporation (ITAMCO):
                          Prima Engineering Industries (Prima)
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                          Cairo Individual Transport Industries (CITI)




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                         Figure 11 | GB Auto’s current corporate structure                                                                                                 10 May 2010


                                                                   GB Auto Holding Co.




                                                    ITAMCO                        RGI                  Almora
                                                     (9.2%)                     (100%)                 (100%)




                                                                                                                                          Haram Touristic       Master
                            ITAMCO             GBLease        GHabbour Egypt               GCT              Haram Transportation          Transportation                         Mashro'ey
                                                                                                                                                              Automotive
                            (84.1%)            (99.2%)           (87.9%)                  (0.5%)                   (98%)                      (90%)                                (90%)
                                                                                                                                                                 (75%)


                                                                                                                                   Haram Touristic
                                                                                                                                   Transportation
                                 GB Lease                            GCT                                                               (5.0%)
                                  (0.4%)                           (99.0%)


                                Ghabbour                            Haram
                               Egypt (11.7%)                    Transportation


                                   GCT                           GB Trailers
                                  (0.5%)                          (67.0%)


                                GB Trailer                         GB Polo
                                 (33.0%)                           (46.9%)


                                 GB Polo                          GB Lease
                                  (5.0%)                           (0.4%)


                                                                   Haram
                                                                  Touristic
                                                                Transportatio


                                                                   ITAMCO
                                                                    (6.1%)



                         Source: GB Auto

                         Figure 12 | GB Auto’s subsidiaries and their main business activities
                                               Company                                                       Business Activities                               Percentage of Ownership

                         RGI                                                 Holding Co. for consolidated subsidaries                                                             100.0%
                         Ghabbour Continental Trading (GCT)                  Distribution of PCs, mini-buses, spare parts and tires from Alex free Zone                           100.0%
                         Almora                                              A British Virgin Island, A Special Purpose Vechicle (SPV)                                            100.0%
                         GB Trailers                                         Manufacturing of trailers and semi-trailers                                                          100.0%
                         Haram Touristic Transportation                      Tourism transportation services                                                                      100.0%
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                         GB Lease                                            Conduct financial leasing activities                                                                 100.0%
                         Int'l Trade Agencies & Marketing (ITAMCO)           Sales and distribution of CBU and CKD passenger car units                                             99.5%
                                                                             Assembly of mini-buses and large coaches
                         Egyptian Vechicles Manufacturing Co.
                                                                             Operation of commercial vechicles after sale service networks and spare parts                         99.5%
                         (Ghabbour Egypt)
                                                                             Distribution of volvo construction equipment
                         Haram Transportation                                Operation of passenger and and cargo transportation services                                          99.0%
                         Microfinance Consultancy Services (Mashro'y) Conduct financial leasing activities for two and three wheelers                                              90.0%
                         Masters Automotive                                  Trading of Passenger cars                                                                             75.0%
                         GB Allab (Algerian company)                         Distributer of semi-trailers                                                                          51.0%
                         GB Polo Buses Manufacturing                         Manufacture and sale of bus and coach buse                                                            51.0%
                         Source: GB Auto




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                                                                                                                       10 May 2010
                         IV. Operational Summary
                         A. Capacity Expansion*

                         Since inception, GB Auto has expanded to become Egypt’s largest automotive            Increasing assembly and
                         assembler and distributor. The company is currently in the midst of                   manufacturing capacities
                         implementing expansion plans (begun in FY08) across all lines of business
                         (LoBs). The entire capex plan is set to be finalised by FY12. The capex plan for
                         the production facilities will be completed by FY10 and the after-sales network
                         in FY12. GB Auto committed around EGP1.1bn to its capex programme from
                         2008-2012, (EGP400mn of which was spent during 2008 and 2009) with the
                         remainder to be spent during 2010-2012. Upon completion of the capex plan:

                            The passenger car assembly line will increase its capacity from 30k units
                             p.a. to 90k p.a. by the end of 2Q10.
                            Bus capacity will increase from 1,200 units to 4,200 units (one shift) under
                             the GB Polo joint venture by FY10.
                            Trailer capacity increased from 1,200 units to 3,000 units (one shift) at the
                             end of FY09.
                            GB Auto will almost triple its after sale service network by FY12 to 35
                             centres (25 for PCs and 10 CVs) up from the current 12 (6 for PCs and 6 for
                             CVs).

                             * Please refer to page 26 for planned capacities.

                         B. Business Segments
                         Passenger cars (PC): The passenger car segment has been the main driver of
                         GB Auto’s success. The company is the sole local importer and assembler of
                         South Korean Hyundai passenger cars. In late FY09, the company obtained the
                         right to represent Mazda vehicles, and sales are to commence in mid-FY10.
                         GB Auto passenger car sales are currently supported by the largest after-sales        GB Auto owns the largest
                         service and spare-part networks in Egypt, servicing an average of 650-700             after sale service network in
                         vehicles/day day. There are currently six service centres, three of which are so-     Egypt
                         called “3S” facilities (showroom, service centre and spare-parts) in Greater
                         Cairo, Alexandria and Sharm El-Sheikh. The passenger cars segment is
                         supported by a network of around 38 large automotive dealers throughout
                         Egypt, which enables GB Auto to appeal to a wide customer base. In FY09, GB
                         Auto sold 41,646 Hyundai passenger cars (66% CBU and 34% CKD), around
                         40% of which through its own retail showrooms and the remainder through its
                         sub-dealers.
                         The passenger cars line of business contributed EGP2.9bn (including PCs’              Passenger cars sales account
                         after-sale service revenues of EGP159mn), or c.68% (64.2% sales and 3.7%              for 68% of GB Auto’s total
                         after-sales) of GB Auto’s consolidated revenues in FY09.                              revenue
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                         Currently, the company is authorised to assemble two Hyundai PC models
                         (Verna and Sonata), and plans to negotiate approval to assemble additional
                         models.




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                         Figure 13 | PCs historical sales volumes and market share (2004-2009)                              10 May 2010

                                                          PCs                      Market Share %
                             60,000                                                                           30.0%
                                                                    27.3%     27.1%
                                                                                             25.9%   26.2%
                             50,000               26.9%                                                       25.0%


                             40,000                                                                           20.0%


                             30,000   12.1%                                                                   15.0%


                             20,000                                                                           10.0%


                             10,000                                                                           5.0%

                                       6,704     25,458         36,388      48,623          51,518   41,646
                                  0                                                                           0.0%
                                       2004      2005           2006        2007             2008    2009

                         Source: GB Auto

                         Commercial Vehicles (CV): Under the commercial vehicle line of business, GB
                         Auto distributes both imported and locally assembles buses and trucks. The
                         company assembles Mitsubishi, Volvo, Hyundai buses and Mitsubishi trucks.
                         GB Auto also manufactures and distributes semi trailers and superstructures.
                         The CV LoB achieved sales of EGP586mn, or 13.8% (12.3% sales and 1.5%
                         after-sales) of GB Auto’s consolidated revenues in FY09. The bus segment
                         primarily targets Egypt’s tourism sector. GB Auto’s bus line is Egypt’s largest
                         supplier, with a market share of around 32% in FY09. The truck segment mostly
                         targets the construction and hauling industries. In FY09, GB auto sold 792
                         buses and 1874 different types of trucks.

                                A. Buses: The bus segment includes three main categories: large buses
                                   or coaches (maxi-buses that carry up to 50 passengers), midi-buses
                                   (carry between 23 and 33 passengers) and mini-buses (seat up to 29
                                   passengers - mainly used by inter/intra-city passenger transportation
                                   networks, academic institutions, private companies and tourism). GB
                                   Auto currently imports bus chasses and engines from Mitsubishi, Volvo
                                   and Hyundai and manufactures the bus bodies at its facilities. It
                                   sources many of the body components locally. GB Auto has the
                                   capacity to manufacture 2400 buses p.a., expected to reach 4200 units
                                   (one shift) p.a. by end of 2Q10.
                                B. Trucks: GB Auto offers a wide range of heavy, medium and light-weight
                                    trucks under licenses from leading international suppliers Mitsubishi
                                    and Volvo. GB Auto assembles Mitsubishi trucks at its plants in Sadat
                                    City and imports Volvo heavy trucks. GB Auto also manufactures and
                                    distributes semi-trailers and super-structures such as oil tankers,
                                    chemical tankers and concrete mixers under its commercial vehicle
                                    line. These trucks have a number of uses:

                             FUSO Trucks from Mitsubishi: produce light and medium trucks used
                              mainly for food, beverage and industrial transportation purposes.
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                             Volvo Trucks: produce heavy trucks used primarily for long haul and
                              construction purposes, able to transport 18 to 150 tons gross vehicle weight.
                         In FY09, GB Auto manufactured and sold 1874 different types of trucks (1,228
                         trucks and 646 trailers and superstructures). The company currently has the
                         capacity to manufacture 4750 (one shift only) trucks p.a.
                         Most of the commercial vehicles are manufactured through the job-order
                         process due to their highly customized nature. GB Auto has six after-sale
                         service centres for commercial vehicles, in Qaluib, Abou Sembel, Alexandria,
                         Hurghada, Sharm El-Sheikh and Luxor, which serve around 80 units/day.




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                         Figure 14 | Buses historical sales volumes                                                              10 May 2010


                                                             Buses                  Market share %
                                    2,000                                                                   34%
                                                                           33.2%                32.3%       33%
                                    1,500
                                                     31.0%                                                  32%
                                                                                   30.3%
                                    1,000                                                                   31%
                                                                                                            30%
                                      500
                                                    1,109          1,651          1,319         792         29%
                                         0                                                                  28%
                                                    2006           2007           2008          2009

                         Market share is calculated excluding Micro-Buses
                         Source: GB Auto

                         Figure 15 | Trucks (all types) historical sales & market share (2006-2009)
                         volumes & market share (2006-2009)

                            Units               Trucks              Trailers & Superstructure      Market share %
                           1,600                                                                                     30%
                           1,400                                                                                     25%
                                                            19.7%                      28.0%
                           1,200      17.4%
                           1,000                                                                                     20%
                                                                                                             17.4%
                             800                                                                                     15%
                             600                                                                                     10%
                             400
                             200                                                                                     5%
                                       694    111            966     227           1,397 625           1,228 646
                               0                                                                                     0%
                                         2006                 2007                    2008               2009

                         Market share is calculated excluding Pick-ups
                         Source: GB Auto

                         Two and Three-Wheel Vehicles (Motorcycles, Scooters and Three-
                         Wheelers): GB Auto is the exclusive agent and distributor for the Indian
                         company Bajaj Auto Limited. Its products include Boxer motorcycles, two-
                         wheel scooters and three-wheel vehicles, often called auto-rickshaws or tuk-
                         tuks.
                         Bajaj vehicles are imported as SKD (semi-knocked down) units and are
                         assembled and finished locally at GB Auto facilities located in Sixth of October
                         City Industrial Zone.
                         GB Auto introduced affordable three-wheel vehicles to the Egyptian market in
                         1995, and today its prime-mover advantage helps it maintain a 99% market
                         share of the country’s tuk-tuk sales. Tuk-tuks are used mainly in rural and low-
                         income areas for personal and commercial purposes as an alternative to
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                         common urban and peri-urban transport methods. Tuk-tuks feature relatively
                         low up-front cost, minimal fuel consumption and a manoeuvrability advantage
                         useful in close-quarter urban environments.
                         The two and three wheelers are served through a nationwide network of three
                         retail showrooms and after-sales service centres, in addition to eight spare parts
                         outlets and numerous local dealers.
                         In FY09, GB Auto sold 42,592 tuk-tuks and 5,286 other motorcycles and
                         scooters. The two and three wheelers LoB contributed EGP598mn (EGP581mn
                         sales and EGP16mn after-sale services) or 14.1% (13.7% from sales and 0.4%
                         after-sale services) of the company’s total FY09 consolidated revenues.




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                         Other lines of businesses: GB Auto operates other lines of business including                                      10 May 2010
                         tires, construction equipment and transportation services.
                              A. Tires: GB Auto has been among Egypt’s leading tire dealers for more
                                 than fifty years. Currently, the company distributes passenger and
                                 light-truck tires under the Turkish-made Lassa brand, producing the
                                 tires under a joint venture with Bridgestone and Sabanci Group. GB
                                 Auto offers a range of 40 different tire sizes under a license from
                                 Lassa.
                                     In 2006, GB Auto began distributing Chinese Double Coin tires, which
                                     were sold on a wholesale basis to retail dealers (including tender and
                                     fleet sales). In 2008, the Government of Egypt (GoE) imposed anti-
                                     dumping duties against China, at which point it became prohibitively
                                     expensive for GB Auto to continue distributing the Double Coin tires.
                                     The company is now actively exploring other potential partnerships
                                     with major global brands, particularly in the passenger car segment.
                                     The tire line of business contributed EGP62.7mn (1.5%) of GB Auto
                                     total consolidated revenues in FY09.
                                     The main competitors to GB Auto’s passenger car tires include GT,                              GB Auto tires competitors
                                     Goodyear, Bridgestone, Pirelli and low-cost Chinese and Korean
                                     brands. Pharos tires manufactured in Egypt are the main competitors
                                     to GB Auto’s truck, bus and off-road tires.
                              B. Construction equipment: GB Auto distributes construction
                                 equipment, including trucks, earth movers and material handling
                                 equipment under license from Volvo Construction.
                                     GB Auto has distributed Volvo construction equipment since 1997.
                              C. Transportation services: GB Auto provides cargo freight
                                 transportation services for heavy industry (as part of an emerging
                                 professional logistics service practice) by providing truck rentals on a
                                 fixed-contract basis. Moreover, GB Auto provides passenger
                                 transportation services through its 99% owned subsidary Haram
                                 Transportation Company, which was established in January 2006
                                 under an agreement with the Egyptian Public Transportation
                                 Authority.
                                     At the beginning of FY09, Haram transport operated more than 60 intra
                                     and inter-urban passenger transport routes in Alexandria,
                                     Daqahliyah, Damietta, Suhag and Qena, using a fleet of more than
                                     250 vehicles. As of FY10, GB Auto has since withdrawn from all the
                                     routes with the exception of Alexandria.
                              D. Financing Businesses: These other miscellaneous activities
                                 contributed EGP6mn or 0.1% in FY09 (mainly from the leasing
                                 activities) of GB Auto’s total consolidated revenues.
                         Figure 16 | Other lines of business (LoBs)
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                            EGP mn                 2006           2007             2008              2009
                           120.0

                           100.0

                            80.0

                            60.0

                            40.0

                            20.0

                             0.0
                                          Tires       Construction Equipm ent   Transportation Services     Financing businesses

                         Source: Company reports

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                         Figure 17 | Contributions to total revenues of other LoBs by segment                           10 May 2010

                                    Tires/Other LoBs                        Construction Equipment / Other LoBs
                                    Transportation services / Other LoBs    Financing businesses /Others LoBs
                           100%
                           90%
                           80%
                           70%
                           60%
                           50%
                           40%
                           30%
                           20%
                           10%
                            0%
                                       2006                          2007      2008                        2009


                         Source: Company reports
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                                                                                                                          th
                                                                                                                        10 May 2010
                         V. Financial Analysis & Forecasts
                         Major Lines of Business
                         Passenger Cars (PCs)

                         A. Financial Summary
                         GB Auto’ passenger car segment benefited from the Egyptian government both
                         streamlining and reducing customs tariffs at the end of 2004. Passenger cars
                         sales volume grew at a CAGR of 44.1% from 2004-2009, compared to a total
                         market sales volume CAGR of 23.5% during the same period.
                         Sales: The PC line of business is the largest contributor to GB Auto’s
                         consolidated revenues, contributing c.72% on average from 2004-2009.
                         Completely built-up units (CBU) consituted an average 52% of total sales
                         volume from 2004-2009, while completely knocked-down units (CKD)
                         assembled locally in GB Auto facilities accounted made up the remaining 48%.
                         In FY09: Total revenues of the PCs line of business fell 22% year-on-year (YoY)
                         to EGP2.7bn on the back of a 19% YoY decline in total sales volume to 41,646
                         units in FY09 (vs. 51,518 units sold in FY08). Concerns regarding rising
                         inflation, a difficult credit market, loss of wealth from the decline in stock market,
                         consumer expectations of a decline in prices and the overall fall in business
                         spending were key causes of the decline in passenger car sales during FY09.
                         Market share: GB Auto’s passenger car market share increased by 14%, from
                         12% in FY04 to 26.2% in FY09 (a slight improvement on 25.9% in FY08).
                         Average selling price: Passenger cars’ average selling price declined 4% YoY
                         to reach EGP65.7k/unit in FY09 (vs. EGP68.2k/unit a year earlier). This
                         occurred amidst pressure from the market early in the year, which forced GB
                         Auto to reduce prices to combat similar moves by its competitors.
                         After-sale revenues: After-sale PC revenues declined marginally YoY to
                         EGP159mn in FY09, vs. EGP162mn a year ago.
                         Gross profit margin: Gross profit margin contracted 5% YoY to 12% in FY09
                         (including the contribution from after-sale services), vs. 17% a year ago. This
                         decline was a result of both the reduction in average selling prices and
                         incentives through which GB Auto helped its dealers to reduce the overstock
                         that had become common between November 2008 and March 2009.
                         Meanwhile, lower-margin sales to the national taxi replacement program in
                         4Q09 stood at 1,701 units, bringing GB Auto’s total contribution to the program
                         to 4,584 units for FY09.
                         On a quarterly basis: In 4Q09, GB Auto PCs units sold climbed 70.7% to
                         reach 12,492 units (vs. 7,320 a year ago) as the Egyptian auto market began to
                         move out of the economic downturn. The average selling price dropped by 9%
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                         in 4Q09 to EGP64.1k/unit (vs. EGP70.5k/unit in 4Q08). The decline was
                         primarily the result of significant reductions in the selling prices of Elantra,
                         Matrix and Accent models compared to 4Q08, which GB Auto undertook in
                         order to remain competitive. Gross profit margin improved 2% YoY to reach
                         12.5% in 4Q09 (vs. 10.9% in 4Q08).
                         Furthermore, GB Auto’s PC sales during 4Q09 have been a reflection of the
                         overal marke performance. Total passenger car sales grew YoY by 28.6% in
                         4Q09 to reach 46,601 units (vs. 36,248 units in 4Q08).




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                         B. PCs Projection assumptions (2010-2014)                                                         10 May 2010

                         Our forecasts for GB Auto’s PC sales are mainly volume driven. In order to
                         maintain its leading market share in the face of growing market competition, we
                         believe GB Auto will not be able to significantly increase its selling prices. The
                         group’s selling prices are a function of several factors including: (i) FX
                         movements (including the US dollar and the Japanese Yen) (ii) significant
                         changes in custom duties (iii) competitors’ selling prices, and (iv) sales mix.
                         We expect total market sales to increase by 20% YoY in FY10 to reach 190,488
                         units (vs. 158,926 units) in FY09 (to rebound beyond 2008 sales by 2011e as a
                         result of an expected recovery in the macro economy). Our projections for GB
                         Auto’s passenger car segment are explained below.
                         Hyundai
                         Sales volumes: Demand for passenger cars will be stimulated by Egypt’s
                         rapidly growing population, and more precisely, the increasingly large 15-44 age
                         bracket, which currently represents 46% of the total population. Limited
                         provisions for public transport, the taxi replacement program and the scrapping
                         scheme are also factors that will underpin demand for passenger cars over the
                         next five years. Total market PC sales are expected to grow by a CAGR of 14%
                         during 2010-2014. On a segmental basis, we believe CBU will continue to
                         dominate PC sales. Although the 1M2020 strategy aims to raise Egypt’s
                         production share of the locally manufactured vehicles by encouraging higher
                         volumes of vehicle production, the Ministry of Trade and Industry has yet to
                         allocate a financing scheme. GB Auto PC sales are expected to grow by a
                         CAGR of 12.9% over the forecasted period. During 2010 we expect Hyundai
                         sales to reach 53,337 units (66% CBU and 34% CKD) – a more conservative
                         estimate than mangement’s expectations of 55,000 units.

                         Market share: We believe GB Auto’s Hundai PCs market share will increase
                         2% to 28% in FY10 (vs. 26.2% in FY09) as a result of both the anticipated
                         recovery in the Egyptian automotive market and the ongoing taxi replacement
                         program. In FY11, we estimate the Huyndai PCs market share will increase to
                         29% following the introduction of the new Huyndai models (as per
                         management’s expectations).
                         Starting in FY12, we estimate the Hundai PCs’ market share to fall slightly to
                         27% in FY14 following the growing impact of the 10% annual reduction in import
                         tariffs for European vehicles mandated by the Egypt-EU Free Trade agreement,
                         which came into effect in January 2010.
                         Figure 18 |Forecasted market and GB Auto sales volumes (2010-2014)

                            Units                      Market PC sales                GB Auto PC sales

                              350000
                                                                                                         320969

                              300000                                                     291790
INITIATION OF COVERAGE




                                                                         262874

                              250000
                                                     228586


                              200000    190488



                              150000



                              100000                                                                         86661
                                                                              74919             80242
                                                          66289
                                             53336
                               50000



                                    0
                                           2010         2011                2012             2013           2014


                         Source: CICR estimates
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                         Average selling price: We do not believe GB Auto will be able to significantly              10 May 2010
                         increase its average selling prices if it intends maintain its leading market share
                         and the means to strengthen it. Furthermore, the growing presence of low-
                         priced Chinese brand vehicles and increasing competition from other
                         competitively-priced vehicles will likely act as a barrier to any signifcant price
                         increase. In the long run, we believe the the Egypt-EU Free Trade Agreement
                         could also be a potential barrier to price increases, unless GB Auto succeeds in
                         importing vehicles from Hyundai facilities in Europe. We expect average selling
                         prices for Huyndai passenger cars to grow at a fixed rate of 2% from 2010 to
                         2012 and from then on to grow at a gradually decelerating rate.
                         Gross profit margin (GPM): We estimate Huyndai PCs to show a gross profit
                         margin of 12.5% in FY10 (in line with management expectations), implying a
                         2.2% increase YoY (vs. a 10.3% increase in FY09).
                         Sales mix: We maintain the CKD and CBU sales mix as in FY09, 34% for the
                         former and 66% for the latter.
                         Mazda
                         Sales volumes: Starting in FY10, we expect GB Auto to sell around 1,429
                         units, controlling a market share of 0.8%. We expect this market share to
                         increase to 1.5% in FY12. Following FY12, we do not believe that GB Auto will
                         be able to increase the Mazda PCs’ market chare more than 1.5% due to
                         intense competition from the European brands.
                         Average selling price: We forecast Mazda PCs’ average selling price will
                         reach EGP125k/unit in FY10 (more conservative than management guidance’s
                         of EGP130k/unit).
                         Gross profit margin: We expect Mazda PCs’ GPM to be 10% going forward (in
                         line with management expectations).
                         The new Iraq venture
                         In brief: On February 4th, 2010, GB Auto announced it had entered into a joint
                         venture agreement with Al-Kasid Group (which has exclusive rights to distribute
                         Hyundai Motor Company (HMC) products in Iraq) to distribute Hyundai vehicles
                         across the Iraqi market. This new venture will be established in Al-Aqaba (a
                         Jordanian free-zone area) under the name of Ghabbour Al-Kasid Company.
                         The equity of this venture is USD80mn. GB Auto holds a 50% stake, for which it
                         paid USD55mn.
                         According to GB Auto, Ghabbour Al-Kasid’s head office will be located in Arbil
                         (in northern Iraq). Al-Kasid’s existing facilities include 3S centers located in:

                            Arbil: 3 working bays, in addition to a mobile service, to expand to 30
                             working bays, a spare-parts warehouse as well as an outlet and showroom
                             expected to be operating in 2H10.
                            Baghdad: 12 working bays, in addition to a mobile service, to expand to 45
                             working bays, a spare-parts warehouse and an outlet as well as a showroom
                             to be functioning in 2011.
INITIATION OF COVERAGE




                            Basra: 3 working bays, in addition to a mobile service.
                         Five authorised 3-S facilities will be assigned to cover major cities in 2010, as
                         well as 5 spare-parts outlets that will be opening in 2010 (with another five to be
                         added in 2011).




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                         Figure 19 | Annotated Map of Iraq                                                                            10 May 2010




                                                                                                Arbil: 3 Working bays
                                                                                                and a mobile service.


                                                                                                Baghdad: 12 working
                                                                                                bays and a mobile
                                                                                                service.


                                                                                                Al-Basrah: 3 working
                                                                                                bays and a mobile
                                                                                                service.


                         Source: www. umsl.edu

                         Within this joint venture, GB Auto has a full management control over the
                         operation (including operating and financial policies) and the right to appoint
                         three board members (including the chairman).
                         Projections
                         Sales volumes: GB Auto forecasts that the total Iraqi market sales in FY10
                         could reach 120-150k units, of which GB Auto will sell around 36k units p.a. We
                         have kept our estimates more conservative than mangement’s guidance (due to
                         the lack of information in Iraq). We estimate the total Iraqi market sales volume
                         to be 100k units in FY10 and grow to 130k by FY14. For GB Auto, we estimate
                         sales to be around 22,500 units in FY10 increasing to reach 39,000 units in
                         FY14. We believe the company’s market share will increase from 22.5% in
                         FY10 to 30% in FY11.
                         Average selling prices: We have assigned an average selling price of
                         EGP81k/unit in FY10 and reach its peak in FY12 at EGP82.5k/unit.
                         Gross profit margin: We estimate a GPM of 7% in FY10, to remain flat at 10%
                         going forward.

                         Figure 20 | PCs sales volumes projections (2010-2014)

                           Units ( 000)          Hyundai (Egypt)          Mazda (Egypt)   Hyundai (Iraq)          Growth Rate
                           140                   85.5%                                                                 90.0%

                                                                                                                       80.0%
                           120
                                                                                                             39        70.0%
                                                                                            38
INITIATION OF COVERAGE




                           100
                                                                                  36
                                                                                                                       60.0%
                                                                   36                                        5
                                                                                            4
                            80                                                    4                                    50.0%
                                                  23               3
                            60                                                                                         40.0%
                                                                        36.2%
                                                  1
                                                                                                             87        30.0%
                            40                                                              83
                                                                                  75
                                                                   66                                                  20.0%
                                                  53                                        8.9%
                                          42                                      9.2%
                            20
                                                                                                              4.4%     10.0%

                             0                                                                                         0.0%
                                     2009 A    2010 P         2011 P            2012 P    2013 P           2014 P

                         Source: GB Auto and CICR estimates




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                                                                                                                     10 May 2010
                         Commercial Vehicles (CVs)

                         A. Financial Summary
                         During FY09, total CVs revenue (including after-sale service) fell by 23% YoY to
                         EGP586mn (vs. EGP762mn in FY08). The drop in revenue was driven by the
                         weakening job market, a rise in unemployment and an overall change in
                         construction, agriculture and tourism activities.
                         Buses: Bus sales volume declined 40% YoY to 792 units in FY09 (vs. 1,319
                         units in FY08). The significant drop in sales was further exacerbated by GB
                         Auto’s relocation of its bus assembly facilities to GB Polo (in Suez) from
                         Qaliyoub during the second half of FY09.
                         Trucks: Trucks sales units slid 12% YoY to 1,228 units in FY09 (vs. 1,397 in
                         FY08). Volvo trucks are expensive, and are generally acquired by corporate
                         clients and through government tenders, both of which decreased sharply in
                         FY09. The Hyundai heavy truck market was hit hard by declines in container,
                         food and beverage transport activities.
                         Trailers (including superstructure): This segment reported a 3.4% YoY
                         increase, with total sales units reaching 646 units in FY09 (vs. 625 units in
                         FY08). This was driven by government legislation requiring the replacement of
                         trucks’ drawbars. GB Auto’s expansion in Algeria through GB-Allab also offered
                         compensation for some lost sales.
                         Average selling price: CVs average selling price exhibited a 7.3% YoY decline
                         to EGP195.8k/unit in FY09 (vs. EGP211.1k/unit in FY08).
                         Gross profit margin: CVs GPM fell 3% YoY to 14% in FY09 (vs. 17% in FY08).
                         On a quarterly basis: In 4Q09, GB Auto CVs total units sold increased by 63%
                         to 870 units in 4Q09 (vs. 534 in 4Q08) as a result of corporate clients’ activities
                         returning to their usual levels. Moreover, growing tourism activities fueled
                         demand for buse sales. Bus sales rose in 4Q09 to reach 246 units in 4Q09 (vs.
                         31 units in 4Q08), an important indicator of a recovering sentiment in the sector.
                          B. CVs projection assumptions (2010-2014):
                         Our estimated for the commercial vehicle LoB are also volume driven. Starting
                         FY10 the commercial vehicles brands will only include Mitsubshi and Volvo as
                         the company considers its position for both manufacturing and distributing
                         Hyundai commercial models. We believe this decision will allow GB Auto to
                         focus its efforts on the Hyundai passenger cars segment, as GB Auto currently
                         targets a limited segment of commercial vehicles, excluding micro-buses and
                         pick-up trucks.
                         Our commercial vehicles forecasts are as follows:
                         Buses: Given the prevailing problem of inefficient public transport (particularly
                         in the newly urban areas), implementation of the private bus scrapping and
                         replacement program (estimated to be at least 64,000 units), and a growing
INITIATION OF COVERAGE




                         tourism industry, we expect the total bus sales market to grow by a CAGR of
                         16% over over 5-year forecast period (2010-2014).
                         We project GB Auto total sales units will follow suit and grow by a 5-year CAGR
                         of 33% from 2010-2014, further driven by GB Auto’s joint venture with the
                         Brazil-based company Marco Polo. GB Auto will benefit from lower
                         manufacturing costs, penetrating Marco Polo’s markets with a comparative cost
                         advantage.




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                         Figure 21 |Forecasted market and GB Auto sales volume (2010-2014)                                                          10 May 2010

                          Units                            Market bus sales                  GB Auto bus sales

                              35000



                              30000                                                                               29227

                                                                                                 26330

                              25000
                                                                              22896


                              20000                      19569


                                         16173
                              15000



                              10000



                                  5000                                                                   3423             3799
                                                                 2348                 2862
                                                 1213

                                    0
                                            2010            2011                2012                 2013            2014




                         Source: CICR estimates

                         Trucks: Owing to the EGP8bn government stimulus package allocated for
                         2010, growing numbers of infrastructure projects and construction investments
                         will drive growth in truck sales. Construction sector spending is expected to
                         grow by a CAGR of 16% (totalling EGP34.5bn) over the next five years,
                         accompanied by a 12.7% CAGR for total trucks sales.
                         We expect GB Auto trucks sales volumes to follow suit, growing by a CAGR of
                         12% from 2010-2014.
                         Trailers and superstructures: We based our forecasts for the trailers and
                         superstructure segment as a percentage of the truck market. We expect the
                         company’s total trailers and superstructures volumes to grow by a CAGR of
                         13% from 2010-2014. In 2010, we expect sales to grow YoY by 72.7% to reach
                         1,115 units (supported by the trailer exports to Algeria through the GB-Allab
                         joint venture).
                         Average selling price: We forecast the total commercial vechicles average
                         selling price to increase by 2% YoY to reach EGP199.7k/unit in FY10 (vs.
                         EGP195.8k/unit the previous year). Starting from FY11 we assume the average
                         selling price will increase at a constant growth rate of 1%.
                         Gross profit margin: Going forward, we maintain a GPM of 29% (representing
                         the average of FY08 and FY09) in line with the company’s expectations.
                         Figure 22 | Forecasted CVs sales volumes (2010-2014)

                                                        Buses                 Trucks                  Trailers and Superstructures
                           Units
                           4,000
                            3,500
INITIATION OF COVERAGE




                            3,000
                            2,500
                            2,000
                            1,500
                            1,000
                              500
                                     0
                                            2009 A          2010 P               2011 P                2012 P         2013 P         2014 P


                         Source: CICR estimates. Market forecasted sales exclude Pickups as GB Auto does not
                         sell pickups.




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                                                                                                                               10 May 2010
                         Two and Three-Wheel Vehicles

                         A. Financial Summary
                         The two and three wheelers sales volume grew YoY by 11% to 47,878 units in
                         FY09 (11% two-wheelers and 89% three-wheelers) vs. 43,251 units in FY08
                         (15% two-wheel and 85% three-wheel). Three-wheel sales grew by 16.3% YoY
                         on the back of mid-2008 traffic law amendements that outlined procedures for
                         three-wheel vehicle licensing.
                         Sales value increased YoY by 4% to EGP581mn in FY09 (vs. EGP558mn in
                         FY08), while after-sales service value grew YoY by 22.4% to EGP16mn in FY09
                         (vs. EGP13mn in FY08).
                         Margins improved in FY09 on the back of the reductions in customs tariffs
                         imposed on these products from 40% to 10%. Most of that reduction was
                         passed on to the end customers, with some retained by the company.
                         B.Two and three-wheel vehicle projection assumptions (2010-2014)
                         Sales volume: We expect two-wheel sales volume to grow YoY by 3% to 5,445
                         units in FY10 (vs. 5,286 units a year ago). Moreover, we expect three-wheel
                         (tuk-tuk) sales volume to increase YoY by 24% in FY10 to 52,814 units
                         (compared to 42,592 units in FY09), supported by the new Mashro’ey
                         microfinance project. Mashro’ey was established in 4Q09 and should
                         commence operations by 2Q10. Starting from FY11, we expect three-wheel
                         sales volume to increase by 12%.
                         Average selling price: We maintain the average selling price for the two and
                         three-wheel segment at EGP12k/unit in FY10 (as it was in FY09). Starting in
                         FY11, we expect the average selling price to decrease slightly on the back of
                         the reduction in custom tariffs on these products.
                         Figure 23 | Two and Three-wheeler sales volume projections (2010-2014)
                            Units (000)                       Two wheelers                Three wheelers
                           90                                                                                     83.1
                           80                                                                        74.2
                           70                                                      66.2
                                                                      59.2
                           60
                                                       52.8
                           50
                                          42.6
                           40

                           30

                           20

                           10      5.3           5.4            5.6          5.8               5.9          6.1

                            0
                                    2009 A       2010 P          2011 P      2012 P            2013 P       2014 P
INITIATION OF COVERAGE




                         Source: GB Auto and CICR estimates

                         Other Lines of Business
                         Tires: Tire sales revenue declined YoY by 17% to EG62.7mn in FY09 (vs.
                         EGP75.1mn in FY08) as a result of halting the distribution of Double Coin tires
                         following the GoE’s imposition of anti-dumping duties on Chinese products.
                         We estimate tire sales revenues will grow by 150% in FY10 to EGP156.8mn (a
                         more conservative estimate than management’s expectations of EGP180mn)
                         driven by the sale of Yokohama tires, which GB Auto has begun dsitributing.
                         Construction equipment: The construction equipment segment showed a
                         22.5% YoY increase in sales revenue. Moreover, its after-sales service reported
                         a 3.5% YoY increase to EGP6mn in FY09.
                         We expect construction equipment sales revenues to grow by 10% YoY to
                         reach EGP58.9mn in FY10, and after-sales service to grow by 11% to
                         EGP6.5mn.                                                                                              24

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                         Transportation Services                                                                                                         10 May 2010

                         The cargo transportation segment: reported a 11% YoY increase in sales
                         revenues to EGP27.4mn in FY09 (vs. EGP24.6mn in FY08). We forecast this
                         segment to grow by 11% YoY to reach EGP30.4mn.
                         The passenger transportation segment: This segment’s revenues declined
                         16.2% YoY to EGP26.3mn in FY09 (vs. EGP31.4mn a year ago). The decline in
                         revenues mainly resulted from challenges inherent in working with municipal
                         authorities to operate inter and intra-urban bus transportation lines, although the
                         Ministry of Transportation does support this segment.
                         We forecast this LoBs revenue to grow by 3% YoY in FY10 to EGP27.1mn.
                         Starting in FY11 we have assigned a 2% fixed-rate increase to its revenues on
                         the back of the discontinued services on its non-performing lines. Following the
                         elimination of the non-performing lines, the business will target clients seeking
                         fixed contract services.
                         Financing Business (Leasing): This line of business finances commercial
                         vehicle sales as well as corporate clients’ fleet-oriented passenger car
                         purchases. As of December 31st, 2009, GB Lease had an outstanding loan
                         book of EGP37.2mn. Its sales revenues increased 103% YoY, reaching
                         EGP6mn in FY09 from EGP3mn a year ago.
                         We have a positive outlook for this segment and expect its sales revenues to
                         grow by 103% YoY (in line with mangement’s expectations) to reach
                         EGP12.4mn in FY10.
                         (See following page for chart.)

                         Figure 24 | Other lines of business sales revenues projections (2010-2014)
                                               Tires                                   Construction Equipm ent*     Cargo Transportation Service
                             EGP mn            Passenger Transportation Service        Finance Business (Leasing)
                           600




                           500




                           400




                           300




                           200




                           100




                             0
                                      2009 A             2010 P                   2011 P               2012 P       2013 P                2014 P

                         * Including after-sales service
INITIATION OF COVERAGE




                         Source: GB Auto and CICR estimates




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                         Figure 25 | Forecasted sales breakdown                                                              10 May 2010

                                                                       Passenger cars (PCs)
                                                                     2008 A    2009 A     2010 P     2011 P    2012 P    2013 P        2014 P
                         Egyptian Market sales volume               198,800   158,926    190,488     228,586   262,874   291,791       320,970
                         GB Auto (Hyundai sales in Egypt)
                         Assembling capacity                        30,000     30,000    90,000      90,000    90,000    90,000        90,000
                         Sales volume in Egypt                      51,518     41,646    53,337      66,290    74,919    80,243        86,662
                         Market share (%)                            25.9%      26.2%     28.0%       29.0%     28.5%     27.5%         27.0%
                         Average selling price/ unit (EGP 000)        68         66           67       68        70        70            71
                         Total revenue (EGP mn)                      3,514      2,734     3,572       4,528     5,219     5,646         6,128
                         Gross profit margin (%)                     15.5%      10.3%     12.5%       12.3%     12.0%     12.0%         12.0%
                         GB Auto (Mazda)
                         Sales volume                                 NA         NA       1,429       2,926     3,943     4,377         4,815
                         Market share (%)                             NA         NA           0.8%    1.3%      1.5%      1.5%          1.5%
                         Average selling price (EGP000)               NA         NA           125     128       132       133           133
                         Total revenues (EGP mn)                      NA         NA           179     375       520       580           640
                         Gross profit margin (%)                      NA         NA       10.0%       10.0%     10.0%     10.0%         10.0%
                         GB Auto (Hyundai sales in Iraq):
                         Iraq Market sales volume                     NA         NA      100,000     120,000   120,000   125,000       130,000
                         GB Auto Sales volume                         NA         NA      22,500      36,000    36,000    37,500        39,000
                         Market share (%)                             NA         NA       22.5%       30.0%     30.0%     30.0%         30.0%
                         Average selling price (EGP000)               NA         NA           81       82        83        82            82
                         Total revenues (EGP mn)                      NA         NA       1,823       2,952     2,970     3,075         3,179
                         Gross profit margin (%)                      NA         NA           7.0%    10.0%     10.0%     10.0%         10.0%
                         After-sale service:

                         Sales revenue (EGPmn)                        162       159           196     256       299       325           353
                         Gross profit Margin (%)                     41.9%      41.7%     41.8%       42.0%     42.0%     42.0%         42.0%
                         Total PCs revenue (EGPmn)                   3,675      2,893     5,768       8,110     9,009     9,626        10,300


                                                                   Commercial Vechicles (CVs)
                                                                     2008 A    2009 A     2010 P     2011 P    2012 P    2013 P        2014 P

                         Buses
                         Total market sales volume                  17,469     13,149    16,174      19,570    22,896    26,331        29,227
                         GB Auto
                         Assembling capacity (One shift)              600       1,200     2,400       4,200     4,200     4,200         4,200
                         Sales volume                                1,319      792       1,213       2,348     2,862     3,423         3,800
                         Market share (%)                             7.6%      6.0%          7.5%    12.0%     12.5%     13.0%         13.0%

                         Trucks & Trailers:

                         Total Market sales volume                  44,980     33,446    38,463      43,847    49,548    54,999        60,498
INITIATION OF COVERAGE




                         GB Auto:

                         Trucks sales volume                         1,397      1,228     1,412       1,610     1,819     2,019         2,221
                         Trailers sales volume                        625       646       1,115       1,315     1,486     1,650         1,815

                         Total Commercial vechicles:
                         Average selling price/unit (EGP000)         211.1      195.8     199.7       201.7     203.7     204.7         205.7
                         Total Revenue (EGP mn)                       705       522           747     1,064     1,256     1,452         1,612
                         Gross profit Margin (%)                     16.3%      11.7%     14.0%       14.0%     14.0%     14.0%         14.0%

                          After-sale Auto and
                         Source: GBservice: CICR estimates
                         Sales revenue (EGPmn)                        56         64           90      128       151       174           193
                         Gross profit Margin (%)                     27.7%      30.0%     23.0%       29.0%     29.0%     29.0%         29.0%
                         Total CVs revenue (EGPmn)                    762        586       837        1,191     1,407     1,626         1,805
                         Source: GB Auto and CICR estimates

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                         Figure 26 | Forecasted sales breakdown (Cont’d)                                                      10 May 2010

                                                                          Two & Three Wheelers
                                                                         2008 A   2009 A   2010 P   2011 P     2012 P   2013 P        2014 P
                         Three wheelers volume                           36,615   42,592   52,814   59,152     66,250   74,200        83,104
                         Average selling price/unit (EGP000)              12.9     12.1     12.1        12.1    12.0     12.0          12.0
                         Total sales revenue (EGP mn)                     558      581        707       782     862      959          1,067
                         Gross profit margin (%)                         20.1%    25.0%    23.0%    25.0%      25.0%    25.0%         25.0%

                         After-sale service:
                         Sales revenue (EGPmn)                            13       16         21        23      26       29            32
                         Gross profit Margin (%)                         20.9%    21.3%    21.1%    21.1%      21.1%    21.1%         21.1%
                         Total Two & Three wheelers revenue (EGPmn)       571      598      729      806        887      987          1,099

                                                                     Other lines of Business (EGP mn)
                                                                         2008 A   2009 A   2010 P   2011 P     2012 P   2013 P        2014 P
                         Tires                                             75       63      157      282        339      406           488
                         Construction Equipment                           44       54         59        65      71       78            86
                         Construction Equipment after-Sale service         6        6         6          7       8        9             9
                         Transportation Service                           56       54         58        61      66       70            75
                         Leasing Activity                                  3        6         12         25      51      104           212
                         Total Other Lines of Business revenue (EGPmn)    184      182        292       441     535      668           871

                         Source: GB Auto and CICR estimates
INITIATION OF COVERAGE




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                         Figure 27 | Revenue Summary (2008-2014)                                                          10 May 2010

                                                                      Revenue Summary (EGP mn)*
                                                                         2008 A   2009 A    2010 P    2011 P   2012 P   2013 P   2014 P
                          Passenger Cars                                 3,675     2,893    5,768     8,110    9,009    9,842    10,300
                         Growth rate (%)                                          -21.3%    99.4%     40.6%    11.1%     9.2%     4.7%
                          Commercial Vechicles                            762       586      837      1,191    1,407    1,626    1,805
                         Growth rate (%)                                          -23.1%    42.9%     42.4%    18.1%    15.6%    11.0%
                          Two & Three Wheelers                            571       598      729       806      887      987     1,099
                         Growth rate (%)                                           4.6%     21.9%     10.6%    10.1%    11.3%    11.3%
                          Tires                                            75       63        157      282      339      406      488
                         Growth rate (%)                                          -16.5%    150.0%    80.0%    20.0%    20.0%    20.0%
                          Construction Equipment                           50        59       65        72       79       87       96
                         Growth rate (%)                                           19.5%    10.0%     10.0%    10.0%    10.0%    10.0%
                          Transportation Service                           56        54        58       61       66      70        75
                         Growth rate (%)                                           -4.1%      7.1%     6.8%     6.9%    7.1%      7.3%
                          Leasing Activity                                 3         6        12        25       51       104      212
                         Growth rate (%)                                          103.3%    103.3%    103.3%   103.3%   103.3%   103.3%
                          Total Revenues                                 5,192    4,258     7,625     10,547   11,838   13,123   14,076

                                                                    Contribution to total sales revenues
                                                                         2008 A   2009 A    2010 P    2011 P   2012 P   2013 P   2014 P
                          Passenger Cars (PCs):                          70.8%     67.9%    75.6%     76.9%    76.1%    75.0%    73.2%
                          Sales                                          67.7%     64.2%    73.1%     74.5%    73.6%    72.4%    70.7%
                          After-sale service                              3.1%      3.7%     2.6%      2.4%     2.5%     2.6%     2.5%
                          Commercial Vechicles (CVs):                    14.7%     13.8%    11.0%     11.3%    11.9%    12.4%    12.8%
                          Sales                                          13.6%     12.3%    9.8%      10.1%    10.6%    11.1%    11.5%
                          After-sale service                              1.1%      1.5%    1.2%       1.2%     1.3%     1.3%     1.4%
                          Two and Three wheelers:                        11.0%     14.0%      9.6%     7.6%     7.5%    7.5%      7.8%
                          Sales                                          10.7%     13.7%      9.3%     7.4%     7.3%    7.3%      7.6%
                          After-sale service                              0.3%      0.4%      0.3%     0.2%     0.2%    0.2%      0.2%
                          Other Lines of Business (Other LOBs):           3.5%     4.3%       3.8%     4.2%     4.5%     5.1%     6.2%
                          Tires                                           1.4%     1.5%       2.1%     2.7%     2.9%    3.1%      3.5%
                          Construction equipments:                        1.0%     1.4%       0.9%     0.7%     0.7%    0.7%      0.7%
                          Sales                                           0.8%     1.3%       0.8%     0.6%     0.6%    0.6%      0.6%
                          After-sale service                              0.1%     0.1%       0.1%     0.1%     0.1%    0.1%      0.1%
                          Transportation Services                         1.1%     1.3%       0.8%     0.6%     0.6%    0.5%      0.5%
                          Business leasing                               0.1%      0.1%       0.2%    0.2%     0.4%     0.8%     1.5%
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                          TOTAL                                          100%      100%       100%    100%     100%     100%     100%
                         * Including after-sale services revenues
                         Source: GB Auto and CICR estimates




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                         Figure 28 |Gross profit Summary (2008-2014)                                                                  10 May 2010
                                                                                Gross Profit (EGP mn)*
                                                                              2008 A     2009 A   2010 P    2011 P   2012 P   2013 P         2014 P
                          Passenger Cars                                        613       348      799      1,252    1,443    1,588          1,683
                         Growth rate (%)                                                 -43.2%   129.3%    56.8%    15.3%    10.0%           6.0%
                         Gross profit margin (%)                               16.7%     12.0%    13.8%     15.4%    16.0%    16.1%          16.3%
                          Commercial Vechicles                                  131        80      125       186      220      254            282
                         Growth rate (%)                                                 -38.7%   56.2%     48.5%    18.1%    15.6%          11.0%
                         Gross profit margin (%)                               17.1%     13.7%    15.0%     15.6%    15.6%    15.6%          15.6%
                          Two & Three Wheelers                                  115       149      167       201      221      246            274
                         Growth rate (%)                                                 29.1%    12.5%     20.0%    10.1%    11.3%          11.3%
                         Gross profit margin (%)                               20.1%     24.9%    22.9%     24.9%    24.9%    24.9%          24.9%
                          Tires                                                  11        13       31        56       68       81             98
                         Growth rate (%)                                                 14.3%    144.9%    80.0%    20.0%    20.0%          20.0%
                         Gross profit margin (%)                               14.9%     20.4%    20.0%     20.0%    20.0%    20.0%          20.0%
                          Construction Equipment                                  8        8         9        9        10       11             12
                         Growth rate (%)                                                 1.3%      6.3%     10.0%    10.0%    10.0%          10.0%
                         Gross profit margin (%)                               15.9%     13.5%    13.0%     13.0%    13.0%    13.0%          13.0%
                          Transportation Service                                 -6       -6        -6        -6       -5       -5             -4
                         Growth rate (%)                                                 7.1%     -2.2%     -4.6%    -5.7%    -7.1%          -8.9%
                         Gross profit margin (%)                              -10.0%     -11.2%   -10.2%    -9.1%    -8.0%    -7.0%          -5.9%
                          Leasing Activity                                        1         3        6         12       24       50            101
                         Growth rate (%)                                                 163.6%   103.3%    103.3%   103.3%   103.3%         103.3%
                         Gross profit margin (%)                               36.7%     47.5%     47.5%     47.5%    47.5%    47.5%          47.5%
                          Total Gross Profit                                    873       595     1,131     1,711    1,981    2,225          2,445

                                                                             Contribution to Gross profit
                                                                              2008 A     2009 A   2010 P    2011 P   2012 P   2013 P         2014 P
                          Passenger Cars (PCs):                                70.2%     58.6%    70.6%     73.2%    72.9%    71.4%          68.8%
                          Sales                                                62.4%     47.4%    63.4%     66.9%    66.5%    65.1%          62.8%
                          After-sale service                                    7.8%     11.2%     7.2%     6.3%     6.3%     6.3%           6.1%
                          Commercial Vechicles (CVs):                          15.0%     13.5%    11.1%     10.9%    11.1%    11.4%          11.5%
                          Sales                                                13.2%     10.3%    9.2%      8.7%     8.9%     9.1%           9.2%
                          After-sale service                                    1.8%      3.2%    1.8%      2.2%     2.2%     2.3%           2.3%
                          Two and Three wheelers:                              13.2%     25.0%    14.8%     11.7%    11.1%    11.0%          11.2%
                          Sales                                                12.9%     24.4%    14.4%     11.4%    10.9%    10.8%          10.9%
                          After-sale service                                    0.3%      0.6%     0.4%     0.3%     0.3%     0.3%           0.3%
                          Other Lines of Business (Other LOBs):                 1.7%     3.0%      3.5%      4.2%     4.9%     6.2%           8.4%
                          Tires                                                 1.3%     2.2%      2.8%     3.3%     3.4%     3.7%           4.0%
                          Construction equipments:                              0.9%     1.3%      0.8%     0.5%     0.5%     0.5%           0.5%
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                          Sales                                                 0.6%     0.9%      0.5%     0.4%     0.4%     0.4%           0.4%
                          After-sale service                                    0.3%     0.4%      0.2%     0.2%     0.2%     0.2%           0.2%
                          Transportation Services                              -0.6%     -1.0%    -0.5%     -0.3%    -0.3%    -0.2%          -0.2%
                          Business leasing                                      0.1%     0.5%      0.5%     0.7%     1.2%     2.2%           4.1%
                          TOTAL                                                   100%   100%     100%      100%     100%     100%           100%
                         * All figures including after-sale services gross profit
                         Source: GB Auto and CICR estimates




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                                                                                                                              10 May 2010
                         Other Financial Issues
                         Capital Expenditures (CAPEX)
                         According to GB Auto management guidance, the company has a capex plan of
                         EGP1.1bn from 2008-2012, EGP400mn of which was spent during 2008 and
                         2009 and the remaining balance between 2010-2012.
                         The GB Auto Capex program includes the following main items:
                         The expansion of its after-sales network: To reach 35 centres by FY12 (25
                         for PCs and 10 for CVs), up from the current 12 (6 for PCs and 6 for CVs). This
                         represents around 63% of the capex plan at a total expected investment cost of
                         EGP693mn.
                         A new paint shop: Represents 10% of the company’s capex plan at a total
                         expected investment cost of EGP110mn.
                         GB Polo: The establishment of a new bus plant under a joint venture with
                         Marco Polo holds an investment cost of EGP130 mn. The plant is expected to
                         operate with an annual capacity of 4200 units (one shift) p.a. by FY10. The
                         plant represents 12% of the company’s total Capex plan.
                         An assembly line: Was finalised in FY09 at a total investment cost of
                         EGP110mn, representing a 1% of the total capex plan. This assembly line will
                         raise the PC assembly capacity to 90k units p.a., up from 30k units p.a. by end
                         of 2Q10.
                         Trailer project: Represents 2% of the capex plan at a total investment cost of
                         EGP25mn. This trailer project increased the trailer capacity in FY09 to 3k units
                         (one shift) p.a. from 1.2k units p.a.
                         Others: Haram projects, the warehouse system, canter projects and others at a
                         total investment cost of EGP138mn, representing 13% of the capex plan.
                         Figure 29 |GB Auto Capex plan (EGP mn)
                                      Project Name             2008 A     2009 A    2010 P   2011 P    2012 P    Total   % of total
                         Main Projects
                         After Sale Projects                     30        100        363      150          50   693       63%
                         Prima Paint Shop                        30         60         20       0            0   110       10%
                         Trailer Project                         20          5          0       0            0    25        2%
                         GB Polo                                 70         40         20       0            0   130       12%
                         Assembly project                         0         10          0       0            0    10        1%
                         Haram Projects                          45          5          0       0            0    50        5%
                         Warehouse system and Others              0          5         38       0            0    43        4%
                         Others:
                         Canter Project
                         Vehicles
                         Annual & Others
INITIATION OF COVERAGE




                         Prima Building                          25         20         0        0           0     45        4%
                         Chassis Project
                         PMO projects
                         GB Lease Assets
                                        TOTAL                    220        245       441      150       50      1,106     100%
                                    Capex / sales               4.2%       5.8%      5.8%     1.4%      0.4%
                         Source: GB Auto




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                                                                                                                      10 May 2010
                         Employee Stock Ownership Plan (ESOP)
                         In its board of directors (BoD) meeting held on September 1st, 2009, GB Auto
                         announced that it will distribute 2,257,500 bonus shares to its managing
                         director, Dr. Raouf Ghabbour, over a period of three years as part of an ESOP.
                         The BoD received shareholder approval in its extraordinary general meeting
                         (EGM) on March 30th, 2009. The new bonus (not yet finalised) will increase the
                         company’s paid-in capital from EGP129mn to EGP131.3mn shares at a par
                         value of EGP1/share. The company’s FY09 financials showed EGP2.3mn
                         representing the payment under this capital increase at the par value while the
                         balance of EGP16.3mn (representing the difference between the par value and
                         the fair value as of December 31st, 2009) was added to other reserves.
                         Figure 30 | Stock option fair value for the MD
                         Description                                                          Amount
                         No. of shares                                                          2,257,500
                         Share fair value at December 2009 (EGP)                                  24.65
                         Total value of the shares (EGP)                                       55,647,375
                         3 years (Prohibition period)                                               3
                         FY09 portion (EGP)                                                     18,549,125
                         Previously added to FY08 financials (EGP)                             (1,289,125)
                         Charged to FY09 income statement (EGP)                                17,260,000

                         Source: GB Auto

                         EGP18,550k was added to the shareholders’ equity as follows:
                         Figure 31 |Annual addition of ESOP to shareholders’ equity (2009-2011)
                         Description (EGP)                                                    Amount
                         Payment under capital increase                                        2,258,000
                         Stock option fair value 2009 (other reserves)                         16,291,125
                         Total                                                                 18,549,125

                         Source: GB Auto

                         We took this ESOP into account when we valued the company, allocating the
                         ESOP number of shares over 2010-2012 as the company’s paid-in capital
                         increases from its current EGP129mn to EGP131.3mn by FY12.

                         Loans convertible to common stock
                         On April 10th, 2007, GB Auto’s wholly-owned subsidary Almoura acquired a
                         loan amounting to EGP103mn from Cougar Capital Management Inc. to be
                         repaid in cash on October 10th, 2010, or converted into capital shares (the call
                         option) at a price of EGP31.45/share. This subsidiary used this loan to
                         subscribe to GB Auto’s capital increase.
INITIATION OF COVERAGE




                         At the date of the loan acquisition, the company classified the loan in two parts:
                         a liability that will be settled in cash, and another portion that may be settled in
                         cash or converted into shares.
                         The fair value of the liabilty part of the loan was determined based on the
                         prevailing market interest rates used for similar, non-convertible loans. The
                         difference between the receipts and the fair value for the liability part
                         represented the fair value for the right to convert into equity instruments. This
                         loan has a 7% simple interest p.a. in addition to charges on the highest debit
                         balance, amounting to 0.5% monthly. The interest and the accrued charges are
                         due every half year. The fair value is calculated to the part of liabilities in the
                         loan based on the current value of cash flows using an assumed borrowing
                         interest rate of 14%.




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                         Figure 32 | The calculation of the liability part of the convertible loan                                      10 May 2010

                          (EGP 000)                                                             2008             2009
                          Stated value for the loan on April 07                               103,000          103,000
                          Fair value of converting option                                      (1,515)          (1,515)
                          The value of the liability part in April 07                         101,485          101,485
                          Accrued Interest (income statement)                                   9,971            3,013
                          The value of the liability part in the end of the year              111,456          104,498
                         Source: GB Auto

                         We will not forecast the settlement of the loan as ordinary shares until this
                         option is exercised.

                         Earnings per share (EPS)
                         The basic case: We have taken into account the ESOP shares assigned to GB
                         Auto’s MD to represent the basic EPS case by adjusting the weighted average
                         number of the ordinary shares.
                         Figure 33 | Basic EPS case
                         (EGP 000)                                                           2008 A        2009 A          2010 P       2011 P        2012 P
                         Net profit for the shareholders                                    417,904       203,383         473,344      615,713       790,587
                         Less:
                         Employee profit share                                              (19,000)          0               0             0             0
                         Minority interest                                                   (2,030)       (1,935)        (56,382)     (105,750)     (121,670)
                         Net profit for the shareholders                                    396,874       201,448         416,962       509,963       668,917
                         Weighted average number of ordinary shares                         129,000       129,000         129,000       129,000       129,000
                         No. of shares assigned to MD as ESOP                                   0             0             753          1,506         2,258
                         Less: No. of Treasury shares                                        (3,275)       (3,275)         (3,275)       (3,275)       (3,275)
                         Total number of shares                                             125,725       125,725         126,478       127,231       127,983
                         Basic Earning per share                                              3.16          1.60            3.30          4.01          5.23

                         Source: GB Auto and CICR estimates

                         Anti-dilution case: We adjusted the weighted average number of ordinary
                         shares outstanding to assume conversion of all potential ordinary shares
                         (including ESOP and convertible loan shares) . This case reflects the anti-
                         dilution case resulting from an agreement converting a loan to ordinary shares
                         (although we will not take this case into consideration when valuing the
                         company until it is exercised). Net income is adjusted to cancel the loan interset.
                         At the exercise price, the number of convertible shares is 3,275,040 shares.
                         This case is anti-dilutive as the conversion of the loan into ordinary shares
                         increases the EPS after adjusting for interest expense. Therefore, their impact
                         on the calculation of diluted EPS is ignored going forward.
                         Figure 34 |Anti-Dilutive EPS case
                          (EGP 000)                                                           2008 A            2009 A       2010 P       2011 P        2012 P
INITIATION OF COVERAGE




                          Net profit for the shareholders                                    417,904           203,383      473,344      615,713       790,587
                          Less:
                          Employee profit share                                              (19,000)              0            0             0             0
                          Minority Interest                                                   (2,030)           (1,935)     (56,382)     (105,750)     (121,670)
                          Net profit for the shareholders                                    396,874           201,448      416,962       509,963      668,917
                          Debit Interest convertible loan (net after tax)                     10,712           10,712         8,927           0             0
                          Total profits for the shareholders                                 407,586           212,160      425,889       509,963      668,917
                          Weighted average number of ordinary shares                         129,000           129,000      129,000       129,000      129,000
                          Add: No. of shares assigned to MD as ESOP                              0                 0           753          1,506        2,258
                          Less: No. of Treasury shares*                                       (3,275)           (3,275)      (3,275)       (3,275)      (3,275)
                          Add: No. of shares of convertible loan                               3,275             3,275        3,275         3,275        3,275
                          Weighted average number of ordinary shares                         129,000           129,000      129,753       130,506      131,258
                          Basic Earning per share                                              3.16              1.64         3.28          3.91          5.10
                         * Owned by GB Auto (100%-owned) subsidary Almora
                         Source: GB Auto and CICR estimates
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                                                                                                                   10 May 2010
                         Appendix
                         Recent Developments
                         Japanese tires (Yokohama): On April 12th, 2010, GB Auto announced that it
                         had signed an agreement to represent Japanese Yokohama tires in Egypt.
                         Under this agreement, GB Auto will have the right to distribute passenger car,
                         semi-truck, truck, bus and construction equipment tires in Egypt through its
                         outlets and dealership network, which give it a total of 300 points of presence
                         nationwide. The Yokohama representation complements GB Auto’s exclusive
                         representation of Turkish-made Lassa tires.
                         Issuance of non-convertible bonds: On March 30th, 2010, pursuant to its
                         extraordinary general meeting (EGM) decisions from January 28th, 2010 and
                         October 29th, 2009 regarding its multiple-tranche EGP1.5bn bond issue, GB
                         Auto announced the first tranche’s issuance prospectus, totaling EGP1bn.
                         These bonds are non-convertible bonds pari passu with current and future long
                         term loans and liabilities at a par value of EGP100/bond. The yield is 12% (to be
                         paid every three months) and the bonds are to mature in five years. These
                         bonds are callable starting from coupon No.7 on January 1st, 2012.
                         Subscription began on April 14th, 2010. On May 5th, 2010, GB announced that
                         the subscription to the first tranche of these bonds (worth EGP1bn) was covered
                         1.3x.
                         New joint venture in Iraq: On February 4th, 2010, GB Auto announced that it
                         had entered into a joint venture agreement with Al-Kasid Group (which has
                         exclusive rights to distribute Hyundai Motor Company (HMC) products in Iraq) to
                         distribute in the Iraqi market. This new venture will be established in Al-Aqaba
                         (a Jordanian free-zone area) under the name of Ghabbour Al-Kasid Company.
                         The equity of this venture is USD80mn. GB Auto holds a 50% stake for which it
                         paid USD55 mn.
                         Mazda representation: On January 14th, 2010, GB Auto announced it had
                         entered into an exclusive agreement to import and distribute Mazda vehicles in
                         Egypt. GB Auto will support the Mazda franchise with new dealer and after-
                         sales networks. The Mazda 3 (which is a completely built-up unit) is expected
                         initially to roll into three GB Auto-owned showrooms (two in Cairo and one in
                         Alexandria) as well as approximately eight authorised dealers in 2Q10. GB Auto
                         estimates that the Mazda franchise will allow the company to capture an
                         additional two to three percentage points of passenger car (PC) market share in
                         the first year of operations. GB Auto ceased distributing Mazda vehicles in
                         Egypt in 2001 due to an unfavorable customs regime.
                         Micro-finance project: On October 14th, 2009, GB Auto announced the
                         signing of an agreement to establish a venture allowing it to extend installment
                         payment options to consumers unable to obtain mainstream financing. The
                         project establishes a subsidiary that will acquire Bajaj-branded motorcycles and
                         three-wheel vehicles (tuk tuks) already imported and assembled by GB Auto,
                         which will then be sold to consumers on installment payment plans. The
INITIATION OF COVERAGE




                         majority-owned Group subsidiary (named Mashro’ey) will engage the
                         experienced microfinance consultant and service provider EQI (a locally-based
                         firm that has equipped and launched microfinance operations throughout the
                         MENA region) on a shareholder basis. The installment financing options will
                         allow low-income earners to spread the cost of vehicle ownership over an
                         extended period, thereby making purchases of two and three-wheel vehicles
                         affordable for a broader market segment.
                         Employee Stock Ownership Plan (ESOP): In its BoD meeting held on
                         September 1st, 2009, GB Auto announced that it will distribute 2,257,500 bonus
                         shares to its managing director Dr. Raouf Ghabbour, as part of an Employee
                         Stock Ownership Plan (ESOP) after receiving shareholder approval during its
                         March 30th, 2009 EGM. The new bonus (not yet finalised) is expected to
                         increase the company’s paid-in capital from EGP129mn to EGP131mn shares
                         at a par value of EGP1/share.

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                         A Marco Polo project: In June 2008, GB Auto and Brazil’s Marco Polo                        10 May 2010
                         announced the establishment of USD70mn centre for chassis assembly in Suez
                         Governorate. The new facility will have a production capacity of 1,500 units
                         during the first year of operation and is expected to produce up to 8,000 units by
                         2014. This project (which targets the Egyptian, Middle East, African and
                         European markets) will be managed by GB Auto, which owns a 51% stake. The
                         remaining 49% falls under the Brazilian side. The project has been financed
                         internally, with GB Auto’s portion totaling USD35.7mn.

                         J.P. Morgan credit facility: In July 2009, GB Auto announced the securing of a
                         USD20mn structured trade finance credit facility from J.P. Morgan to be used to
                         finance its plans expansion in the Egyptian market and pursue promising
                         opportunities throughout the MENA region.
                         Listing GDR: In June 2009, GB Auto listed GDRs on both the London and New
                         York stock exchanges. The initial quantity of local shares converted to GDRs
                         was 500k shares, with a conversion ratio of 1 GDR: 5 local shares.
                         GB-Allab Project: In February 2009, GB Auto announced acquiring a 51%
                         stake in a joint venture to distribute semi-trailers in Algeria. This agreement is
                         between Ghabbour Egypt (a wholly-owned subsidiary of GB Auto) and
                         SENTRAX. This 51% share gives GB Auto operational control of the newly-
                         formed venture, GB-Allab Remourque.
INITIATION OF COVERAGE




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                                                                                                                                                   10 May 2010
                         Financial Statements
                         Balance Sheet (EGP mn)                2008 A      2009 A       2010 P      2011 P      2012 P       2013 P        2014 P
                         Assets
                         Cash & Cash Equivalent                124.2       141.6       253.6       350.8       393.7        436.4         468.1
                         Net Receivables                       500.3       519.3       889.5      1,135.8     1,168.5      1,291.8       1,389.4
                         Total Inventory                      1,345.2     1,184.0     2,001.5     2,778.5     2,649.0      2,478.6       2,288.1
                         Advance Payments                       64.1        75.9       115.2       159.9       179.9        199.1         214.4
                         Other Trading Assets                    8.6         1.4         1.4         1.4         1.4          1.4           1.4
                         Other Current Assets                    0.0         0.0         0.0         0.0         0.0          0.0           0.0
                         Total Current Assets                 2,042.4     1,922.2     3,261.2     4,426.2     4,392.4      4,407.2       4,361.3
                         Net Plant                            1,181.5     1,360.9     1,956.5     2,283.3     2,480.2      2,531.5       2,534.8
                         Long-Term Investments                  15.5         9.9         9.9         9.9         9.9          9.9           9.9
                         Other Trading Non-Current Assets       29.5        32.2        38.4        46.2        49.6         53.1          55.6
                         Other Non-Current Assets              171.2       184.2       290.6       402.0       451.2        500.2         536.5
                         Intangibles                           188.7       184.3       179.2       178.4       178.4        178.4         178.4
                         Total Assets                         3,628.7     3,693.8     5,735.9     7,346.0     7,561.8      7,680.2       7,676.5

                         Liabilities & Shareholders' Equity
                         Short-Term Debt                       746.3       682.7      1,024.0     1,670.0     1,288.2       858.3         263.5
                         Current Portion Of LTD                 10.0       104.5         0.0       250.0       333.3        333.3          83.3
                         Accounts Payable                       89.6        76.7       135.0       187.4       210.8        233.4         251.3
                         Accrued Expenses                       34.0        33.2        54.8        76.1        85.6         94.7         102.0
                         Down Payments                          96.0       102.3       162.3       224.4       251.9        278.5         299.5
                         Taxes Payable                          66.3        45.2        45.2        45.2        45.2         45.2          45.2
                         Dividends Payable                      40.0       164.8       139.0       182.6       235.1        265.9         294.6
                         Other Spontaneous Finance               0.5         9.3         9.3         9.3         9.3          9.3           9.3
                         Other Current Liabilities             538.4       479.4       815.5      1,124.7     1,261.2      1,397.2       1,497.9
                         Total Current Liabilities            1,621.0     1,698.0     2,385.0     3,769.7     3,720.6      3,515.8       2,846.7
                         Total Long-Term Debt                  101.5         0.0      1,000.0      750.0       416.7         83.3           0.0
                         Other Non-Current Liab.                72.7        65.4        36.4        25.8        19.4         13.0          10.3
                         LTerm Spontaneous Fin.                  0.0         0.0         0.0         0.0         0.0          0.0           0.0
                         Total Liabilities                    1,795.2     1,763.4     3,421.4     4,545.5     4,156.7      3,612.1       2,857.0
                         Deferred Taxes                         18.3        21.8        32.9        45.5        51.1         56.7          60.8
                         Other Provisions                       74.0        42.6        75.1       120.0       170.4        226.3         286.2
                         Minority Interest                      15.0        66.6       123.0       228.7       350.4        492.1         638.8
                         Shareholders' Equity*                1,726.2     1,799.4     2,083.5     2,406.3     2,833.1      3,293.1       3,833.7
                         Total Liabilities & Net worth        3,628.7     3,693.8     5,735.9     7,346.0     7,561.8      7,680.2       7,676.5

                         Income Statement (EGP mn)               2008 A      2009 A      2010 P      2011 P      2012 P        2013 P        2014 P
                         Revenues                              5,192.4    4,258.4      7,625.3    10,547.5    11,838.1    13,123.1      14,075.6
                         COGS                                 (4,268.9)   (3,608.9)   (6,382.4)   (8,859.9)   (9,967.7)   (11,062.8)    (11,879.8)
                         Gross Profits                          923.4       649.5      1,242.9     1,687.6     1,870.4     2,060.3       2,195.8
                         SG&A                                  (277.0)     (243.8)     (419.4)     (580.1)     (651.1)      (787.4)       (914.9)
                         EBITDA                                 646.4       405.7       823.5      1,107.5     1,219.3     1,272.9       1,280.9
INITIATION OF COVERAGE




                         Dep. & Amort.                          (51.0)      (55.0)      (73.8)      (90.8)     (106.0)      (117.6)       (120.2)
                         EBIT                                   595.4       350.7       749.8      1,016.6     1,113.3     1,155.3       1,160.7
                         Interest Expense                      (134.5)     (114.0)     (212.9)     (320.4)     (229.6)      (155.5)        (54.1)
                         Stock option fair value for MD           0.0       (17.3)      (18.9)      (18.9)        0.0          0.0           0.0
                         Provisions                              19.1        20.6        32.5        44.9        50.4         55.9          59.9
                         Interest Income                          0.0         0.0         0.0         0.0         0.0          0.0           0.0
                         Investment Income                        0.0         0.0         0.0         0.0         0.0          0.0           0.0
                         Other Non-Operating Inc.                32.0        26.6        34.9        44.8        51.8         58.7          63.6
                         Other Non-Operating Exp.                 0.0         0.0        (6.4)       (6.4)       (6.4)        (6.4)         (2.7)
                         EBT                                    512.0       266.6       579.0       760.7       979.5      1,108.0       1,227.4
                         Taxes (including deferred taxes)       (94.1)      (63.2)     (115.8)     (152.1)     (195.9)      (221.6)       (245.5)
                         NPAT                                   417.9       203.4       463.2       608.5       783.6        886.4         981.9
                         Minority Interest                       (2.0)       (1.9)      (56.4)     (105.8)     (121.7)      (141.7)       (146.7)
                         Extraordinary Items                      0.0         0.0         0.0         0.0         0.0          0.0           0.0
                         Attributable Profits                   415.9       201.4       406.8       502.8       661.9        744.7         835.2
                         Source: GB Auto and CICR estimates                                                                                        35

                         Please Read Last Page For Contact Details and Important Disclaimer
                                                                                                                     EGYPT | AUTOMOTIVE

                                                                                                                                    th
                                                                                                                                 10 May 2010

                         Cash Flow                              2008 A   2009 A       2010 P     2011 P    2012 P    2013 P   2014 P
                         NOPAT                                534.8    245.6        608.9      837.9     914.0     930.3     912.7
                         Dep. & Amor.                          51.0     55.0         73.8       90.8     106.0     117.6     120.2
                         COPAT                                585.8    300.6        682.7      928.7    1,020.0   1,047.9   1,032.9
                         WI Change                            (659.2)  122.9       (1,087.1)   (932.0)   137.2     86.1      123.8
                         Other Current Items                  112.7     (42.1)      336.1      309.2     136.5     136.0     100.8
                         CF After Current Oper.                39.3    381.4         (68.3)    305.9    1,293.8   1,270.0   1,257.5
                         Financing Payments                   (137.5)  (124.0)      (317.4)    (320.4)  (479.6)   (488.8)   (387.5)
                         Cash Before LT. Use                   (98.2)  257.3        (385.7)     (14.5)   814.2     781.2     870.0
                         Net Plant Change                     (225.3)  (228.8)      (657.8)    (410.4)  (296.6)   (162.4)   (120.9)
                         FCFF                                 (298.7)  194.6       (1,062.2)   (413.7)   860.7     971.6    1,035.8
                         Others                                42.6     10.6        (113.4)     (90.0)   (16.7)     (9.5)    19.3
                         CF Before Financing                  (280.8)   39.1       (1,157.0)   (514.9)   500.9     609.3     768.4
                         Short-Term Debt                      184.5     (63.6)      341.4      646.0    (381.8)   (429.9)   (594.8)
                         Long-Term Debt                        (83.7)    3.0       1,000.0       0.0      0.0        0.0      0.0
                         Net-worth                             (41.8)    (1.2)       (40.1)    (103.2)  (121.7)   (160.5)   (146.7)
                         Grey Area                             39.7     44.3        132.5      208.2     228.0     259.0     270.7
                         Dividends                             40.0      (4.2)      (164.8)    (139.0)  (182.6)   (235.1)   (265.9)
                         Change in Cash                       (142.1)   17.4        112.0       97.2      42.9     42.7      31.7

                         Fact Sheet                           2008 A     2009 A     2010 P     2011 P    2012 P    2013 P     2014 P
                         ROE                                  24.2%      11.3%      22.2%      25.3%     27.7%     26.9%      25.6%
                         ROS                                   8.0%       4.8%       6.1%       5.8%      6.6%      6.8%       7.0%
                         ROA                                  11.5%       5.5%       8.1%       8.3%     10.4%     11.5%      12.8%
                         ROIC                                 21.4%       9.7%      14.6%      15.8%     17.4%     18.0%      18.3%
                         EBITDA Margin                        12.4%       9.5%      10.8%      10.5%     10.3%      9.7%       9.1%
                         ATO                                    1.4        1.2        1.3        1.4       1.6       1.7        1.8
                         WI/ Sales                            33.3%      37.4%      35.2%      34.4%     29.5%     26.0%      23.4%
                         ALEV                                   2.4        2.3        3.0        3.3       2.8       2.5        2.1
                         Debt/ Tangible Networth                1.2        1.1        1.8        2.0       1.6       1.2        0.8
                         Current Ratio                          1.3        1.1        1.4        1.2       1.2       1.3        1.5

                         Per Share Ratios                     2008 A     2009 A     2010 P     2011 P    2012 P    2013 P     2014 P
                         Share Price                            38.33      38.33      38.33      38.33     38.33      38.33     38.33
                         No. Of Shares '000                   129,000    129,000    129,753    130,505   131,258   131,258    131,258
                         Shares held by the group               3,275      3,275      3,275      3,275     3,275      3,275     3,275
                         EPS                                   3.31       1.60       3.22       3.95      5.17       5.82      6.53
                         Div/Share                             0.00       1.03       0.97       1.27      1.63       1.84      2.04
                         Revenues/Share                        41.30      33.87      60.29      82.90     92.50    102.54     109.98
                         BV/Share                              13.73      14.31      16.47      18.91     22.14     25.73      29.96
                         Gross Cash Flow/Share                 4.66       2.39       5.40       7.30      7.97       8.19      8.07
                         FCFF/Share                            -2.38      1.55       -8.40      -3.25     6.72       7.59      8.09
                         EBITDA/Share                          5.14       3.23       6.51       8.70      9.53       9.95      10.01
                         EV/Share                              44.16      43.46      52.33      56.56     51.18     44.88      37.38
INITIATION OF COVERAGE




                         Multiples                            2008 A 2009 A          2010 P    2011 P    2012 P    2013 P     2014 P
                         P/E                                   11.6        23.9       11.9       9.7       7.4       6.6        5.9
                         Div Yield %                           0.0%       2.7%        2.5%      3.3%      4.2%      4.8%       5.3%
                         P/ Revenue                             0.9        1.1         0.6       0.5       0.4       0.4        0.3
                         EV/ Revenues                           1.1        1.3         0.9       0.7       0.6       0.4        0.3
                         P/ COPAT                               8.2        16.0        7.1       5.3       4.8       4.7        4.7
                         EV/ COPAT                              9.5        18.2        9.7       7.7       6.4       5.5        4.6
                         P/ FCFF                               -16.1       24.8       -4.6      -11.8      5.7       5.0        4.7
                         EV/ FCFF                              -18.6       28.1       -6.2      -17.4      7.6       5.9        4.6
                         P/ EBITDA                              7.5        11.9        5.9       4.4       4.0       3.9        3.8
                         EV/ EBITDA                             8.6        13.5        8.0       6.5       5.4       4.5        3.7
                         P/ BV                                  2.8        2.7         2.3       2.0       1.7       1.5        1.3
                         * FY09 Shareholders' equity is adjusted for dividends distributions
                         Source: GB Auto and CICR estimates
                                                                                                                                  36

                         Please Read Last Page For Contact Details and Important Disclaimer
                        Contacts and Disclaimer:
                                                           CI CAPITAL RESEARCH
                                              Mark Rorison | Group Director, Head of Research
                                                         Mark.Rorison@cich.com.eg
                                                                                                                                             CI CAPITAL HOLDING
                            Amr Hussein Elalfy, CFA | Director                          Mona Mansour | Director                          8, Nadi El-Seid Street, Third Floor
                                 Amr.Elalfy@cich.com.eg                                Mona.Mansour@cich.com.eg                                     Dokki, Giza
                                                                                                                                                       Egypt
                                                                          ■■
                                                                                                                                     Reuters pages: COIW, COIX, COIY, and
                                                                                                                                                     COIZ
                                                  CI CAPITAL SECURITIES BROKERAGE                                                        Bloomberg page: COIB <GO>
                                                           (EGYPT & UAE)
                                                                                                                                               For more information,
                                                        Amr Mostafa | Managing Director                                             please contact CI Capital Research on +2
                                                           Amr.Mostafa@cich.com.eg                                                                (02) 33 38 62 59,
                                                                                                                                      send e-mail to Research@cich.com.eg
                                                             DYNAMIC SECURITIES                                                      or visit our website at www.cich.com.eg

                                                     Ahmed Roushdy | Managing Director
                                                        Ahmed.Roushdy@cich.com.eg




                          RATIN G SYSTEM

                          In February 2009, CI Capital Research (CICR) launched a new rating system to give analysts more freedom to be market responsive. This is to
                          make one element of our research more dynamic, namely the advertising of target pric es and recommendations. What w e did not change is our
                          assessment of the Long Term Fair Value (LTFV), nor have w e stopped our detailed industry and company research. What we did is changing the
                          target pric e to trade in the balance of w here a share should trade and w here we think it w ill trade.


                          LTFV: As before we continue to estimate a fundamental valuation, largely DCF and/or NAV based.

                          Target Price: The target price, w hich is not necessarily the LTFV, is w here the analyst, given all (qualitative as w ell as financial) information avail-
                          able, thinks the share price can get to within the next 3-12 months. This can be changed at any time on changing facts, and perceptions.

                          Recommendations: Our new rating system falls out from the total return relating to the share price performance to the target price, and including
                          any dis tributions as may not be included in the target price calc ulation. This is show n in the table below , and to be BUY must return over 19%, an
                          arbitrary hurdle rate w e think reasonable given prevailing interest rates and risks. (Please see table below .)

                          Recommendation structure:                                                        Change to Target Price
                                                                       Strong BUY                                    > 30%                   Strong Conviction
                                                                       BUY                                       > 20% < 30%
                                                                       Hold                                      > 10% < 20%
                                                                       Underw eight                               > 0% < 10%
                                                                       SELL                                           < 0%
INTIATION OF COVERAGE




                           DISCLAIMER

                           The information used to produce this market commentary is based on sources that CI Capital Research (CICR) believes to be reliable and accu-
                           rate. This information has not been independently verif ied and may be condensed or incomplete. CICR does not make any guarantee, representa-
                           tion or w arranty and accepts no responsibility or liability to the accuracy and completeness of such information. Expression of opinion contained
                           herein is based on certain assumptions and w ith the use of specific financial techniques that reflect the personal opinion of the authors of the com-
                           mentary and is subject to change w ithout notice. It is acknow ledged that different assumptions can alw ays be made and that there is a wide choice
                           of techniques that can be adopted each of w hich can lead to a different conclusion. Therefore, all that is stated herein is of an indicative and infor-
                           mative nature as forw ard-looking statements, projections, and fair values quoted may not be realized. Accordingly, CICR does not take any re-
                           sponsibility for decisions made on the basis on the content of this commentary. This commentary is made for the sole use of CICR’s customers
                           and no part or excerpt of its content may be redistributed, reproduced or conveyed in any form, w ritten or oral, to any third party w ithout the prior
                           written consent of CICR. This commentary does not constitute a solicitation or an offer to buy or sell securities.

				
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