Cairo – Mubasher: MubasherTrade Research commenced covering Lecico Egypt (LCSW) with a ‘Hold’ recommendation on its stock, according to a research note on Sunday.
The research agency further set the price target (PT) at EGP 3.24 with 16% upside potential.
Key grounds behind the above rating are the company’s “ability to export European-quality products at low manufacturing costs, a strong local market with a growing population, and a proactive veteran management team”.
Lecico Egypt controls 20-25% of the sanitary ware market and 12-15% of the tile market in Egypt.
Worldwide, the sanitary ware producer has strongly tapped into UK, capturing 16% of the sanitary ware market.
It further accounts for over 50% of Egypt's sanitary ware exports to UK, South Africa, Germany, Libya, Egypt, and Lebanon.
However, LCSW faces risks including global economic slowdown and local market overcapacity.
But the research firm’s rough replacement cost analysis suggests a much higher value of EGP 25.45/share, subject to being unlocked by an acquisition.
