UBS: Fast Take: Mobile Telecommunications Company KSCP "Syria reportedly..."

研报英文原文证据摘录

UBS: Fast Take: Mobile Telecommunications Company KSCP "Syria reportedly..."

Forecast returns

Forecast price appreciation 0.0%

Forecast dividend yield 5.7%

Forecast stock return 5.7%

Market return assumption 9.3%

Forecast excess return -3.6%

Company Description

Zain Group is a leading telecommunications provider in the MENA region, operating across

eight markets. It offers mobile voice, data and B2B services (connectivity, cybersecurity,

cloud). Zain Group was founded in 1983 in Kuwait and is listed on the Boursa Kuwait

exchange.

Valuation Method and Risk Statement

We use a sum of the parts valuation methodology, with a blended WACC of 11.6% and a

terminal growth rate of 2.2%.

We see the following key risks to our investment case:

* Competition: there is risk of increased competition across Zain Group's markets. In Iraq,

there is a possibility of a new entrant which could negatively impact our growth forecasts.

* Margin dilution: Increased competition may hinder service revenue growth, particularly

ARPUs, affecting EBITDA margin progression. Additionally, heightened emphasis on

economic digital transformation in some of Zain Group's markets could lead to margin

dilution if the company invests aggressively in this fast growing but relatively lower margin

area.

* Geopolitical/country risks: Zain operates in countries marked by political and geopolitical

unrest, which could impact its operations and financial performance.

* Currency risk: Zain Group's financial performance has been adversely affected by currency

devaluation in recent years.

* Regulation: The sector is subject to strict regulations, and we have observed alterations in

regulations in nations such as Saudi Arabia that have favored emerging brands.