تمــــــــــويل وامـــــــلاك ـ اما ! او !

39 thoughts on “تمــــــــــويل وامـــــــلاك ـ اما ! او !”

1. Having talked about Tamweel fundamental estimates, I just want to add the following fundamental points for your consideration:

   – Opening of foreign limit to 40%

   If you look at foreigners ownership, it was close to 12% for non-nationals, before they opened it up to 40%. This means a big fund from oversees could not come and grab 100M shares if they had wanted to do so. Now they can. It is only temporary that funds are hesitating and have been stinged by financials performance in the US and EU, and are in the middle of huge storm which hit this specific industry. When things settle, they will revisit this sector, and focus on Tamweel and Amlak since these 2 provide for the most growth in the region and are at reasonable PEs relative to growth potential, and the region has not been impacted by sub-prime crisis and real estate prices are stable if not still expected to rise. so the opening up to 40% is extremely positive, and a matter of time before big funds enter and grab big quatntities to fill their apetite.

   – Diversification into other regions

   For folks who do not know, Tamweel has entered Saudi and Egyptian Markets. Plans for 2008 to enter India & Turkish markets. Notice that the targeted markets have the following characteristics: relatively young population, very populated regions, and islamic mortgages are new services. Can you imagine the growth that will result from these markets. I think Tamweel focused on the islamic markets that are the most promissing for future growth. Next expect Indonesia, Malaysia, Pakistan, etc… the profits from islamic financing are much higher then typical financing as we are used to in the west, and there is huge demand for islamic financing and folks are willing to pay extra to feel that they are doing Hallal transactions while previously they would have stayed away from taking a typical non-islamic mortgage.

   – Real Estate Cycle

   I see the cycle main 3 players are builders, developers, and mortgage providers. Take Arabtec for example, the spike in profits and therefore in price of their share happened in 2007, and it is expected to continue doing very well. Developers will show profits and growth around a similar time as builders.

   The mortgage providers performance normally should lag developers and builders, they start making money after the building has been built by builders, and sold by developers. So in the present construction boom, we did not yet see the mortgage boom, this is just the begining, and the mortgage industry boom will start in 2008 and continue for the next 5 years at a minimum. The beautiful thing about motgage profits, is that is repeat profits, almost guarenteed. It takes ~ 1 year to build and sell, it takes 1 day to sell a mortgage that will provide revenues for many years.

   Looking at this cycle and long term, actually it is a bad idea to sell Tamweel or Amlak at the end of 2008, or even in 2009…

   – Growth Rate

   Many people are hoping that Amlak and Tamweel be given bank licences, and operate bank branches in the UAE. I personally think this would be a bad idea. In a booming Real Estate market, the focus should be on providing mortgages fast and diversifying regionally, which they are doing, and access to capital is available from the bond and other market sources. With the FR interest rate cut, and expectation of it going down to near 2 in around 6 months, funding sources are available, and relatively cheap for Amlak and Tamweel… Now it is a race, the more nimble will win a bigger portion of the growing pie, while avoiding big operational and overhead cost for bank branches. Long term, ie after 5 years or so, yes it would make sense once the real estate market stabilizes to go for a bank licence and do what needs to be done in this new envoronment.

   So the growth rate of 100-200% is not a lucky shot, or a one timer, it is the nature of the beast in booming real estate markets. Tamweel should continue on this high growth path for the next 5 years or so, maybe not 100%, but for sure more then builders, developers or banks for that matter.

   – Comparative valuation

   Here are the stocks I follow, and I am not sure if all my numbers are exact, but I wanted to list them quickly, based on latest prices and taking into account the bonus shares distributed as dividents:

   Co PE Growth 07 vs. 06

   Emaar 11; 3%
   Arabtec 13.5; 125%
   DIC 8; 50%
   Tamweel 14; 195%
   Amlak 22; 130%
   UPP 18; 10%
   DIB 13.5; 25%
   IAIC 27 ; -0.20%
   DFM 34; NA
   AA 19 ; NA

   Now the big question is what will be the growth rate for 2008 for each?

   Emaar said that profits for 2008 would be similar as 2007, what is similar mean? the same or 10% growth or 20% !! no one knows. the marlet and analysts were expecting that Emaar in 2008 would do 40-50% growth, and I think that is what killed the share price and drove it back from 15 to 12.

   Arabtec, from the info we have, should do 25% -30% growth… they are a great company and always beat expectations, and their CEO said that he will be going to Saudi soon for possible new projects there.

   DIC, well PE 8, low, growth 50% very good, but we know that a big chunk of profits came from land re-evaluation. How long can they continue doing this !! and since they are in the business of leasing land plots, is it a fair thing to do. I don’t know, but I expect their future should be great and real core profits should grow at a sustainable rate of 15-20% for the next few years.

   Tamweel, I think the best value at the moment with the best growth potential compared to all others companies in DFM (for next 5 years)

   Amlak, next best value after Tamweel, if they can get their act together and start showing similar growth numbers as Tamweel.

   UPP, big promises of high growth in profits in 2008 and mostly 2009. How much, I am not sure, more then Tamweel, I doubt it.

   DIB – Solid Bank with Solid growth of 20 to 25% growth

   IAIC – so far expensive without any growth, but I think if UAE Governments force employers to ensure employees for medical and other type of insurers, that could have a major impact, but by how much can they grow, to be seen.

   DFM – In my opinion it is expensive, but can show growth in 2008 if trading continue to be heavy as in last Qtr of 2007. OMX, Nasdaq deals can bring additional revenues.

   AA – Yes great performance so far, but how much can an airline company continue to grow, and how fast ! if they do 30% year over year, that would be awsome for them.

   That’s it, My own fundamental analysis, and why I picked Tamweel for 6 to 12 months investment.

   Good Luck all…

2. يعطيك العافيه بوشهاب
   مشاء الله عليك

3. اخوي بوشهاب مشكور على التحليل
   لو سمحت عندي مبلغ اريد استثماره طويل الامد وبغيت استثمره في اتصالات او دو فاشورايك دو ولا اتصالات

   تمويل ….وأيضا أعمار …….

4. Based on past performance, I want to add these comments based on my view of Tamweel fundamentals going forward.

   I will put some numbers, may be not 100% exact but approx, based on the info that was announced.

   This is where we stand today:

   Profit per share= 0.45 (2007)
   Growth ~ 200% (2207 over 2006 & same for 2006 over 2005)

   Now we know their mortgage has been doubling year over year, by end of 2007 they have ~ 5-6 B in mortgages

   Last Qtr they said they made ~ 100M core profit from mortgages, and the rest from investment and other sources. So we expect core prfit from mortgages to increase and not decrease.

   Pesimistic view:
   =========

   If we are pesimistic, and worst case scenario, let us assume the mortgage profit growth is only 50% for 2008 and not 100% (my assumption). This means that they will reach by end of 2008 ~8-9 B in mortgages, and profits from core will be ~ 150M per qtr.

   So from Core business alone, I expect profits to be around 600M for FY 2008.

   This is if we do not take into account the Int rate cut which should help them, nor the fact that record Real Estate new units are expected to hit the market in 2008.

   And let us assume that they can make only additional 100M from non-core operations. in 2007, they made much more, so again being very conservative.

   Well, that gives us 600M + 100M = 700M for FY2008. So 700M, gives a Profit per share of 0.70 AED.

   Now, their present PE is 14… again let us be pesimistic and assume that the market will give them a PE of 12 only.

   PE 12 x 0.70 = 8.5 Expected price of Tamweel by End of 2008 (given the above pesimistic assumptions).

   Optimistic view:
   ==========

   If we assume Tamweel can do overall 100% profit growth, instead of 200% they did in 2007, which means Profit per share =0.90

   Let us say by end of 2008, overall market is positive, and Tamweel is given a PE of 18, instead of present 14.

   PE 18 x 0.90 = 16.2 Expected price of Tamweel by End of 2008 (given the above optimistic assumptions)

   Realistic (between the 2)
   ================

   8.50 + 16.2 / 2 = 12.35

   So at present price of 6.50, if price reaches 12.50 by end of 2008, this gives us over 90% profit potential…

   OK, let us not be too greedy… say the pesimistic scenario is the one that happens. from 6.50 to 8.50 gives us over 30% profit potential… not bad.

   I myslef do hold Tamweel and intends on selling above 10 at least. I did the same with Arabtec, held all the way from 5-6 and sold above 11. It takes 6 months – 1 year… but patience pays.

   Good Luck all

5. مع احترامي للجميع الاتحاد العقاريه لم توزع ارباح نقديه منذ تاسيسها وكل سنه ترفع راس المال بمنحه اسهم؟؟؟؟؟؟؟؟؟؟؟؟؟؟؟

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