Cairo - Mubasher: MubasherTrade Research said it maintains its price target (PT) for Emaar Misr at EGP 4.04 per share (ETR +54%) with buy/moderate risk rating.

Emaar Misr for Development (EMFD)  reported its results for the second quarter of 2016, showing a 25% y-o-y growth in net income to EGP437 million.

Meanwhile, revenues increased by 46% y-o-y to EGP1.18 billion on higher handover in "Uptown Cairo" and "Marassi" projects, beating consensus by 58%. Net income growth was also driven by higher interest income to EGP121 million in Q2 - 2016 vs. EGP32 million in Q2 - 2015 given EMFD's solid cash position of EGP2.66 billion in addition to its financial assets of EGP2.17 billion at end of June 2016.

However, gross profit margin dropped by 11.9% points y-o-y to 36.4% due to the change in "Marassi" handover mix.

EMFD reported income tax of EGP34 million in Q2 - 2016 compared to only EGP0.3 million in Q2 - 2015 as a result of generating higher gross profits from "Uptown Cairo" project, reaching EGP100 million in Q2- 2016 vs. EGP11mn in Q2 2015. We highlight that "Marassi" and "Mivida" projects have tax exemptions till 2018.

EMFD also invests most of its IPO proceeds in fixed income securities: The company revealed that it has spent around EGP154mn, representing 6.7% of its Initial Public Offering (IPO) proceeds, on "Emaar Square", "Mivida Downtown", "Marassi Marina" and the hospitality activities in Marassi by EGP77 million, EGP30 million, EGP36 million and EGP12 million, respectively.