Cairo - Mubasher: MubasherTrade Research (MTR) maintained its price target for Heliopolis Housing & Development at EGP86.2/shr (ETR +65%) with buy/high risk rating.

Heliopolis Housing posted its financial results for the first quarter of FY2016/17, reporting a decline of 50% y-o-y in net income to EGP26 million.

MTR believes such decline in the company's net income is attributed to the decrease of revenues to EGP 85 million as a result of halting land sales in addition to lower development sales during the quarter.

MTR noted that HELI will adopt off-plan sale business model, which will normally result in low revenues at the early phases of the project. However, revenues usually rebound at the handover phase.

Heliopolis Housing profits was also influenced by the fell of the profit margin by 50.9%, which MTR believes it was mainly due  the change in revenues mix, which skewed more toward developments rather than land sales.

MTR pointed out that HELI's high margin in the fourth quarter of FY2015/2016 was mainly due to receivable factoring contract.