“In addition to our analysis of the Information Notice, our discussions with Management and our visit to the Group’s production sites, we emerge with a favorable opinion regarding the subscription to this operation. Concretely, we believe that the CMGP stock should take a positive direction on the stock market on the MT”we can read in the research note.
For AGR, the IPO of CMGP Group comes as a continuation of the strong dynamics enjoyed by the Moroccan equity market for more than two years already. It is a recognized operator in Morocco in terms of irrigation, agrosupplies and infrastructure dedicated to agricultural activities.
Over the last few years, CMGP has been able to build an integrated business model to cover the entire value chain of its clients. A “One Stop Shop” model which has proven itself in the past and whose development prospects are very promising.
Credible and ambitious growth prospects
AGR highlights CMGP’s “credible and ambitious” growth strategy, driven by massive investments and promising opportunities. The IPO, which raises 1.1 billion dirhamswill make it possible to finance an acceleration of its development, in particular:
– The expansion of industrial capacitiescrucial to meeting the growing demand for irrigation and agrosupplies.
– Expanding the distribution networkto strengthen its local and international presence.
– The development of new activitiessuch as solar energy and water treatment, in line with the Kingdom’s environmental priorities.
AGR estimates that CMGP’s earnings capacity could increase by +20% per year on average by 2030to reach 427 million dirhams, a multiplication by 3.5 in seven years. This dynamism is also based on the supportive context of public policies, like the National Water Plan 2020-2050which aims to considerably expand irrigated agricultural areas.
Very favorable momentum for fresh paper on the stock market
The introduction of CMGP comes in a favorable stock market climate, marked by a growing investor appetite for growth stocks. AGR recalls that recent IPOs on the market have recorded high oversubscription rates which sometimes exceed 17 times the initial offer. CMGP is fully part of this dynamic, with an attractive valuation: a Average P/E of 14.1x over the period 2024-2028which offers a discount of 43% compared to the market, and an average return of 4,5%above the Masi average.
Attijari Global Research positions CMGP as a long-term strategic investment, which benefits from perfect alignment with the Kingdom’s priorities and robust fundamentals. Like the stock market successes of Marsa Maroc, Akdital or Cosumar, this IPO could offer investors exceptional performance in the medium term.
