Investment in MTN Nigeria Plc shares could be minting machine as stock market price spikes by about 17 per cent in less than a month after the retail offer. Equity analysts, Stockbrokers told MarketForces Africa the company share movement combine better fundamentals with strong earnings performance.
Ahead of the retail offer which ended December 14 2021, MTN group revealed an intention to sell down 14 per cent of its interest in the local telecom giant to the Nigerians to deepen retail participation. Read: MTN Nigeria: Why You Should Not Miss 575mln Shares Public Offer
Data from the Nigerian Exchange shows that the telecom company share price closed at N197 on Thursday, raising the company’s market valuation above N4 trillion – contesting for the largest position with Dangote Cement valued at N4.26 trillion.
Actually, MTN Share price ended the year 2021 at N182, though it touches a higher level at N182.7 briefly a week before the slowdown.
The company share price increase by about N30 above retail offer barely less than 30-days. The telecom giant will release fourth-quarter result on February 21, 2022, and full-year audited report afterwards.
The market remains positive over the company’s earnings performance in the coming year following the PSB licence obtained from the regulator in 2021.
As of nine months of financial year 2021, revenue was higher by 23.63% year on year to N1.21 trillion. A review of the company’s performance shows that the voice business remains the largest source of revenue.
Revenue from voice accounting for about 60% of MTN Nigeria total revenue, according to its third quarter of 2021 financial statement. Analysts however observe that the telecom company has been strategically driving growth across other business lines, maintaining strong and competitive margins.
In the period, gross and earnings before interest, tax, depreciation and amortisation (EBITDA) margins averaged 74.83% and 46.62% respectively between 2016 and 2020, according to a note from Meristem Securities Limited.
Analysts stated that this has translated to strong shareholder returns with both returns on equity and return on assets averaging 100.29% and 11.30% – far ahead of AIRTELAFRI: 28.73% and 3.00%.
MTN Nigeria share price had closed at N190 per share. However, the group announced discounted retail offer at N169 against the stock market price of N190 following its book-building annulment.
Minimum subscription to the retail offer priced at N169 was 20 shares and thereafter in multiples of 20 shares. The offer includes a bonus share of one share for every 20 shares bought by a retail investor subject to maximum bonus shares of 250 per investor.
However, to qualify for the free share such retail investors must hold the shares allotted to the after the allotment date for at least a period of 12 months. #MTN Nigeria Share Price Spikes 17% Above Retail Offer