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MTN Nigeria’s Shares Gain 37% In One Month

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Following its listing a month ago on the Nigerian Stock Exchange (NSE), MTN Nigeria Plc shares grew by 36.97 per cent.

MTN Nigeria listed by introduction on the premium board of the NSE on May 16, 2019 to be the first telecommunications network provider to be listed on the Exchange. The company floated 20.35 billion units of ordinary shares at N90 per share, corresponding to a market capitalisation of N1.83 trillion as at May 16, 2019.

The company’s share price rose by 36.97 per cent from its listing day close of N99 to N135.6 as at June 14, 2019. Also, the share capitalisation of the company as at June 14, 2019 stood at N2.76 trillion, gained N930 million, higher than N1.83 trillion in May 16, 2019.

Speaking at the listing of MTN on NSE, the chief executive officer of NSE, Oscar Onyema, said that over the years, MTN Nigeria has evolved from one of the pioneering companies at the birth of a new industry that spearheaded Nigeria’s ICT revolution to a business with the reach and ability to touch lives in every corner of Nigeria.

He noted that MTN’s listing on the Exchange reaffirmed its long-term commitment to expanding opportunities for Nigerians in addition to providing everyday services to them.

He pointed out that this listing creates a new telecoms and technology asset class for investors and provides an opportunity for a wider group of Nigerians to be part of the Nigerian telecom growth story.

According to united Capital Plc, MTN Nigeria full year, 2018 financial report, indicating that revenue grew by 17.1 per cent year-on-year to N1.0 trillion while profit after tax surged 79.7 per cent year-on-year to N145.7 billion.

It noted that the results have spurred buying interest on the stock, saying that the Telco paid N50 billion and N111.6 billion as dividends in 2017 and 2018, translating to a Dividend per Share (DPS) of N2.5 and N5.5 at a payout ratio of c.70 per cent over the period.

“In first quarter (Q1), 2019, MTN reported a revenue growth 13.2 per cent to N282.1 billion. If annualized, this translates to N1.13 trillion by full year, 2019.

“As such, EPS and BVPS numbers both seem likely to settle at c.N9.5 per share. At a dividend payout of 80 per cent compared to 70 per cent average in 2017 and 2018, we estimate dividend per share (DPS) at c. N7.6 which implies a dividend yield of 5.7 per cent.  Again, return on equity (ROE) was 87.7 per cent in 2018, which is consistent with expected ROE of +90 per cent for 2019,” it stated.

United Capital noted that MTNN has a PE of 13.9x compared to 20.4x for peers, implying a fair price of N194.5 per share, saying, “Overall, our blended valuation model sees MTNN at N171.7 per share, indicating that MTNN is underpriced at current price with a 25.7 per cent upside potential.

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