Emirates Integrated Telecommunications Company is an earnings powerhouse.
Ringing the changes:Discover what the UAE telecoms have planned
Etisalat Learn more
Du Learn more
The company, also known as du, is a top pick among telecommunications stocks for next year, with its continued strength in earnings, low valuations and prospects for dividends.
"We continue to favour single-country telecoms operators, focused on organic growth opportunities, coupled with increasing free cash flows and dividends," said Simon Simonian, an analyst at Shuaa Capital, based in Dubai. "The number two telecoms player in the UAE" meets this criteria, he added.
The operator should expect another year of double-digit growth. Earnings before interest, taxes, depreciation and amortisation is forecast to increase 15.4 per cent for this year to 2013, and profit before royalty to grow 18.8 per cent during the same period
Du this year has outperformed both its rival and the UAE stock markets: du is up 1 per cent and Etisalat, the country's first telecoms operator, is down 15.7 per cent. The Abu Dhabi Securities Exchange General Index is down 13.5 per cent for the year, while the Dubai Financial Market General Index is down 18.4 per cent. Despite du's advance, the stock is trading at only four times forecast earnings for next year.
Mr Simonian increased the target price to Dh4.50 from Dh4.32, while maintaining his "buy" rating on the stock.
With an underleveraged balance sheet, the company can start paying dividends.
"Stronger than expected operating cash flow and lower capital expenditures this year allowed du to pay down its debt at a faster pace," Mr Simonian said.
He forecasts a dividend of Dh0.06 a share for this year and Dh0.13 next year.
There are no plans to issue new licences until after 2015, according to comments last month by Mohamed Al Ghanim, the director general of the Telecom Regulatory Authority.
Du is still awaiting a decision from the Ministry of Finance on the royalty rate for this year. The operator paid a royalty rate of 15 per cent on its earnings last year. The market is not pricing a long-term royalty rate below 50 per cent, Mr Simonian said.
Du's stock last traded on Wednesday, closing down 2.6 per cent to Dh2.89.
halsayegh@thenational.ae
FIXTURES
Thu Mar 15 – West Indies v Afghanistan, UAE v Scotland
Fri Mar 16 – Ireland v Zimbabwe
Sun Mar 18 – Ireland v Scotland
Mon Mar 19 – West Indies v Zimbabwe
Tue Mar 20 – UAE v Afghanistan
Wed Mar 21 – West Indies v Scotland
Thu Mar 22 – UAE v Zimbabwe
Fri Mar 23 – Ireland v Afghanistan
The top two teams qualify for the World Cup
Classification matches
The top-placed side out of Papua New Guinea, Hong Kong or Nepal will be granted one-day international status. UAE and Scotland have already won ODI status, having qualified for the Super Six.
Thu Mar 15 – Netherlands v Hong Kong, PNG v Nepal
Sat Mar 17 – 7th-8th place playoff, 9th-10th place playoff
The biog
Full name: Aisha Abdulqader Saeed
Age: 34
Emirate: Dubai
Favourite quote: "No one has ever become poor by giving"
Some of Darwish's last words
"They see their tomorrows slipping out of their reach. And though it seems to them that everything outside this reality is heaven, yet they do not want to go to that heaven. They stay, because they are afflicted with hope." - Mahmoud Darwish, to attendees of the Palestine Festival of Literature, 2008
His life in brief: Born in a village near Galilee, he lived in exile for most of his life and started writing poetry after high school. He was arrested several times by Israel for what were deemed to be inciteful poems. Most of his work focused on the love and yearning for his homeland, and he was regarded the Palestinian poet of resistance. Over the course of his life, he published more than 30 poetry collections and books of prose, with his work translated into more than 20 languages. Many of his poems were set to music by Arab composers, most significantly Marcel Khalife. Darwish died on August 9, 2008 after undergoing heart surgery in the United States. He was later buried in Ramallah where a shrine was erected in his honour.
The specS: 2018 Toyota Camry
Price: base / as tested: Dh91,000 / Dh114,000
Engine: 3.5-litre V6
Gearbox: Eight-speed automatic
Power: 298hp @ 6,600rpm
Torque: 356Nm @ 4,700rpm
Fuel economy, combined: 7.0L / 100km
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Engine: Dual-motor all-wheel-drive electric
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In numbers: China in Dubai
The number of Chinese people living in Dubai: An estimated 200,000
Number of Chinese people in International City: Almost 50,000
Daily visitors to Dragon Mart in 2018/19: 120,000
Daily visitors to Dragon Mart in 2010: 20,000
Percentage increase in visitors in eight years: 500 per cent
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
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The specs: 2019 Haval H6
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Engine: 2.0-litre turbocharged four-cylinder
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