Airtel Africa Share Discussion Threads

[paulo435] 15/10/2020 20:10

Impressed today with this share - FTSE and many stocks dragged down in a sea of red due to Covid lockdown fears etc but there it is keeping the head up and possibly the only positive climb in my portfolio today.

[peddlers] 13/10/2020 20:29

on the 18th of September AAF closed at 65.5 and it hasn't closed higher than that since.

If it had pushed through and closed higher then it may have been a good sign.
Unfortunatley it did not close higher than that.
Another day perhaps

P

[paulo435] 13/10/2020 14:15

What’s your thought process on that one Peddlers? Any particular reason or just some trend analysis ?

[peddlers] 13/10/2020 14:07

If this stays above 65.5 then we are off !

[peddlers] 12/10/2020 15:28

Yes fully agree

[paulo435] 12/10/2020 10:17

Thanks for sharing the articles btw, the banking/financial transaction aspect was the big appeal to me a year or two ago with African telecoms companies - given the state of the countries banking system and currency. Seems like this is very much the way forward still for them and Airtel a main player. Holding also for now

[peddlers] 12/10/2020 10:13

Yeah could be.
I'm holding firm anyway.

[paulo435] 12/10/2020 10:07

Yea some big jumps this morning peddlers, wondering if it’s just the markets digesting the prospects based on the news last week

[peddlers] 12/10/2020 09:31

Sometings going on it appears.
up 5%

[peddlers] 12/10/2020 08:39

Steady away !

[peddlers] 11/10/2020 16:59

Yeah it appears so.
Analystst have set a near term target price of 90P.
If Airtel keep doing deals / aliances then there will be an upgrade to that forecast along the way.

[robsy2] 11/10/2020 10:16

Good find peddlers.it all bodes well.

[peddlers] 10/10/2020 08:24

It may be more than 10%.

Airtel have a chain of thousands of small kiosks, operated by franchisees, which allow customers to load money on to their phone and to withdraw cash.
The service is used extensively to buy food from shops, send money to relatives or to pay utility bills. Transactions sizes vary; last year alone Airtel was behind transactions valued at more than £25billion and the business is growing fast.
An interesting one.

(This is Money,2020)

[robsy2] 09/10/2020 17:35

Thanks peddlers. This should be a no worries buy it and forget it 10% a year stock. I hope!

[peddlers] 09/10/2020 15:42

Chart is looking nice.
Pushing through

[peddlers] 08/10/2020 10:54

Great Post Robsy

[robsy2] 08/10/2020 08:55

Good point.
They have gone straight to mobiles out there. I have invested for myself and some family members .
I pass on my notes that I always write up before I make an investment in the hope that you might find them of interest. I find writing it all down before I buy helps me clarify my thoughts. It also reminds me later why I bought it and what I was looking for, useful if it doesn't pan out as planned.
I think we should do OK here.


BULL POINTS

• They operate in Africa which is a bull point (and a bear point). The bull side is that Africa is on the move economically and is the final frontier for investors. Opportunity beckons.
• In Africa, mobile phone usage is increasing rapidly and there are plenty more customers to be won.
• As the last developing continent, Africa has no fixed phone line infrastructure. Africans have moved quickly from next to nothing to the brick phone to the smart phone. As such, they have leapfrogged the typical development route . This is interesting because they have become especially heavy users of mobiles for all aspects of life, including banking, payments etc because the physical banking infrastructure is often unavailable . They are at the forefront of phone usage and AAF is developing more and more alliances to drive mobile phone usage including a link up with Standard Bank ( Africa’s largest bank) to offer financial services etc.
• AAF has pretensions to be a Pan- African multinational. Of course they have steep competition with Vodafone and others but with the backing of Bharti, and their experience of growing a business in a developing countries like India , they should do well.
• They are a low-cost, no-frills operator. This is a good positioning for cash-strapped customers in Africa. They operate a system of pre-payment offered through an army of vendors dotted around the African towns and cities. The client pre-paying for phone usage greatly reduces bad debts and unpaid bills and explains the strong cash flows that AAF enjoys.
• The financial metrics look pretty good and are improving rapidly as the business gains traction. Like all Telco’s, they have a lot of debt but much less than many of their peer group. The counterbalance is that cash generation is phenomenal and debt is being paid down rapidly. Unlike other Telco’s, AAF is focussed on mobile phones only and is addressing markets in Africa where mobile phone penetration is still relatively low..
• This is a company that has made great strides forward in recent years and has hit profits in 2019 and 2020. Coved has slowed growth but they are delivering but with the stock trading at 25% below the flotation price of 80p, I see value here. The 9 analysts who cover this stock rate it as “OUTPERFORM221; and have target price of 79p, not wildly above the current price admittedly, but analysts expect the company to pay a dividend for the year to 31.03.21 of 6.7 cents . This puts it on a cash covered dividend yield of nearly 8%.
• It is a fairly straightforward business with built in growth drivers as mobile usage increases around the continent. The smart phone is the key device at the centre of all of our lives now, from Alicante to Zanzibar. AAF has the network and a low cost offering that is attractive to cash-conscious African consumers.
• It is a bit under the radar. This could change. The Midas article above will help that. If investors do warm to the story and they keep delivering , we should see a re-rating at some point.
• It does something a bit different for us. It is having a reasonable COVID, has a lot of growth potential and offers our portfolio some diversity.
• The website, reporting , investor communication etc all has a good feel to it. hxxps://airtel.africa/ is worth a look.



BEAR POINTS

• It is a relatively unproven company. It also has one large shareholder, so we are at the beck and call of the Bharti family. If they ever decided to bail out then we will all be in trouble!
• It is an African centred business. UK quoted African companies, that are not mining companies, are practically unheard of. As such, it is fair to say that investors have not got excited about AAF yet. I am hoping and expecting that sentiment could change for the better as they prove themselves.
• Africa is a little different, so we get all the normal risks and a lot of extra ones as well. On the plus side, AAF has institutional backing, it is quoted in London, has an air of efficiency about it , is compliant with first world governance standards and looks and feels fine, but make no mistake, while Africa is maturing it is still a little wild!
• On the plus side, they operate across a lot of countries and everyone wants to keep the phones running. AAF is big enough to compete, the business model is pretty straightforward, consumers need what they do and they seem to know how to do what is needed.
• On the downside, the mandatory risk section of their first set of annual accounts takes up 15 of the 212 pages! I am sure there will be bumps on the road, but hopefully nothing too catastrophic. The accounts are clear, balanced and absolutely first world so I am optimistic.
• One such known risk is currency. They operate in 14 countries, so they earn in a variety of currencies, report in USD but the shares are quoted in GBP… This adds a series of complications in terms of FX rates and could affect reported earnings for better or worse.


Conclusion

I like the look of this company and think it can do a job for us. It could give us that combination of income and growth that we are looking for.
It also offers our portfolio something a little different and gives us diversification business-wise and geographically. It would be nice to be part of the growth story in Africa.
In conclusion, AAF looks like a good opportunity to invest in a growth stock that pays dividends, has a decent track record to date, an undemanding rating and real potential.

[peddlers] 08/10/2020 08:15

It is also cheaper and easier to install infrastructure on land that hasn't been developed as opposed to digging up roads in the UK for example.
My signal in my home city is slower than the one I used in the major west African City I lived.

[peddlers] 08/10/2020 07:27

Africa is certainly a growing market. I have spent quite a bit of my life down there. The mobile network is surprisingly good.

[peddlers] 07/10/2020 21:18

Added today.

[robsy2] 07/10/2020 17:15

It looks good value. Go for it!

[peddlers] 07/10/2020 11:03

Tempted to top up here

[peddlers] 07/10/2020 10:41

Analyst forecast over 90p