Would not be surprised to see these fall back quite a long way to below £25 as GD are obviously set to win the Georgia election in October |
 Loan book growth in H1 was against the backdrop of both BGEO and TBCG expecting 6% real gdp growth.
Both of them have upped their outlook to 7% real gdp growth. And july numbers from both companies have come in ahead of the first half run rate.
Some of this comes from the country becoming an alternative trade corridor.
Forbes had an article on the middle corridor a while ago.
''Georgia's strategic location on the eastern edge of the Black Sea has made it crucial for the Middle Corridor, a trade route between China and Europe bypassing Russia that has grown in importance since Moscow's invasion of Ukraine. In recent years the government has pushed connectivity to the top of Georgia's foreign policy agenda, but the country lacks high-quality infrastructure, with lines of trucks at its borders and ports at Batumi and Poti operating near capacity as trade along the route has steadily increased since 2022. This has led to the World Bank warning that without a deep-sea port in Georgia neither the country nor the Middle Corridor will be competitive as a global trade route''.
The country has recently had rail upgrades increase rail capacity by 50%, a deep sea port development at Anaklia has been agreed with a Chinese developer and a developer is building a new business centre complex in batumi ' Batumi Centropolis'.
If and when the russia/ukraine situation is resolved, i wonder what proportion of trade will resort to using the russian trade corridor, or will the georgia middle corridor prosper? |
Thank you Fly, and also to HoP1 for a terrific summary and for getting the NBG numbers. |
PS FWIW, the July National Bank of Georgia net income data for BOG shows a substantial rise in monthly net income to cGEL200m against an average of GEL122m in Q2. Suggests full steam ahead... |
Thought the results the other day were excellent albeit slightly difficult to dig into due to the addition of Ameriabank for the first time and various one-offs. Looking through the noise, the key takeaway for me was that the enlarged balance sheet is driving growth with group loans rising by 8.6% in Q2. I wouldn't expect that rate to be sustained (it equates to 39% annually!) but it does nonetheless give confidence that future lending growth, a key driver or profit and returns, will remain strong. I was also encouraged that there appeared to be no strains on funding, impairment or capital. Given the strong economic backdrop (which the politics does not appear to be impacting) I expect more of the same looking ahead - high growth plus attractive capital distributions between 30%-50% of earnings. High RoEs plus buybacks should ensure continued rapid NAVps growth meaning that shareholders should get decent returns even without a re-rating. |
Broker forecasts have been upgraded post Q2. |
apple, The company website has recordings of the analysts call for each quarter, along with Q&A. |
Thanks Fly. I have created an account, but cautious about the £100 a year to read such reports for only 3 companies. I'm not saying it's overpriced, just not sure I can make full use. |
apple, Cavendish have updated their coverage, it is available on 'Research tree'. |
I was intrigued by the market response - flat, down and back to flat. I couldn't see anything to dislike. I narrowly missed adding in the low 41s and then got greedy when I could have still bought at 42.
I think this stock sits in the large pile of (UK-listed) entities: which are patently trading at a massive discount to fair value; for which we have no idea if and when much of the value gap will be closed; and for which it makes sense to take at least partial profits on spikes with a pretty high likelihood that one can get back in. This list includes many of the banks and most of the PE ITs. I will try to get to know the company better. |
Results tomorrow.
Anyone already done an estimate based on central bank data? I guess tomorrow shouldn't be too much of a surprise numerically, but guidance may be significant?
Marketscreener has 11.73 for the full year but not sure if I can see more granularity.
I take Popit's point about currency, and political risk may be even higher than in the UK (!) but there are offsetting factors.
I own a modest position so far. |
Pension funds have been reducing exposure to the uk market for several years and now hold a record low allocation to uk equities.
It has been suggested that the Labour government will make changes to uk pension fund regulations in order to make them hold more uk investments.
Perhaps stocks such as this, uk listed with overseas earnings will be in demand later this year. |
So my post of 24 April suggesting that there was plenty more upside here has not aged well...for now at least...!
No view on the politics but the latest monthly data from the National Bank of Georgia very encouraging. Net income in April was in-line with each of the previous 3 months and then was up c20% in May in spite of all the civil unrest. Annualised ROE for 2024 continues to be very high at 33.63% and actually ticked up a bit in May.
So the fundamentals of the business still look rock solid whilst the valuation remains extreme - somewhere around 4x 2024 EPS, 6%+ divi and trading below BV - given the high returns being generated and the growth profile.
So, at the risk of giving the stock another kiss of death, plenty more upside here! Next catalyst: Q2/H1 numbers due mid-August. |
Surely won't finish "red" today?
One of the funniest posts I've seen in a while :-)
Yep, agree with you gobbie.
I think there are elections this October with plenty of potential for civil unrest in the run-up which will only make the market nervous.
Good figures though. |
The critical line in the report is that political uncertainty will remain until the election in October 2024. This will likely overshadow business performance for the foreseeable future. Just too hard to predict direction of this so for me too risky right now even with the strong financial performance. I enjoyed the ride here but will sit on the sidelines for the foreseeable future |
Mortimer, You're a funny Guy :-) |
Surely won't finish red today? |
Excellent update |
Courtesy of the Guardian.
A “foreign agents” law that has brought hundreds of thousands of people on to the streets of Georgia’s capital of Tbilisi could be dropped in return for a package of economic and security support from Washington, the ruling party has hinted.
In response to a draft bill tabled in the US Congress that would open up talks on a trade deal in return for fresh commitments on civil rights, the governing Georgian Dream party said in a statement that it would need to see progress on such promises within a year. |
looks like the company is keen to get news out |
This new bill highlights who is funding ngo's, which is highly desirable.
There are mass demonstrations with both russian and american nationals among those arrested.
What is going on ?
This presents an alternative perspective. |
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