S

Ec
C

Mid

SONATEL: t
Sonatel, th
proposed 1
the stock s
Million.
We believe
bourse; ou
liquidity pr

The stocks
anticipate
principally
trading freq
cobank Research
The first stock s

Sonatel, the lar
10-for-1 stock s
31 October 20
outstanding sha
Friday, 23 Nove
price of XOF14,0
this is Sonatels
will receive nin
The BRVM CI,
telecom stocks:
36% of the inde
Sonatels high
movement with
basis.

Sonatel share p
The stock split
investor base is
could yield wid
unchanged afte
suggest that th
On this accoun
stocks fair valu
the participatio
We also expect
thanks to a red
frequency. How
competition wi
remains high i
valuation mode
In 2011, Sonate
mobile phone b
off the back of
average of 15.8
result, margins
prudent cost m
product innovat
its markets. We
these declining
valuations. How
remains higher
operating in Afr
by the stock spl

Highlights
PLEASE SEE ANA
Commentary
ddle Afri
the stock
he largest comp
10-for-1 stock sp
plit that will inc
e that the stoc
ur back of the
ofile in the mar
s free float will
a strengthen
due to the narr
quency.
h | ecobankresea
plit since listing
rgest company
split proposed b
012 the stock
ares to 100m. T
ember 2012 on
000. Although s
s first stock split
ne additional sha
which is mark
: Sonatel and O
ex. Although the
price was ca
h an average b
rice will be mor
is expected to
s likely to widen
de swings both
er the split; how
e stocks liquidi
nt alone, we as
ue, although this
n level of the u
t the stock split
duction of the b
wever, with S
ll likely intensi
n Mali due to
el shows that the
els revenues we
business and the
f a continued d
8% both in Sen
s continue to b
management st
tion pipeline in a
e believe that
g micro-fundam
wever, despite
r than the ave
rica so the quan
it.
ALYST(S) CERTIFIC
ca Briefi

k split to e
pany by market
plit. Shareholde
crease the comp
ck split will im
envelope calcu
ket could rise by
remain unchan
ing in Sonate
rowing of the bi
arch@ecobank.c
g
by market cap
by management
split that wil
Trading of the s
the BRVM stock
tock splits are c
since listing in
ares of common
ket capitalizatio
Onatel with Son
e benchmark is
arrying a heav
eta Vs the mar
re affordable
improve the liq
n, although an i
ways. The sto
wever, our back o
ty profile in the
ssign an additi
s quantum leap
uninformed ret
t to improve So
bid-ask spread a
Sonatels marke
fy, especially in
political uncert
e equity risk pre
ere partly hit by
e end of tax exe
owndraft in AR
negal and Mali o
be diluted and
trategies in ad
a bid to enhance
equity markets
mentals and a
decreasing mar
erage profitabil
ntum of this dow
CATION(S) AND IM
ing Note
enhance l
t cap on the B
ers approved on
panys outstand
prove Sonatels
lations suggest
y 15%.
ged after the s
els upside sw
id-ask spread ar
com
on the BRVM e
. Shareholders a
l increase the
split shares com
k exchange with
common for tele
1998 and each
n stock for each
on-weighted, ha
natel accounting
not a price-weig
vy weight in
ket hovering at
quidity of Sonat
increase in trad
ocks free float
of the envelope
e market could r
ional 5% prem
will likely be de
tail segment of
onatels upside
arising from hig
ets increasingly
n Senegal and
tainty and as a
emium may reac
y a domestic pri
emption in Mali
RPUs, which dec
over the past 2
Sonatel has ha
ddition to ram
e competitive p
s will continue
assign discoun
rgins, Sonatels
lity of telecom
wnside will likel
MPORTANT DISCL
e | Equity
iquidity

RVM executed
31 October 20
ding shares to 1
s liquidity on t
t that the stock
plit; however, w
wing momentu
rising from high
executed the
approved on
companys
mmenced on
h a post-split
ecom shares,
shareholder
h share held.
as just two
g for nearly
ghted index,
the market
t 1.5 on YTD
tel since the
ing volumes
will remain
calculations
rise by 15%.
ium on the
ependent on
the market.
momentum
gher trading
y maturing,
country risk
a result, our
ch 9%.
ce war in its
. This comes
clined by an
years. As a
ad to adopt
ping up its
ositioning in
to pre-price
ts in their
profitability
companies
y be capped
LOSURES ON THE
y | BRVM
In Billion X
Revenues
EBITDA
EBITDA Ma
EBIT
Net Result
Net Margi
Curren
Perfor
Marke
Marke
Beta V
52 Wk
its
12
00
he
ks
we
um
her
Marke
SONAT
Value tra
Source
E LAST PAGE OF T
Profitabi
10000
12000
14000
16000
18000
20000
01/12/
0
2000
4000
6000
8000
10000
12000
M | SONA
XOF
argin
t
n
nt share price (X
rmance YTD (%)
et cap (Bn XOF)
et cap (Bn US$)
Vs BRVM CI
k range (XOF)
et statistics
TEL: Price and V
aded weekly o
e: BRVM, company,
THIS REPORT.
ility of SONATE
/2009 01/12/
S
ATEL 28 N
2009
562
316
56%
223
185
33%
XOF)
)
Volume traded
on SONATEL (M
, Bloomberg, Ecob
EL
/2010 01/12/
Volume
Sonatel BRVM
November 20
2010 2
599
324
54%
228
184
31%
14,
1,
10,500 - 14,
d
illion XOF)
bank Research
/2011
Price
1
012

2011
635
334
53%
235
154
24%
,000
16.7
,400
2.3
1.8
,400
0
100000
200000
300000
400000
500000

Mid
Figures in Mil
Total Revenu
Operating Inc
Net Income t
Cash and Equ
Total Current
Total Assets
Total Current
Total Liabilitie
Total Equity
Cash From Op
Cash From Inv
Cash From Fin
Returns & Ma
Return on Co
Return on As
Return on Cap
Return on Inv
Operating Ma
Incremental O
Pretax Margin
Net Income M
Net Income t
-20
-15
-10
-5
0
5
10
15
20

Summary
Source: Bloombe
Growth of S
Source: Comp
ddle Afri
llion XOF
es
come
o Common
ivalents
Assets
Liabilities
es
perations
vesting
nancing
argins (%)
mmon Equity
sets
pital
vested Capital
argin
Operating Marg
n
Margin
o Common Ma
erg, n/a not availa
SONATELs ac
pany
ca Briefi
gin
argin
2010/09 2
able
tivities (%)
ing Note
FY
63
23
13
21
47
1 04
38
44
59
28
-12
-15
FY
2011/10
e | Equity
Y 2011 FY
35 361 59
35 765 22
36 521 15
4 769 22
71 557 45
40 937 1 01
81 718 34
48 615 42
92 322 59
82 061 29
23 968 -12
54 984 -12
Y 2011 FY
25,9
13,3
22,4
24,1
37,1
21,2
34,6
21,5
21,5
y | BRVM
Y 2010 FY
99 002 5
28 044 22
59 631 1
26 264 1
57 733 3
14 224 8
47 444 2
22 810 32
91 414 5
94 580 3
28 702 -1
21 973 -1
Y 2010 FY
31,2
16,8
27,5
28,6
38,1
11,4
36,8
26,6
26,6

M | SONA
Y 2009 F
62 626 5
23 884 1
63 603 1
56 644 1
50 522 3
84 103 8
56 522 2
27 219 3
56 884 5
02 290 2
25 748 -1
06 387 -1
Y 2009 F
33,9
19,1
30,3
30,3
39,8
90,0
39,9
29,1
29,1
ATEL 28 N
FY 2008 F
529 552 4
94 105 2
36 578 1
14 099 1
330 970 2
831 839 7
296 287 2
323 906 2
507 933 4
211 620
33 703 -1
42 303 1
FY 2008 F
30,2
17,3
28,7
29,0
36,7
n/a
36,5
25,8
25,8
November 20
FY 2007
470 589
203 805
140 967
114 807
264 115
743 175
216 033
256 606
486 569
8 265
166 556
151 416
FY 2007
34,1
20,2
33,7
35,0
43,3
25,5
41,9
30,0
30,0
2
012

Th
do
do
af
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II.

III

IV

V.

VI

VI

VI

IX

X.

XI

XI

Mid

his document was pre

ocument was gathere
ocument provides the
ffiliates do not in any
ny direct or remote lo
BI SA is a credit institu
SE OF THIS PUBLICATIO
eception of this publi
r any member of Eco
ccordingly, EBI SA (A
his document is publi
een prepared without
n investors individua
he Research Division a
ot discussed in this r
onflicts in general are
he opinions presented
he historical performa
ou may not get back
tes may adversely af
ositions or to obtain r
he information contai
ublished, in whole or
EBI SA Groupe Ecoba
his note has been pre
or any question, pleas
aul-Harry Aithnard
roup Head, Research
es Collines de l'Arche,
2057 Paris La Dfense
ISCLOSURES
esearch analyst certif
he research analyst(s
ccurately reflect their
esearch analyst in this
mportant disclosures
The analyst(s) respon
ompany.
The company benefi
. EBI SA or the Group
V. EBI SA or the Group
EBI SA or the Group
. EBI SA or the Group
I. The company is a c
II. EBI SA or the Grou
. EBI SA or the Group
EBI SA or the Group e
. EBI SA or the Group
I. EBI SA and the issu
ddle Afri
epared under the sup
ed from reliable sour
e opinions, analyses
y way endorse the fin
oss or damage arising
ution authorized by th
ON FOR THE PURPOSE
cation does not mak
bank Group is not ac
member of the Ecoba
shed for information
t regard to the indivi
al circumstances, risk
and EBI SA have impl
report. Further disclo
e available on request
d in this note may be
ance of a security is n
the full amount inve
ffect the value, price
reliable information a
ined in this documen
in part, for any purp
ank 2011. All Rights R
epared by Paul-Harry
se contact:
, 76 route de la Demi
e Cedex France
fication
s) primarily responsi
r personal views. Eac
s research report.
nsible for the prepara
icially owns more tha
is a market maker in
beneficially owns 5%
beneficially holds a s
has been lead mana
client of EBI SA or the
p has lead managed
has received compen
expects to receive, or
has any liquidity con
er have agreed that
ca Briefi
pervision from the Res
rces, but the analyst(
and conclusions of th
ndings, views and co
g out of the use of all
he Autorit de contr
OF MAKING INVESTME
e you a client or prov
cting on behalf of the
ank Group) will not b
purposes only and is
dual financial circum
tolerance and return
lemented Chinese wa
osure regarding Ecoba
t.
e changed without pri
not representative of
sted. Where an inves
or income of that inv
about its value or the
nt is confidential and
ose.
Reserved.
Aithnard and the Eco
-Lune
ble for the preparat
h research analyst(s)
ation and content of
an 5% in EBI SA or Eco
n the publicly traded
% or more of the equ
significant interest of
ager or co-lead manag
Group.
or co-lead managed
nsation for investmen
r intends to seek, com
ntract between EBI or
EBI will produce and
ing Note
D
search Division of EBI
(s) and the publisher
he Research division
nclusions in this docu
or any part of the in
le prudentiel.
ENT DECISION EXPOSES
vide you with the pro
e recipient of this do
e held accountable to
s not an offer to solic
stances and risk and
objectives. The inves
alls procedures to pre
ank policy regarding
ior notice or cannot b
the securitys future
stment is denominate
vestment. In case of
extent of the risk to
is solely for use of t
obank Research
ion and content of a
) also certify that no
this report (as show
obank Group (the Gr
equity securities of th
ity securities of the c
the debt of the comp
ger over the previous
a public offering of t
nt banking services fr
mpensation for invest
r related entity and th
disseminate investm
e | Equity
ISCLAIMER
I SA (a member of Ec
rs of this document d
only and is provided
ument. EBI SA, Ecoba
formation contained
S YOU TO SIGNIFICANT
otections afforded to
ocument and will not
o any recipient for pro
cit, buy or sell any se
return objectives of
stments and shares re
event any conflict of i
g potential conflicts o
be depended upon if
returns. Investment
ed in a currency othe
illiquid investments f
which it is exposed.
hose persons to who
all or any identified
part of their compen
n on the disclaimer p
roup).
he company.
ompany.
pany.
s 12 months of any pu
he securities of the co
rom the company wit
tment banking servic
he issuer
ment recommendation
y | BRVM

obank Group), and is
do not hold themselv
d without any warran
ank Group and its aff
in this document.
T RISK OF LOSS.
clients of EBI SA (A m
t be liable for provid
oviding the protectio
ecurity of any kind. Th
individuals who rece
eferred to in this doc
nterest. Additional i
of interest in the con
used in the place of t
in securities can be h
er than the local curre
for which there is no

om it is addressed an
portion of this rese
nsation was, is, or w
page of this report) h
ublicly disclosed offe
ompany within the la
thin the last 12 mont
ces from the company
ns on the said issuer a
M | SONA
s not necessarily defin
ves responsible for t
nties of any kind. EB
filiates' Directors, Em
member of Ecobank G
ing investment advic
ons afforded to its clie
his document does n
eive it. The appropriat
ument may not be su
nformation may be a
ntext of investment
the investors indepe
highly risky as security
ency of the recipient
organized market it
d may not be reprod
arch report hereby c
ill be, directly or indi
holds personal positio
r of securities of the c
ast 12 months.
ths.
y during the next 3 m
as a service to the iss
ATEL 28 N
nitive, current or auth
he accuracy or comp
BI SA and any membe
ployees or Agents do
Group). When distrib
ce to any recipient in
ents.
ot provide customise
teness of a particular
uitable for all or certa
available to EBI SA or
research and Ecoban
ndent judgment.
y prices may go dow
of the research repo
may be difficult for i
duced, further distribu
certifies that all of t
irectly, related to the
ons in a class of comm
company.
months
suer.
November 20
horitative. Data used
pleteness of data use
er of Ecobank Group
o not accept any liabi
uting this document,
n relation to this doc
ed investment advice
r investment will dep
ain categories of inve
the Ecobank Group w
nk policy on disclosu
n in value as well as
rt, changes in the ex
investors to exit inve
uted to any other pe
he views expressed
e view(s) expressed
mon equity securities
3
012

d in this
d. The
and its
ility for
, EBI SA
ument.
e. It has
pend on
stors.
which is
ure and
up and
change
estment
rson or
herein
by that
s of the