CMGP Group: BKGR recommends buying and sets a target price of 469 DH

As of June 2025, CMGP Group reported stable revenue of 1.12 billion dirhams, reflecting a 0.4% increase. This growth was supported by the Retail Business Unit (BU), international operations, and the ramp-up of industrial units in Jorf and Drarga. By the end of September, revenue growth strengthened to 6.5%, reaching 2.50 billion dirhams, driven by a recovery in the Projects BU during the third quarter. For 2025, BKGR forecasts an annual growth rate of 7.3%. In 2026, revenue is expected to surge by 36%, bolstered by the additional contribution from CPCM and continued organic growth. EBITDA declined by 4.4% in the first half of the year, totaling 178 million dirhams, due to margin contraction in the Projects BU and competitive pressure in the plastics sector. The EBITDA margin stood at 15.9%, down by 0.9 percentage points. However, BKGR anticipates a significant turnaround: EBITDA is projected to grow by 7.7% in 2025 and by 46.1% in 2026, driven by CPCM and industrial normalization. The EBITDA margin is expected to rise to 17.3% by 2026. Despite the decline in EBITDA, net profit attributable to shareholders (RNPG) increased by 2.6% in the first half of 2025, reaching 97 million dirhams, thanks to improved debt cost management. By the end of September, net debt decreased by 40% to 91 million dirhams, while a net cash surplus was recorded at the end of June. Looking ahead to 2026, BKGR anticipates a 51.4% growth in the group’s profit capacity, primarily due to the consolidation of CPCM. On the stock market, CMGP Group's share price rose by 43% in the first half of 2025 compared to its IPO price, reaching a peak of 366 DH. The upward trend continued into the third quarter with a 26.3% increase, resulting in an overall performance of +83% since the IPO. The price-to-earnings ratio (PER), which was high in 2024 at 26.8x, is expected to gradually improve starting in 2026, reaching 21x, in line with the anticipated increase in net profit and better visibility following the integration of CPCM. Capital expenditures (CAPEX) decreased to 22 million dirhams in the first half of 2025 but are projected to reach 1.1 billion dirhams for the year, primarily focused on external growth operations, including the acquisition of CPCM and increasing the stake in AGROSEM. The acquisition of CPCM, a specialist in phytosanitary products, fertilizers, and water treatment products, is a major value creation lever. It aims to expand the product offering, improve market share in phytosanitary products (from 15% to 23%), and generate industrial and commercial synergies starting in 2026. The EBITDA for 2026 could reach up to 520 million dirhams, incorporating initial synergistic effects. Additionally, increasing the stake in AGROSEM to 70% paves the way for comprehensive integration and enhances business complementarities. The group is also continuing its expansion in West Africa and the Sahel. Strengthening the sales network, introducing high-margin products, and exploring targeted M&A operations are expected to gradually increase the contribution from African subsidiaries.