Top 40 up 2.71% this year

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Stock Select Monthly

Also inside this edition

Top JSE Winners & Losers (page 3)

Mr Price Group (page 8)

EOH Holdings Limited (page 18)

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September 2015

Risk Factor

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Top 40

up 2.71%

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Small Cap in Focus

TOP 40 STOCK

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Please refer to the disclaimer at the end of this document

Stock Select Monthly – September 2015

In September the JSE All Share Index gained a marginal 0.23% in volatile market conditions. Factors contributing to the uncertainty and volatility in the local share market were the uncertainty surrounding a possible US interest rate hike and global growth concerns which extended to the local economy after the South African Reserve Bank (SARB) substantially revised local gross domestic product (GDP) growth prospects downward to 1.5% and 1.6% in 2015 and 2016 respectively, from 2.0% and 2.1% previously. The SARB left the repo rate unchanged at 6% at its September MPC meeting. South Africa’s headline consumer inflation rate eased to 4.6% (y/y) in August from 5.0% (y/y) in July.

In a predominantly bearish market, the JSE Industrial Index was the only sectoral index that recorded positive growth, rebounding by 3.73% (m/m) after a slide earlier in the month. The Platinum Mining Index fell by 27.51% (m/m) in September (August saw 8.4% recovery) pulled lower by the descending platinum price. The latter has been negatively impacted by the Volkswagen emissions rigging scandal which could potentially reduce demand for the metal.

Quarterly changes to the FTSE/JSE Top 40 Index took effect on 21 September 2015. A notable change was the inclusion of Redefine Properties (JSE code: RDF) and the exclusion of Kumba Iron Ore (KIO).

Energy-focused Montauk Holdings (JSE code: MNK), a subsidiary of Hosken Consolidated Investments (HCI), maintained its position as the top performing share for the year thus far by increasing by 303.85%. However, in September, the shares of beer company SABMiller (SAB) soared and became the month’s best performing share rising 26.73% (m/m) on renewed speculation that the company could be a takeover target of larger rival Anheuser-Busch InBev NV, the maker of Budweiser (see page 2). The rand exchange rate remained volatile in September as emerging market currencies in general suffered from risk-off sentiment during the month. By the end of September the rand has depreciated by 15.86% against the US dollar, 13.48% against the British pound and 6.34% against the euro since the beginning of the year.

In our September issue of Stock Select, we review the performances of our recent Top 40 stock picks and profile the winners and losers on the JSE. On page 8, we review the performance of South African retail company, Mr Price Group (MPC) which carries a market consensus BUY recommendation. In our Mid-to Small Cap Focus, we turn our attention to EOH Holdings

Limited (EOH), on which we have upgraded to a HOLD recommendation from a SELL recommendation. We also discuss the best

and worst small cap performers in 2015. In September analysts changed their recommendation for 5 out of 40 (12.50%) of JSE Top 40 listed companies.

Analyst Top 40 Recommendation changes during September 2015

JSE Code Company Name Previous Analyst Recommendation Current Analyst Recommendation Movement Up/ Down

AGL Anglo American PLC BUY SELL

APN Aspen Pharmacare BUY HOLD

REM Remgro BUY HOLD

RMH RMB Holdings HOLD BUY

SAB SABMiller SELL BUY

Source: Bloomberg, iNET BFA; Thebe Stockbroking Calculations

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Best Performing Shares (YTD 2015)

Worst Performing Shares (YTD 2015)

Company Ticker

code

Share Price Share Price

% Change Company Ticker

code

% Change

(02/01/15) (30/09/15) (02/01/15) (30/09/15)

cps Cps cps cps

Montauk MNK 260 1,050 303.85% Lonmin LON 3,160 350 -88.92%

Cashbuild CSB 16,464 30,501 85.26% Aveng AEG 1,735 360 -79.25%

Brait SE BAT 7,800 14,050 80.13% Kumba Iron Ore KIO 24,700 7,850 -68.22%

Fortress FFB 1,800 3,192 77.33% ArcelorMittal ACL 2,582 855 -66.89%

PSG Holdings PSG 12,942 22,250 71.92% Harmony HAR 2,161 863 -60.06%

Net 1 UEPS NT1 13,500 23,165 71.59% Altron N AEN 1,670 710 -57.49%

Trustco TTO 270 422 56.30% African Rainbow ARI 12,031 5,187 -56.89%

Mondi Limited MND 18,843 29,021 54.01% Altron A AEL 1,619 720 -55.53%

Mondi PLC MNP 18,871 28,911 53.20% Royal Bafokeng Plat RBP 5,200 2,398 -53.88%

Rhodes RFG 1,500 2,248 49.87% Exxaro EXX 10,514 5,250 -50.07%

Capitec CPI 33,950 50,100 47.57% Assore ASR 14,729 7,434 -49.53%

Steinhoff SHF 5,909 8,490 43.68% Impala Platinum IMP 7,485 3,842 -48.67%

Advtech ADH 883 1229 39.18% Aquarius AQP 269 143 -46.84%

Resilient RES 8,449 11,601 37.31% Anglo AGL 21,370 11,560 -45.91%

Capital & Counties CCO 6,631 9,080 36.93% M&R Hold MUR 2,100 1,170 -44.29%

Pioneer Foods PFG 14,580 19,576 34.27% Coronation CML 11,247 6,529 -41.95%

KAP Industrial KAP 480 641 33.54% Nampak NPK 4,332 2,580 -40.44%

EOH Holdings EOH 11,156 14,853 33.14% Invicta IVT 9,801 5,850 -40.31%

Mpact Limited MPT 3,680 4,810 30.71% Howden HWN 4,250 2,560 -39.76%

SABMiller SAB 59,911 78,000 30.19% PPC PPC 2,721 1,710 -37.16%

Best Performing Shares (September 2015)

Worst Performing Shares (September 2015)

Company Ticker

code

% Change Company Ticker

code

% Change

(31/08/15) (30/09/15) (31/08/15) (30/09/15)

cps cps cps cps

SABMiller SAB 61,550 78,000 26.73% Lonmin LON 719 350 -51.32%

Hulamin HLM 480 587 22.29% Northam Platinum NHM 3,771 2,693 -28.59%

Pallinghurst PGL 378 458 21.16% Anglo American Plat AMS 32,019 22,908 -28.45%

Trustco TTO 350 422 20.57% Royal Bafokeng Plat RBP 3,299 2,398 -27.31%

Afrox AFX 1,273 1,505 18.22% African Rainbow ARI 7,104 5,187 -26.98%

Wilson Bayly WBO 9,500 11,099 16.83% Aquarius AQP 195 143 -26.67%

Ascendis ASC 1,416 1,620 14.41% Aveng AEG 481 360 -25.16%

PSG PSG 19,800 22,250 12.37% Harmony HAR 1,128 863 -23.49%

Rhodes RFG 2,037 2,248 10.36% Exxaro EXX 6,782 5,250 -22.59%

Illovo ILV 1,486 1,634 9.96% Impala Platinum IMP 4,952 3,842 -22.42%

Richemont CFR 9,886 10,760 8.84% Anglo AGL 14,685 11,560 -21.28%

British American BTI 70,145 76,029 8.39% PPC PPC 2,170 1,710 -21.20%

AVI AVI 8,100 8,756 8.10% Net 1 UEPS NT1 28,868 23,165 -19.76%

Capevin CVH 900 963 7.00% Mr Price MPC 23,864 19,300 -19.13%

Steinhoff SHF 7,946 8,490 6.85% Datatec DTC 7,500 6,200 -17.33%

Holdsport HSP 5,308 5,650 6.44% Nampak NPK 3,086 2,580 -16.40%

Santam SNT 21,300 22,600 6.10% Sun International SUI 10375 8700 -16.14%

Reinet REI 2,775 2,941 5.98% Group Five GRF 2,230 1,880 -15.70%

Pick ‘n Pay PIK 6,260 6,630 5.91% MMI Holdings MMI 2,811 2,379 -15.37%

Clover CLR 1,750 1,849 5.66% Gold Fields GFI 4,259 3,605 -15.36%

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50 70 90 110 130 150 170 02/01/14 02/04/14 02/07/14 02/10/14 02/01/15 02/04/15 02/07/15

JSE Sectoral Indices

JSE Resources JSE Basic Materials JSE Industrials JSE Consumer Goods JSE Healthcare

70 90 110 130 150 170 02/01/14 02/04/14 02/07/14 02/10/14 02/01/15 02/04/15 02/07/15

JSE Sectoral Indices - Continued

JSE Consumer Services JSE Telecommunications JSE Financials

JSE Technology JSE All Share

12000 20000 28000 36000 44000 52000 60000 68000

Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 JSE Small Cap Index (J202) JSE Top 40 (J200)

Small Cap Index versus Top 40

Source: iNET BFA

Small Cap Index Top 40 2015 Year-to-date _-2.82% _2.71% 2014 15.8% 6.0% Q4:14 5.7% -0.4% Q3:14 0.8% -3.9% Q2:14 4.9% 6.9% Q1:14 3.7% 3.7%

Dividend Yield (DY) 4.22% 3.18% Price Earnings Ratio (PE) 15.30x 18.99x

JSE Indices Performance

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Top 40 focus

Banks 10% Retailers 3% General Mining 7% Platinum Mining 1% Healthcare 3% Food producers 1% Life insurance 5% Telecoms 6% Paper 2% Media 8% Property 3% Tobacco 17% Breweries 15% Oil and gas

3% Investment 3% Diversified Industrials 3% Furniture manufacturers 4% Clothing and accessories 6%

The JSE Top 40 index consists of the forty largest companies by market capitalisation listed on the JSE. While the index is well diversified across sectors, it is dominated by Tobacco (17.42%), Breweries (14.87%) and Banks (10.12%).

Constituents of the Top40 Index – Main Sub-Indices

Source: iNET BFA

The largest five companies by market capitalisation in the Top 40 index are British American Tobacco (R1,539bn), SAB (R1,314bn), Naspers (R726bn), Richemont (R556bn) and BHP Billiton (R442bn).

Below we track the performance of our previously covered Top 40 Company Focus stocks.

Source: iNET BFA, Thebe Stockbroking

Company JSE Code Previous analyst consensus recommendation Current analyst consensus recommendation Date of initial company Focus Price at initial publication (cps) Current spot price (cps) Share Price Growth Median 12 month target price (cps) Remaining share price upside

Aspen APN BUY HOLD 28-Feb-14 27,780 29,400 5.8% 35,400 20.4%

British American BTI BUY BUY 31-Mar-14 57,454 76,029 32.3% 83,179 9.4%

Richemont CFR BUY HOLD 30-Apr-14 10,543 10,760 2.1% 9,430 -12.4%

Steinhoff SHF BUY BUY 30-Aug-14 5,351 8,490 58.7% 8,750 3.1%

Old Mutual PLC OML BUY BUY 29-Aug-14 3,500 3,963 13.2% 4,278 7.9%

Tiger Brands TBS BUY BUY 30-April-15 31,000 30,479 -1.7% 33,000 8.3%

Vodacom VOD HOLD HOLD 30-June-15 13,870 13,750 -0.9% 15,000 9.1%

MTN Group MTN BUY BUY 30-June-15 22,875 17,800 -22.2% 21,915 23.1%

Mediclinic MDC HOLD BUY 31-July-15 11,266 11,043 -2.0% 11,922 8.0%

Netcare NTC BUY BUY 31-July-15 4,039 3,630 -10.1% 4,400 21.2%

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Top 40 Stock Selection

Methodology

Our monthly Top 40 Stock Selection Model is constructed by:

Step 1: Compiling consensus analyst2 Earnings per Share (EPS) forecasts on the constituents of the Top 40 index from Bloomberg and iNET BFA.

Step 2: Shares are filtered according to forecast EPS growth.

Step 3: Share are filtered according to analyst2 consensus recommendations.

Step 4: Strong analyst2 BUY recommendations are filtered by reviewing MTD and YTD share price movements to highlight potential over-bought and over-sold companies.

Step 5: We then apply our consensus Target Price Model (mean 12-month analyst2 Target Price (TP) forecast) to selected companies and calculate potential share price upside to arrive at our Top 40 Company Recommendation.

Top 40 - Median Analyst EPS and 12-Month Target Price Forecasts and Consensus Recommendations

JSE Code Company Name Current Spot Share Price

Median Analyst1 12-month TP

Forecast

Implied Share Price Return (%)

Analyst1 Forecast EPS Growth (next

12-months)

Consensus Analyst1 Recommendation

AGL Anglo American PLC 11,560 15,240 31.8% -13.8% SELL

AMS Anglo American Platinum 22,908 33,000 44.1% 199.3% BUY

ANG AngloGold Ashanti 10,949 12,500 14.2% 387.6% BUY

APN Aspen Pharmacare 29,400 35,400 20.4% 20.4% HOLD

BAT Brait SE 14,050 12,418 -11.6% No Forecast SELL

BGA Barclays Africa 17,020 19,400 14.0% 10.6% HOLD

BIL BHP Billiton 21,000 24,629 17.3% -45.6% HOLD

BTI British American Tobacco 76,029 83,179 9.4% 32.0% BUY

BVT Bidvest Group 32,622 33,902 3.9% 10.9% HOLD

CCO Capital & Counties Prop 9,080 10,180 12.1% No Forecast BUY

CFR Compagnie Richemont 10,760 9,430 -12.4% 101.0% HOLD

CPI Capitec Bank 50,100 41,076 -18.0% 22.8% SELL

DSY Discovery 13,766 11,700 -15.0% -12.6% SELL

FSR FirstRand 4,915 5,711 16.2% 9.6% HOLD

GRT Growthpoint 2,565 2,703 5.4% 22.9% HOLD

INL Investec Ltd 10,585 12,840 21.3% 39.5% BUY

ITU Intu Properties 6,900 7,294 5.7% No Forecast HOLD

MDC Mediclinic 11,043 11,922 8.0% 5.7% BUY

MMI MMI Holdings 2,379 3,000 26.1% 30.9% HOLD

MND Mondi Ltd 29,021 25,000 -13.9% 27.6% HOLD

MPC Mr Price Group 19,300 22,396 16.0% 15.4% BUY

MTN MTN Group 17,800 21,915 23.1% -10.1% BUY

NED Nedbank 21,970 26,250 19.5% 9.8% HOLD

NPN Naspers 173,066 226,500 30.9% 151.4% BUY

NTC Netcare 3,630 4,400 21.2% 22.5% BUY

OML Old Mutual PLC 3,963 4,278 8.0% 80.6% BUY

RDF Redefine Properties 1,170 1,140 -2.6% 27.7% HOLD

REI Reinet 2,941 2,963 0.7% No Forecast HOLD

REM Remgro 25,212 28,401 12.6% -2.1% HOLD

RMH RMB Holdings 6,592 7,223 9.6% 10.2% BUY

RMI Rand Merchant Insurance 4,142 4,300 3.8% 15.6% SELL

SAB SABMiller 78,000 82,858 6.2% 24.0% BUY

SBK Standard Bank 13,500 16,700 23.7% 26.9% BUY

SHF Steinhoff 8,490 8,750 3.1% 25.4% BUY

SHP Shoprite 15,716 17,200 9.4% 14.0% SELL

SLM Sanlam 5,980 7,200 20.4% 7.7% BUY

SOL Sasol 38,760 48,000 23.8% -21.8% BUY

TBS Tigerbrands 30,479 33,000 8.3% 3.1% BUY

VOD Vodacom 13,750 15,000 9.1% 6.6% HOLD

WHL Woolworths Holdings 9,680 10,300 6.4% 29.6% HOLD

1) Analysts from Barclays, Renaissance Capital, Deutsche Bank, BPI, UBS, JP Morgan and SBG Securities are included. Source: Bloomberg, iNET BFA; Thebe Stockbroking Calculations

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Stock Select Monthly – September 2015 -200.0% 0.0% 200.0% 400.0% 600.0% ANG AMS NPN CFR OML INL BTI MMI WHL RDF MND SBK SHF SAB GRT NTC APN RMI MPC SHP BVT BGA RMH NED FSR SLM VOD MDC TBS REM MTN DSY AGL SOL BIL

Expected EPS Growth over next 12 months (%)

-10 -5 0 5 10 TBS MDC VOD SLM BVT MPC SHP SAB FSR RMH APN RMI NED NTC BGA SHF WHL BTI GRT MND RDF NPN SBK INL MMI AMS CFR OML ANG BIL SOL AGL MTN DSY REM -40.0% -20.0% 0.0% 20.0% 40.0% SAB CFR BTI SHF REI ITU CPI MDC DSY ANG BVT RDF TBS NPN MTN OML REM CCO RMI RMH INL GRT BGA INP WHL VOD SHP BAT MNP MND SLM NED BIL FSR SBK SOL NTC APN MMI MPC AGL AMS

Share Price % - Sept (M/D)

We use a Price/Earnings to Growth (PEG) ratio for the shares included in our Top 40 coverage. The PEG ratio compliments the traditional P/E ratio in reviewing company valuations. While the traditional P/E ratio only looks at past earnings, the PEG ratio gives an indication of a company’s future earnings growth prospects.

The PEG ratio is calculated by dividing a company’s current Price Earnings Ratio (P/E ratio) into the company’s expected 12 month forecast Earnings Per Share (EPS) growth rate.

 A PEG ratio of one indicates a theoretical equilibrium between the spot share price and anticipated 12 month earnings

growth, indicating that the share price is FAIRLY VALUED.

 A PEG ratio of less than one indicates that the market has not fully priced in the company’s future 12 month earnings

growth, implying that the stock is UNDERVALUED.

 A PEG ratio of more than one indicates that the market is overestimating a company’s future 12 month earnings growth,

implying that the stock is OVERVALUED.

Top 40 Share Price Change September 15 (%) Top 40 EPS Forecast Top 40 PEG Ratio

1) Based on Median Forecasts of analysts representing Barclays, Renaissance Capital, Deutsche Bank, BPI, UBS, JP Morgan and SBG Securities.

Source: Bloomberg, iNET BFA; Thebe Stockbroking Calculations

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Company name Mr Price Group

Share Code MPC

Consensus Recommendation BUY

12m median target price R223.96

Spot price R193.00

12m implied return 16.0%

12m forecast EPS growth 19.1%

Sub Industry GICS Consumer Services

JSE ICB General Retailers

Market Cap (ZAR bn) 48.73

Tiger Brands (JSE code: TBS)

Top 40 - Company Focus

_{Mr Price Group}

GROUP OVERVIEW

Mr Price Group (JSE code: MPC) is an omni-channel fashion

value retail company based in South Africa where the Group’s operations span approximately 1,066 stores. Mr Price was founded in 1985 and the Group’s first store was opened in 1987 and since then, Mr Price has become a household name, particularly in the South African retail shopping space. The Group also has significant presence in several African countries such as Namibia (37 stores), Botswana (20), Swaziland (7), Nigeria (6), Ghana (5), Zambia (5) and Lesotho (4). Furthermore, Mr Price has franchise stores in Kenya, Mozambique, Rwanda, Tanzania and Uganda.

The Group’s business model differentiates itself by being predominantly cash-driven as approximately 82% of the Group’s sales are for cash. Mr Price targets younger customers in the mid to upper living standards measure (LSM) and the Group mostly retails Mr Price-branded merchandise.

From a share price perspective, the Group’s shares have not shown a resilient performance historically as depicted in Figure 1. Figure 1 shows MPC’s share price performance relative to the JSE General Retailers Index (J537). The figure shows that MPC’s share price has been relatively volatile throughout the 10-year period. Between the years 2004 and 2014; the Group’s shares underperformed the J537 significantly. However, in FY2015, MPC’s shares appear to have performed more in line with the index. The shares of Mr Price are also included in the MSCI Emerging Markets Index.

FINANCIAL PERFORMANCE OVERVIEW

As shown in Figure 2, the Group has recorded healthy revenue growth from FY2010 to FY2015, making gains of approximately 13% CAGR over that period. MPC’s revenue has reflected a constant positive growth trajectory since FY2015. Figure 2 also shows that the Group’s operating margins have grown consistently throughout the same period, rising from 10.5% in FY2010 to 17.1% in FY2015.

Based on the Group’s latest results, the main drivers behind the firm retail sales have been; strong online sales growth, healthy performance of the Apparel and Home segments and financial services growth.

The Group has also managed to grow its headline earnings per share on a consistent basis from 120cps in FY2005 to 920cps in FY2015.Further supporting the Group’s firm HEPS growth is the 29-year CAGR in HEPS which is currently 23.3% CAGR (Figure 3).

Figure 1: MPC vs. J537

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Stock Select Monthly – September 2015 120 162 192 219 252 277 419 503 636 765 920 0 200 400 600 800 1000 2005A 2006A 2007A 2008A 2009A 2010A 2011A 2012A 2013A 2014A 2015A

HEPS (cents per share)

Apparel 73% Home 26% Central Services 1% Apparel 74% Home 21% Central Services 5%

Sources: iNet BFA, Thebe Stockbroking calculations

SEGMENTAL ANALYSIS

Although the Group’s operations are recognised under five brands, namely, Mr Price (Apparel), Mr Price Home, Mr Price Sport, Miladys and Sheet Street, the Group’s business units are categorised into three reportable segments and these are;

Apparel, Home and Central Services. The Apparel segment includes; retails clothing, sportswear, footwear, sporting equipment

and accessories. The Home segment retails homeware and Central Services provides services to the trading segments including Information Technology, internal audit, human resources, group real estate and finance.

Figure 4 shows the revenue segmental contribution for MPC. Although MPC has diversified its operations throughout the years by expanding into the home market (through the Group’s Sheet Street and mrpHome brands), the Apparel division still dominates the revenue figures.

In the Group’s latest FY2015 results, Mr Price (Apparel) stores recorded revenue of R 10.1 billion (59% revenue contribution), Mr Price Home added R3.3 billion (19%), Sheet Street and Miladys added R1.4 billion each (8% contribution) respectively and lastly, Mr Price Sport added R1.1 billion (6% revenue contribution).

From a brand perspective, although the traditional Mr Price apparel store still dominates almost 60% of the Group’s revenue, the Mr Price Home brand is also gaining traction due to the almost 20% contribution it has made to overall revenue in FY2015. With regards to earnings before interest and tax (EBIT) (figure on the right), the Home division earns lower margins (21%) when compared to the Apparel division (74%).

Source: Mr Price Group Annual Results, March 2015

Figure 3: MPC HEPS Growth (2005-2015)

MPC’s ROE has also performed above standard when compared to industry competitors, Truworths (TRU) and The Foschini Group (TFG). MPC’s ROE was recorded at 51.6% for FY2015 (FY2014: 52.2%) while TRU and TFG’s ROEs have been recorded at 36% (FY2014: 38%) and 25.3% (FY2014: 26.4%) respectively for FY2015. The relatively higher ROE indicates that the Group is able to use its capital efficiently to generate profits and grow the company.

MPC’s dividend payments have also shown strong growth in the past 29 years, recording growth at 25% CAGR. In FY2015, the Group increased their annual dividend by 20.3% to 580 cents per share from 482 cents per share recorded in FY2014. However, from a dividend yield (DY) perspective, MPC’s DY of 2.98% is relatively lower than competitors, TFG (4.17%) and TRU (4.77%) and lowers than the JSE Top 40 Index DY of 3.18%. This is supported by MPC’s dividend payout ratio of 63.1% which comes below the payout ratios of both TFG (65.8%) and TRU (68.5%).

Figure 4: MPC Segmental Contribution to Revenue and EBIT

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INVESTMENT CASE

MPC is currently trading on a Price Earnings (PE) ratio of 22.55x, which reflects a premium to the General Retailers Index (J537), currently trading on a PE of 19.71x. We believe the company shows value for the following reasons:



Robust cash generative business model – As mentioned above, approximately 82% of the Group’s sales are cash sales and

this cash-based business model has been carefully managed by the Group as cash sales continue to grow at a faster pace than credit sales. In the Group’s FY2015 results, cash sales growth was recorded at 14.9% while credit sales grew by 7.5%. Some of the benefits of having a high cash sales component include; less exposure to bad debt, the ability to fund and support prospective growth without incurring more debt and less reliance on credit to drive sales growth. Competitors such as Truworths have taken on major strain as their models are still based on the old-fashioned credit model which is no longer relevant as international retailers such as Zara and Cotton On and locally, Mr Price have adopted lucrative cash-based models.



Rapidly growing online presence – MPC’s online store was first launched in South Africa on the 30th of July 2012. Within the first six months of being operational, MPC’s online store was rated as the most searched retail brand on Google SA for 2012. The Group’s online presence has not only recorded remarkable growth but it has also attracted new customers. In the Group’s FY2015 results, for South African operations, sales from traditional brick-and-mortar stores grew by 12.2% while online sales grew by 110.6%. In terms of the increase in the online sales figure, 85% of the increase was attributable to new customers. Due to the pleasing customer response to the online platform, the Group now offers online access to all of its branded stores excluding Miladys. The Group’s online offering has also been a complementary value-add to the performance of Mr Price-branded stores.

 Fashion-value offering – MPC’s fashion offering comprises merchandise that is updated and relevant in terms of the latest

fashion trends and retails at competitive prices. The Group’s business model is based on offering low prices which allows MPC to increase market share (by supporting cost-conscious customers who remain loyal to the brand) even in difficult economic conditions.

RISKS TO THE BUSINESS

 Macro-economic challenges – The retail industry is particularly cyclical in nature and as a result, there are many

macro-economic factors that may either contribute positively to the business in periods of macro-economic prosperity or negatively in periods of economic downturn and contraction. Potential macroeconomic factors that may influence MPC’s business are government fiscal changes such as the potential for interest rate hikes (affecting overall consumer spending), inflation, changes in the International Trade Administration Act (affecting imported and exported merchandise) and the National Credit Act could have a negative impact on the financial performance of the Group. That said, as MPC is seen as a fashion-value offering, opportunity for continued growth in a depressed macro-economic environment as the Group captures market share through consumer down trading to more affordable clothing.

 Rand weakness – Continued rand weakness escalates the issues of higher inventory costs (as Mr Price imports most of its

stock), which will ultimately be passed onto consumers through higher sales prices to retain margin.



The lack of dynamism in the local textile, clothing and footwear industry – The local textile, clothing and footwear

manufacturing industry is not currently thriving caused by many factors including the penetration of cheaper Chinese imports. As expected, the cheaper Chinese imports have had substantial negative impacts on local businesses such as job losses, declines in business sales and profit and severe harmful impacts on cash flow generation and return on investments.  The fragility of labour relations in South Africa – The threat of unprotected strikes remains as an industry-wide threat and

poses a threat to productivity and costs in the long-term. In the South African context, strikes are a critical threat to the economy and have seen many industries, particularly mining, lose significant production output and placed pressure on the performance of the rand currency.

PROSPECTS



The Group intends to increase access to their online business to other African operations. However, MPC has indicated that future online business will be driven only once they have established a physical store presence in a particular market due to the operational requirements and high costs involved in operating an international online business.



The Group is actively seeking new markets for expansion, particularly in their Mr Price (Apparel) and Mr Price Home brands which garner the majority of Group revenues. The Group has identified Australia as a growth opportunity outside of Africa after investigating its viability using online testing and detailed desktop and on-the-ground research. Therefore, prospectively we can expect MPC to open Mr Price test stores in Australia this year.

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Stock Select Monthly – September 2015 9.2 10.3 11.8 13.4 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 2015A 2016F 2017F 2018F R p e r share

MPC Headline Earnings Per Share Forecast

18.1 19.5 21.9 24.8 26.7 18.4% 20.1% 20.9% 21.2% 21.4% 16.0% 17.0% 18.0% 19.0% 20.0% 21.0% 22.0% 0.0 5.0 10.0 15.0 20.0 25.0 30.0 2015A 2016F 2017F 2018F 2019F O p e rati n g mar gi n in % Tu rn o ve r in R b ill io n

MPC Revenue and Operating Margin Forecast

SALES EBITDA %



To fulfil the Group’s local and international expansion plans, capital expenditure of R3.5 billion has been budgeted over the next five years. Part of the costs is expected to cover new ERP and merchandise planning systems and a new distribution centre.

FORECAST

Figure 5 shows the analyst consensus headline earnings per share (HEPS) forecast and the revenue and operating margin forecast for MPC. For the HEPS forecast, analysts expect continuous positive growth from FY2016 to FY2018. For the next financial year results (FY2016), analysts expect HEPS to increase 11.95% from FY2015 to R10.30 and 14.6% from FY2016 to R11.80 in FY2017. In FY2018, analysts expect continued growth at 13.55% from FY2017 to R13.40. The forecast for MPC’s revenue and operating margin shows a positive linear pattern of growth. With regards to MPC’s revenue and operating margin forecast, total Group revenue is expected to increase from R18.1 bn in FY2015 to R26.7 bn in FY2019 and the Group’s operating margin is forecast to grow from 18.4% in FY2015 to 21.4% in FY2019.

Figure 5: TBS’ Actual vs. Estimated Headline Earnings, Revenue and Operating Margin

Source: Mr Price Group, iNET BFA, Bloomberg

RECOMMENDATION AND TARGET PRICE

Table 1 reflects Bloomberg analyst recommendations and 12m TP on Mr Price Group. The Bloomberg analyst consensus median 12m TP is R223.96, implying a 16.0% price return on the current share price of R193.00. The majority of analysts have placed a

BUY recommendation on MPC. Table 1: Bloomberg broker consensus

Firm Recommendation Target price (cps) Last updated Implied return

Investec SELL 19,652 9/23/2015 -17%

Barclays OVERWEIGHT 26,200 9/21/2015 11%

HSBC HOLD 19,500 9/16/2015 -17%

Avior Capital Markets HOLD 22,396 9/16/2015 -5%

UBS SELL 21,700 9/14/2015 -8%

Renaissance Capital OVERWEIGHT 26,600 9/9/2015 13%

Credit Suisse OVERWEIGHT 26,400 9/4/2015 12%

Current share price (cps) 19,300

Median Bloomberg Consensus (cps) 22,396 16%

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20000 25000 30000 35000 40000

Jan-11 Jan-12 Jan-13 Jan-14 Jan-15

BIL BIL 2500 4500 6500 8500 10500 12500

CFR CFR 20000 70000 120000 170000 220000

Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 NPN NPN 10000 15000 20000 25000 30000

MTN MTN 25000 35000 45000 55000 65000

SOL SOL 20000 40000 60000 80000

BTI

Source: iNET BFA

20000 40000 60000 80000

SAB SAB 10000 15000 20000 25000 30000 35000 40000

AGL

Top 40 Share Price Movements

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Stock Select Monthly – September 2015 8000 11000 14000 17000 20000

SBK SBK 1000 2000 3000 4000 5000 6000

FSR FSR 6000 8000 10000 12000 14000 16000

VOD VOD 500 1500 2500 3500 4500

OML OML 5000 15000 25000 35000 45000

APN APN 0 20000 40000 60000 80000

AMS AMS 11000 13000 15000 17000 19000 21000

BGA BGA 2000 4000 6000 8000

SLM

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10000 15000 20000 25000 30000

NED NED 1000 3000 5000 7000 9000 11000

SHF SHF 9000 14000 19000 24000 29000 34000

REM REM 10000 15000 20000 25000 30000 35000

BVT BVT 8000 12000 16000 20000 24000

SHP SHP 4000 14000 24000 34000 44000

ANG ANG 5000 15000 25000 35000 45000 55000 65000

CPI CPI 2000 4000 6000 8000

RMH

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MND MND 1000 2000 3000 4000 5000

NTC NTC 3000 4000 5000 6000 7000 8000

ITU ITU 2000 4000 6000 8000 10000 12000

WHL WHL 1000 3000 5000 7000 9000 11000

CCO

Source: iNET BFA

2000 4000 6000 8000 10000 12000 14000

MDC MDC 1000 2000 3000 4000 5000

RMI RMI 3000 5000 7000 9000 11000 13000

INL

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5000 10000 15000 20000 25000 30000

MPC MPC 15000 20000 25000 30000 35000 40000 45000

TBS TBS 2000 4500 7000 9500 12000 14500 17000

DSY DSY 1500 2000 2500 3000 3500

GRT GRT 1000 4000 7000 10000 13000 16000 19000

BAT BAT 1000 2000 3000 4000

MMI MMI 1000 1500 2000 2500 3000 3500

REI REI 500 700 900 1100 1300

RDF

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Thebe Stockbroking Analyst Share Recommendations

Company Ticker code Latest recommenda tion1 Date of initiation of coverage Price at initiation Current

spot price _Growth2

12 month target

price Remaining share price upside

(cps) (cps) (cps)

Afrimat AFT HOLD 16-Jul-15 1,889 2100 11% 2154 3%

ARB Holdings ARH BUY 14-Jan-13* 430 560 30% 674 20%

Blue Label Telecoms BLU BUY 23-May-11 460 985 114% 1178 20%

Clover Industries CLR HOLD 15-Sep-12 1,100 1849 68% 2035 10%

Datacentrix DCT BUY 11-Jul-11 445 468 5% 605 29%

Datatec DTC HOLD 28-Feb-11 3,487 6200 78% 6655 7%

Ellies ELI SELL 31 Jul 14* 835 65 -92% 60 -8%

EOH EOH HOLD 26-Jan-11 1,700 14853 774% 16118 9%

Pinnacle Technology PNC BUY 27-Nov-12 1,690 1250 -26% 1796 44%

Raubex RBX BUY 10-Jun-14 2080 1749 -16% 3167 81%

BUY: 12m target price (TP) produces a total return in excess of 15%, HOLD: 12m TP produces a total return from 5% to 15%, SELL: 12m TP produces a total return less than 5%. 2) Since initiation. *Transfer of coverage

Source: iNET BFA, Thebe Stockbroking

EOH Holdings Limited – Positioned for African Growth

FY15 Results

 EOH Holdings reported FY15 revenue growth of 35% to R9.733bn (FY14 – R7.220bn), lifting HEPS by 29% to 575cps (FY14 – 447cps). Organic growth accounted for 56% (or R1.407bn) of revenue growth, contributing 51% (or R143.9m) to profit before tax growth.

 The Group reported revenue growth across all segments. Infrastructure grew aggressively by 58% and Software by 60%. Segmental revenue in the Services segment rose by 27% as BPO (up 48%) and Industrial Technologies (up 76%) remain growth drivers in the local market.

 Gross profit rose by 23.6% to R3.201bn (FY14 – R 2.588bn), with the GP margin slipping 300bps to 32.9% (FY14 – 35.9%).  Profit before tax rose by 42% to R951.3m (FY14 – R669m), reflecting a stable PBT margin at 9.77%.

Investors should take note of the following in the results:

 Finance cost – The Group recorded a 47% increase in finance cost from R80.4m to R118.8m over the period as a result of a

number of acquisitions made; totalling R1.090bn of which R236.5m was paid in cash and an additional R403.9m remains outstanding.

 Share of profit from equity-accounted investments – The contribution from TTCS amounted to R10.7m, as it was only

announced on 4 June 2015; it represents only a month’s contribution.

 Goodwill and intangible assets – Increased 49% to R2.989bn (FY14 – R2.001bn) as acquisitions during the year added

R325m to intangible assets and R651.2m to goodwill through the consolidation of CCS, MIE and various smaller acquisitions.

 Trade and other receivables – increased 45% to R2.307bn (FY14 – R1.588bn), growing 10% above current revenue growth.

 Cash and cash equivalents – reflects growth of 56% to R1.663bn (FY14 – R1.064bn), it is important to note that vendors for

acquisitions currently amount to R403.9m.

Mid- to Small Cap Focus

EOH Holdings (EOH)

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 Equity – rose 72% to R4.499bn (FY14 – R2.618bn) due to increased retained earnings and as a result of shares still to be

issued for acquisitions made. During FY15 EOH issued shares to the value of R209.5m to vendors, while an additional R240.4m worth of shares still needs to be issued.

 Acquisitions – EOH spent R1.090bn on acquisitions in FY15. The Group made two sizable acquisitions during the period

totalling R589m as well as a number of smaller bolt-on acquisitions totalling R502.7m. Construction Computer Software (CCS) is a specialised developer of software products used by the construction industry. The CCS acquisition became effective from 19 September 2014, contributing c.9months’ revenue to the Group. Managed Integrity Evaluation (MIE) and Afiswitch offer verification services to the financial services sector and complements its current financial services outsourcing offerings. This acquisition became effective on 1 November 2014, contributing 8 months’ revenue to the Group. During the year EOH had a R550m share placement for the partial payment to the vendors at R108.00 per share.

Our Thoughts: Positioned for African growth

Management’s outlook statement guided for continued growth in FY16, through a combination of organic and acquisitive growth initiatives. We expect that the investments made in FY15 will add additional earnings momentum to the Group in FY16 as the full year contributions of MIE, CCS and TCCS filter to the bottom-line.

The Group has gained significant critical mass over the last five years, enabling it to tender and win much larger contracts and gain market share through its integrated product offering. With the internal development (and acquisition of businesses with) proprietary software, EOH has turned into a turnkey outsourcing services provider with capabilities that span across a wide range of industries including Financial Services (Sybrin), Telecommunications, Retail, Manufacturing, Transport and Logistics, Mining, Health, Energy, Water, Construction (Smart Build and Candy) as well as Local and Central Governments.

The Group expects to increase its revenue from the local public sector, currently 25%, across the spectrum from National, Provincial, local authorities and Parastatals as there is significant pent up demand on technology, in infrastructure and applications. Management sees major opportunities through its Industrial Technologies offering for infrastructure development into Energy, Water, Utilities and Local Government. Timing of this spend is however unclear. EOH currently service in excess of 100 of the 226 local municipalities and 5 of the 8 metropolitan municipalities.

Africa remains a target growth driver as it expands its footprint further into the continent. EOH is currently operational in 33 countries outside South Africa through in-house country presence, partnerships and joint ventures. Africa currently contributes c.10% to Group revenue. The acquisition of equity stakes in TTCS is expected to increase the Group’s African footprint significantly opening cross selling opportunities. This is expected to increase the contribution from Africa to Group revenue significantly over the short term.

Forecast Update

We have made the following changes to FY16E and added estimates for FY17E and FY18E:

o We have raised our Group revenue expectation for FY 16E from R12.18bn to R12.474bn. Our revenue expectation for FY 17E is R15.945bn and FY 18E is R20.551bn, reflecting revenue growth of c.28% per annum.

 Services – Top-line growth is expected to track 29% in FY16E to R9.043bn, 30% in FY17E to R11.794bn and 32% in FY18E to R15.523bn.

 Software – With the consolidation of MIE and CCS, we expect more normalised revenue growth for the forecast period. Revenue expectation for FY16E is forecast at R1.383bn (17% growth), FY17E at R1.590bn (15% growth) and R1.829bn (15% growth).

 Infrastructure –We have increased our FY16E revenue expectation at R2.047bn (previously R1.88bn), which reflects 32% top-line growth on FY15. FY17E revenue is forecast at R2.559bn (25% growth) and FY18E is forecast at R3.199bn (25% growth).

o We have reduced our gross profit expectations, forecasting a GP margin of 33% for FY16E to FY18E (previously 36%). o Our operating expense ratio remains pegged at 25%.

o Our operating profit expectations are based on a Group OP margin of 11% (unchanged) and PBT margin of 11.1% (previously 10.3%) as the contribution of TCCS makes a meaningful contribution going forward. Segmental PBT margin as follow:

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 Software – FY16E to FY18E at 15.0% (previously 13.0%).  Infrastructure –FY16E to FY18E at 4.5% (previously 6.8%).

o We have increased our weighted average shares in issue for the period to 126.1m for FY16E and 129.3m for FY17E.

o

This result in our FY16E HEPS forecast increasing to 779.06cps from 721.43cps, mainly as a result of our revenue and profitability expectation changes as well as the increased share in profits from associates (TCCS). FY17E and FY18E HEPS are forecast at 974.6cps and 1226cps respectively.

Valuation and Recommendation

 Our preferred valuation methodology remains the Discounted Free Cash Flow (DCF) model (Table 4).  We have updated our DCF model to reflect our forecasts discussed above:

Table 4: DCF Model for EOH

R m

FY 16 FY 17 FY 18 FY 19 FY 20 FY 21 FY 22 FY 23 FY 24 Terminal Year

Operating Profit 1 372 1 754 2 261 2 600 2 860 3 089 3 336 3 502 3 643 3 770 Add: Depreciation and

Amortisation 206 263 339 390 429 463 500 525 546 566 EBITDA 1 578 2 017 2 600 2 990 3 289 3 552 3 836 4 028 4 189 4 336 Tax -388 -496 -639 -735 -809 -874 -944 -991 -1030 -1066 Working Capital 808 889 978 1076 1183 1278 1380 1449 1522 1500 Capex 220 282 363 417 459 496 535 562 585 605

Acquisitions (cash portion) -800 -650 -550 -450 -350 -300 -250 -200 -150 -150

Free Cash Flow (FCF) 1 419 2 042 2 751 3 297 3 772 4 152 4 558 4 848 5 115 5 224

Shares in issue (millions) 135 139 142 150 158 167 176 186 196 207

FCF per share (cps) 1 048 1 472 1 935 2 198 2 383 2 487 2 588 2 609 2 609 2 526

Discount Factor 0.86 0.74 0.64 0.55 0.47 0.41 0.35 0.30 0.26 0.22

Discounted FCF (cps) 902 1 090 1 233 1 206 1 125 1 011 905 785 676 4 437

Enterprise Value (cps) 13 371

Add: Net Cash (cps) 502

Fair Value of Equity (cps)

Implied Price Earnings (x)

12m TP (cps) 16 118.6

Implied Exit Price Earnings (x)

Implied Return (%) 6%

Sources: iNET BFA, EOH, Thebe Stockbroking calculations, forecasts and workings

 We arrive at a fair value of 13,371cps (previously 11,204cps) on an implied PE of 24.11x, which is at a premium to the sector PE of 22.06x. It must be said given the re-rating in the share price as a result of its continued growth and evolution into an end-to-end services company, the historic 5 year average PE of 14.36x does risk being too low and perhaps justifies an above-mean Exit PE given its current growth trajectory.

While most investors appear to view EOH as a “tech stock”, we believe that EOH is best considered a service business operating predominantly (but not exclusively) in the ICT sector.

 Rolling our fair value forward, we arrive at our 12m TP to 16,118cps (previous 12m TP: 12,842cps) on a generous Exit PE of 28.0x.

Recommendation

 Our 12m TP of 16,118cps (previous 12m TP: 12,842cps) implies a return of 6%, thus we upgrade EOH from a SELL recommendation to a HOLD recommendation.

 The main factor contributing to our change in valuation and recommendation is that the Group’s recent acquisitive activity (including TCCS) is expected to prolong EOH’s growth trajectory and increase its footprint into Africa where we expect significant cross-selling opportunities of its current products and services.

 The major upside risk to our valuation lies around any future acquisitive activity.  The major downside risk to our valuation is the Group’s medium-term growth rate.

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200 600 1000 1400 1800 2200 2600

Jan-10 Nov-10 Sep-11 Jul-12 May-13 Mar-14 Jan-15 Afrimat AFT Resumption of Coverage: HOLD 2030 3030 4030 5030 6030 7030 8030

Jan-10 Nov-10 Sep-11 Jul-12 May-13 Mar-14 Jan-15 Cps Datatec DTC Initiation: HOLD SELL Transfer of coverage: BUY BUY HOLD HOLD 100 200 300 400 500 600 700 800 900

Jan-10 Jan-11 Feb-12 Mar-13 Mar-14 Apr-15

Cps ARB Holdings ARH Transfer of coverage: HOLD Transfer of coverage: HOLD HOLD HOLD Upgrade to BUY 300 350 400 450 500 550 600

Jan-10 Nov-10 Sep-11 Jul-12 May-13 Mar-14 Jan-15

Cps Datacentrix DCT Initiation: HOLD SELL BUY BUY BUY 200 300 400 500 600 700 800 900 1000 1100

Jan-10 Nov-10 Sep-11 Jul-12 May-13 Mar-14 Jan-15 Cps Blue Label Telecoms

BLU Initiation: HOLD BUY HOLD

BUY SELL HOLD Transfer of Coverage: HOLD BUY BUY

Source: iNET BFA; Thebe Stockbroking

800 1000 1200 1400 1600 1800 2000 2200

Dec-10 Oct-11 Aug-12 Jun-13 Apr-14 Feb-15 Cps Clover Industries CLR Initiation: BUY HOLD BUY Transfer of Coverage: HOLD BUY HOLD HOLD

Mid- to Small Cap Share Price Movements

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Cps EOH EOH Initiation: BUY SELL HOLD SELL Transfer of Coverage: HOLD HOLD SELL HOLD 0 500 1000 1500 2000 2500 3000

Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Raubex Group RBX Initiation: BUY HOLD BUY 0 400 800 1200 1600 2000 2400 2800

Jan-10 Oct-10 Jul-11 Apr-12 Jan-13 Oct-13 Jul-14 Apr-15

Cps Pinnacle Technology PNC Initiation: BUY Transfer of Coverage: HOLD BUY BUY 0 200 400 600 800 1000 1200

Cps Ellies ELI Transfer of coverage: BUY HOLD SELL

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High Yield

Active Growth

Dynamic Core

Tel: +27 11 375 1000

Email: [email protected]

Website: www.thebestockbroking.co.za

We are also available on the following social platforms;

Thebe Stockbroking Risk Profiled Portfolios

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Disclaimer Certification

The analyst(s) who prepared this research report hereby certifies(y) that: (i) all of the views and opinions expressed in this research report accurately reflect the research analyst's(s') personal views about the subject investment(s) and issuer(s) and (ii) no part of the analyst/s compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed by the analyst(s) in this research report.

Rating & Risk Factor Definitions for Mid- to Small Cap Focus BUY: 12m TP produces a total return in excess of 15% HOLD: 12m TP produces a total return from 5% to 15% SELL: 12m TP produces a total return less than 5%

Risk Factor Red: Stocks outside of Top 40 than can be more volatile and low levels of trading liquidity. “Small Cap”/”Mid Cap” Definitions & Prices

All companies outside of the Top 40 index on the JSE.

Every effort has been made to use JSE closing prices, market ratios, implied returns and all other market-related variables from the close of 30 September 2015. Despite this, we do not warrant the completeness or accuracy thereof.

Frequency of Next Update

This is a monthly report. Conflict of Interest

It is the policy of Thebe Stockbroking (Pty) Ltd that research analysts September not be involved in activities in a way that suggests that he or she is representing the interests of Thebe Stockbroking (Pty) Ltd or its clients if this is reasonably likely to appear to be inconsistent with providing independent investment research. In addition research analyst/s reporting lines are structured so as to avoid any conflict of interests. For example, research analysts cannot be subject to the supervision or control of anyone in Thebe Stockbroking (Pty) Ltd sales and trading departments. However, such sales and trading departments September trade, as principal, on the basis of the research analyst/s published research. Therefore, the proprietary interests of those sales and trading departments September conflict with your interests.

Disclosures*

A. The analyst is an officer, board member, or director of the Company B. The Company is a client of Thebe Stockbroking (Pty) Ltd

C. This research report has been communicated to the Company and following this communication, its conclusion(s) has been amended before its dissemination

D. Analyst (s) holds long or short personal positions in a class of common equity Stockbroking of this company

Anglo Platinum D Remgro D BHP Billiton D Richemont D Ellies D MTN D Sanlam D Woolworths D

British American Tobacco D

Previous Ratings This is a sector note. Legal Entities

To South African Residents: Thebe Stockbroking (Pty) Ltd is an Authorised Financial Services Provider. General

For the purposes of this report Thebe Stockbroking (Pty) Ltd refers to all employees of Thebe Stockbroking (Pty) Ltd. This research report is based on information from sources that Thebe Stockbroking (Pty) Ltd believes to be reliable. Whilst every care has been taken in preparing this document, no research analyst or employee or director of Thebe Stockbroking (Pty) Ltd gives any representation, warranty or undertaking and accepts no responsibility or liability as to the accuracy or completeness of the information set out in this document (except with respect to any disclosures relative to members of Thebe Stockbroking (Pty) Ltd and the research analyst/s involvement with any issuer referred to above. All views, opinions and estimates contained in this document September be changed after publication at any time without notice. Past performance is not indicative of future results. The investments and strategies discussed here September not be suitable for all investors or any particular class of investors; if you have any doubts you should consult your investment advisor. The investments discussed September fluctuate in price or value. Changes in rates of exchange September have an adverse effect on the value of investments. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Employees of Thebe Stockbroking (Pty) Ltd and/or their respective directors’ September own the investments of any of the issuers discussed herein and September sell them to or buy them from clients on a principal basis. This report is intended solely for clients and prospective clients of Thebe Stockbroking (Pty) Ltd and is not intended for, and September not be relied on by persons to whom this report September not be provided to by law. This report is for information purposes only and September not be reproduced or distributed to any other person without the prior consent of a member of Thebe Stockbroking (Pty) Ltd. Unauthorised use or disclosure of this document is strictly prohibited. By accepting this document, you agree to be bound by the foregoing limitations.

Top 40 up 2.71% this year

Stock Select Monthly

Also inside this edition

Top JSE Winners & Losers (page 3)

Mr Price Group (page 8)

EOH Holdings Limited (page 18)

September 2015

Invest in one of our portfolios

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Small Cap in Focus

TOP 40 STOCK

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Table of Contents

Best Performing Shares (YTD 2015)

Worst Performing Shares (YTD 2015)

Best Performing Shares (September 2015)

Worst Performing Shares (September 2015)

JSE Sectoral Indices

JSE Sectoral Indices - Continued

Small Cap Index versus Top 40

JSE Indices Performance

Top 40 focus

Top 40 Stock Selection

Tiger Brands (JSE code: TBS)

Top 40 - Company Focus

Mr Price Group

SEGMENTAL ANALYSIS

INVESTMENT CASE





RISKS TO THE BUSINESS



PROSPECTS







FORECAST

RECOMMENDATION AND TARGET PRICE

Top 40 Share Price Movements

Thebe Stockbroking Analyst Share Recommendations

EOH Holdings Limited – Positioned for African Growth

FY15 Results

Investors should take note of the following in the results:

Mid- to Small Cap Focus

EOH Holdings (EOH)

Our Thoughts: Positioned for African growth

Forecast Update

o

Valuation and Recommendation

Recommendation

Mid- to Small Cap Share Price Movements

High Yield

Active Growth

Dynamic Core

Tel: +27 11 375 1000

Email: [email protected]

Website: www.thebestockbroking.co.za

We are also available on the following social platforms;

Thebe Stockbroking Risk Profiled Portfolios

_{Mr Price Group}