In light of the Q1'24 earnings release, we raise our 12-month target price (TP) for DANGCEM to N552.42 (vs N375.58 previously); however adjusting our recommendation to a HOLD (BUY previously). Our revision hinges on better FY'24E volume sales expectations, driven primarily by a recovery in Nigerian operations and steady growth in Pan-African markets. We also expect still-high prices in Nigeria and the sustained positive FX translation from Pan-African operations to be supportive of the top line. However, we anticipate compression in margins from elevated operating and finance costs in in line with the broader inflationary environment and FX volatility. In addition, following the expiration of the pioneer tax incentive on Obajana Line V in December 2023, we expect a higher tax charge in the period to pressure the bottom line.
