CFAO Motors Côte d'Ivoire is back on its feet on the regional stock market BRVM. As of May 7, 2021, the value of its share had risen by 22.2% since January 1, 2021.

This would be the first positive year, after declines of 32% and 17.3% in 2019 and 2020 respectively. The company also records a sustained volume of shares traded. Already 220,645 shares have been traded, according to market data seen on Capital IQ.

This positive investor sentiment is however hard to understand. The company remains on a not-so-positive first half of 2020, with a net profit of CFA1.3 billion, down 49% compared to the same period during 2019. The group said it sold 1,139 fewer vehicles in the first six months of 2020.

Investors may be optimistic about the resilience of the company, which at the end of June 2020 had slightly increased its market share in a sector where volumes were declining. The other positive factor is the rating the company received in November from the Wara rating agency. This rating indicated that CFAO has comparative advantages that enable it to withstand competition.

Also, CFAO's flagship products are vehicles imported from Japan. According to data from xe.com platform, the Japanese currency has fallen by 4.80% since the beginning of May 2020 against the CFA franc. This could help lower the cost of acquiring the products, and thus improve the company's margins.

The public holds only 4.12% of CFAO Côte d'Ivoire’s shares, making 7.47 million shares. Investors are paying attention to the BRVM both in terms of dividends and share price growth. On the reward of shareholders, the company has remained quite correct.

Despite a slowdown in revenue growth between 2017 and 2019, CFAO Côte d'Ivoire has maintained a solid dividend per share.

Idriss Linge