Last week, the Chief Executive Officer of MTN Nigeria Communications Plc (MTNN), the leading player in the Nigerian telecommunication sector, reiterated the firm's plan to sell 14.0% of its group shareholding to retail investors. As of Q1 2021, MTN Mauritius held majority shareholding of the firm at 78.1%, followed closely by Institutional Investors with an aggregate holding of c.18.0%.
Recall that MTN got listed on the Nigerian Exchange Group by Introduction in 2019, meaning there were no new shares issued. At the time, the management of the firm committed to increasing retail ownership in the company when there is an appropriate market condition for the offer.
The CEO also noted that the management will ensure the completion of its three-year plan to deploy about N640bn to two critical areas: broadband acceleration in line with the National Broadband Plan and the connections of the remaining locations in Nigeria that do not have access to modern telecommunication services. MTN Mauritius (MTN Group) holds c. 78.1% of the firm's outstanding shares, while c.18.0% is held by Institutional Investors, a structure which hampers 'day-play' on the stock.
Operationally, MTN reported an excellent performance in Q1 2021, as it built on its strategic market standing and previous performances to post improved metrics across board. The firm retained its dominance of the Nigerian Telecommunication sector with 39.0% of the total subscribers within the space.
Revenue has also continued to improve, up 17.2% y/y to N385.1bn reported in the period. Similarly, Net Profit was up 42.5%y/y to N73.7bn in Q1 2021. We have a price target of N196.68/s and a BUY recommendation on the stock. Current price: N163.0/s.