• For the 6-month period ending June 2021, Mayberry Investments reported a net profit of $288.93Mn (EPS: $0.24), which is a significant improvement over the net loss of $962.01Mn incurred in the prior year. This came on the back of a $1.74Bn rise in net operating income. 
• Although fees and commission, dividend income and net foreign exchange gains fell by 20.9%, 20.9% and 16.6%, respectively, the primary contributor of this increase in net operating income was an unrealized gain on investment of $508.72Mn, relative to a loss $1.19Bn in 2020. The gains reflect in the year on year rise in the prices of stocks held by the subsidiary company, Mayberry Jamaican Equities. Net interest income (68.3%) and net trading gains ($85.99Mn) also rose to support the bottom-line. 
• These increases in income were enough to offset the $61.27Mn (8.5%) expansion in operating expenses which was driven by higher expenditure, namely computer licensing fees, management fees, sales and marketing, donations, insurance and IT consulting fees. 
• Mayberry Investments’ operating performance should continue to improve in the coming quarters, as increases in private consumption, investor confidence and corporate earnings bolstered by more relaxed COVID-19 restriction measures, support improvements in equity prices and therefore unrealized gains from its equity investments. Nevertheless, the current rise in cases, which could lead to the reemergence of the restrictions poses a risk to the recovery, especially with the emergence of new strains of the virus. 
• Mayberry Investment’s stock price has depreciated by 5.8% since the start of the year to close at $5.65 on Thursday. It currently trades at a price to book of 0.76x, which is below the main market financial sector average of 1.92x.

(Source: Company Financials & NCBCM Research)

• The Guyanese economy will be a regional and global outperformer in the coming quarters as an energy boom and a recovery in the non-oil sector are expected to drive real GDP growth. 
• Fitch Solutions, has long highlighted its constructive outlook for Guyana as a nascent energy boom offers tailwinds to short- and long-term growth. In 2020, the economy grew 43.5% despite an estimated 7.3% decline in non-oil activity and the 3.4% global contraction due to the COVID-19 pandemic. 
• That being said, easing domestic risks from COVID-19 and a robust global growth recovery, which is forecasted at 6.7% in 2021 and 4.2% in 2022, will support Guyanese domestic demand and underpin stronger exports in the coming quarters. 
• Sustained export growth and higher public spending will underpin a longer-term expansion; particularly as foreign energy companies accelerate crude oil production in the offshore Stabroek block. 
• Fitch Solutions forecasts Guyanese real GDP growth of 21.1% in 2021 and 19.2% in 2022, from a 45.3% expansion in 2020.

(Source: Fitch Solutions)

• Efforts made in prior years to strengthen business fundamentals, including consolidating its dairy factories, increasing exports, and expanding its distribution footprint through the acquisition of the Facey Consumer business, supported Seprod’s robust earnings performance in 2020.
• Consequently, the company was able to increase revenues by 16.4% (or $5.37Bn) to $38.07Bn in FY2020, which more than compensated for the 6.1% (or $1.45Bn) and 24.3% (or $1.78Bn) rise in direct and indirect expenses, respectively. This influenced an 85.7% or $1.46Bn year over year growth in net profit from continuing operations to $3.17Bn (EPS: $4.32).
• Seprod realized a reduction in the demand for goods and services from the tourism sector (which accounts for a maximum of ~10% of direct revenues). However, this fall-off was more than offset by the sale of pharmaceutical products and basic food items such as flour, cornmeal, cooking oil, and margarines during the pandemic.
• After rising 27.3% in 2020, Seprod’s stock price has further increased by 4.2% since the start of 2021 and closed Tuesday’s trading session at $67.61 per share. At this price, the stock trades at a P/E of 15.7x, which is below the Main Market Distribution & Manufacturing sector average of 27.5x.

(Source: Seprod Financials)