SGTM IPO — Attijari Global Research Equity Story

The Scale Construction Champion Positioned at the Heart of Morocco’s 2030 Infrastructure Super-Cycle

1. Executive Summary — A Historic Moroccan IPO Backed by a Structural National Investment Cycle

SGTM’s IPO, raising MAD 5.0 billion, is the second-largest listing in the history of the Moroccan equity market, surpassed only by Maroc Telecom’s 2004

privatization.

The offering gives global investors access to a sector leader with more than 1,000 completed landmark projects and a consolidated revenue base expected to reach MAD 14 billion in 2025A.

What makes this equity story compelling is simple: the companies that align with Morocco’s strategic national programs typically outperform the market materially.

The report highlights three major precedents:

• Cosumar, aligned with Plan Maroc Vert: +120% share price performance (2013–2016).

• Marsa Maroc, aligned with the Stratégie Portuaire Nationale 2030: +363% in five years.

• Akdital, aligned with health-sector reform & AMO rollout: +376% in three years.

  
  

SGTM is now strategically positioned at the core of Morocco’s “Programme National d’Infrastructure 2030”, implying the same structural forces may drive its long-term share-price trajectory.

The investment case rests on three pillars emphasized by Attijari Global Research:

1. SGTM operates in the most favorable macro and sector climate in decades, with Morocco projected to cross the +4.5% GDP growth threshold over the medium term — a historic first.

2. Public investment enters an unprecedented super-cycle through 2030, averaging MAD 350 billion per year in 2024–2026, +60% higher than recent norms. Investment spending now represents ~21% of GDP (vs. 16% historically).

3. Construction demand accelerates sharply, reflected in the strongest cement-consumption growth profile in over a decade: +8–9% CAGR expected 2025E–2028E, versus only +0.1% CAGR over 2019–2024.

Given SGTM’s track record and sector breadth, analysts argue the group is structurally positioned to capture a dominant share of this investment wave.

2. The Offering — A Market-Defining Transaction

Offer Size & Structure

• Offer amount: ~MAD 5.0 billion

• Shares offered: 12,000,000 shares, representing 20% of the company

• Seller: The Kabbaj family

• Post-IPO free float: 20%

• Second-largest IPO on the Moroccan exchange in two decades

Pricing by investor category

• Employees & retirees (Order I): MAD 340

• General investors without minimum (Order II): MAD 380

• Investors with minimum subscription of MAD 5m (Order III): MAD 420

• Qualified Moroccan & foreign institutions (Order IV): MAD 420

  
  

Sector impact on BVC

This single IPO materially shifts the market structure:

• The construction sector’s capitalization weight rises from 6.0% to 8.3% after the IPO.

• It becomes one of the top three sectors on the Casablanca Stock Exchange, just behind Telecoms.

  
  

Performance momentum already visible

Since Morocco announced co-hosting the 2030 World Cup (October 2023), the BTP sector index has surged +330%, versus +60% for the MASI. SGTM enters the market in a deeply favorable sentiment window.

3. SGTM’s Business Model — Full-Chain Integration Across All High-Value Segments

SGTM is not a mono-segment contractor.

It is an integrated infrastructure group operating across five major verticals:

1. Tertiary Buildings (37% of revenue 2022–2024)

   
   

   • UM6P universities (Rabat & Benguerir)

   • Maroc Telecom headquarters

2. 
   

3. Dams & Hydraulic Infrastructure (22%)

   
   

   • Sebou–Bouregreg “water highway”

   • Abdelmoumen Dam

4. 
   

5. Maritime & Fluvial Works (17%)

   
   

   • Nador West Med

   • Dakhla Atlantique

6. 
   

7. Industrial, Energy & Mining Infrastructure (16%)

   
   

   • OCP phosphoric-acid units

   • Logistics platforms

   • Data centers

8. 
   

9. Transport Infrastructure & Structures (8%)

   
   

   • High-complexity bridges, roads, tunnels

   • LGV Al Boraq (Tangier–Kenitra)

   • Major stadiums

     
     
10. 
    

Two competitive differentiators

1. Fast-Track Construction Model

   
   

   SGTM has the capacity to compress project calendars — critical for Morocco’s 2025 AFCON and 2030 World Cup deadlines.

   
   

   • Example: renovation + expansion of Moulay Abdellah Stadium in 14 months.

2. 
   

3. Turnkey EPC+ delivery

   
   

   SGTM climbs the value chain with “clé-en-main” integrated delivery: civil engineering + mechanical assembly + technological process integration.

   
   

   The Novacim cement plant is presented as flagship example.

   
   

This positioning enables SGTM to consistently win strategic, large-scale, complex projects that few regional players can execute.

4. Macro & Sector Tailwinds — A Historic Acceleration of Morocco’s Construction Demand

1. GDP Growth Breaks a New Ceiling

Morocco is expected to sustain GDP growth above 4.5% for the first time in its modern economic history (2025E–2027E).

2. Public Investment Super-Cycle (2024–2030)

• MAD 350 billion average annual public investment (2024–2026E)

• Public capex now 21% of GDP (historical avg ≈ 16%)

• Focus areas: infrastructure, energy transition, water security, health, education

  
  

3. Cement Consumption — A Structural Inflection Point

Cement volumes are a direct proxy for construction activity.

After a decade of stagnation (2015–2024 CAGR = –0.4%), consumption is set to grow:

• +8% to +9% CAGR from 2025E–2028E

• Double GDP growth rate

  
  

Given SGTM’s historical correlation with domestic cement demand and its national leadership, the note sees high probability of outperformance versus sector averages.

5. A Conservative Business Plan — With High Likelihood of Outperformance

Attijari’s analysts repeatedly state that SGTM’s management has adopted a deliberately conservative Business Plan (BP).

Revenue trajectory

• 2022–2025E revenue CAGR: +17.6%

• 2025E–2031E revenue CAGR: +5.5% (significantly lower, by design)

  
  

Yet analysts argue SGTM can exceed these forecasts, backed by:

• The macro tailwinds described above

• A pipeline of national projects exceeding MAD 1 trillion by 2030 (bank-estimated) — equivalent to the entire outstanding banking credit to the economy in 2024

  
  

6. Key Forecasts 2025E–2028E — High Growth, High Margins, Strong Cash Generation

Revenue (MAD millions)

• 2025E: 14,297

• 2026E: 15,191

• 2027E: 17,055

• 2028E: 17,756

  
  

  (CAGR 2025E–2028E: +7.5%)

EBITDA (EBE) & Margin

• Margin stable at 16.9% through 2025E–2028E

• EBITDA grows from 2,419m (2025E) to 3,004m (2028E)

Net Income

• 2025E: 1,096m

• 2026E: 1,378m

• 2027E: 1,597m

• 2028E: 1,710m

  
  

  (CAGR 2025E–2028E: +16.0%)

Balance Sheet & Liquidity

• Working-capital requirement (WCR): ~21% of revenue

• Net debt: expected to turn negative from 2028E (vs. MAD 832m in 2024)

This combination — growing revenue, stable high margins, and declining leverage — is extremely attractive for equity investors.

7. Valuation — Conservative Multiples with Clear Upside

At the subscription price of MAD 420, the report highlights:

Price-Earnings Ratio (P/E)

• Average 2026E–2028E P/E: 16.3x

• This reflects a 19% discount to the MASI normative P/E (20x)

• Supported by +16.2% average EPS growth over the same horizon

Dividend Yield

• Dividend yield crosses 4.0% by 2028E

• This is superior to the MASI average (<3%) and above the 5-year BDT benchmark yield (2.68%)

• SGTM’s long-term payout: 60% of distributable earnings

These metrics are well aligned with global benchmarks for high-quality infrastructure EPC operators.

8. The Strategic Case for Foreign Investors

1. Massive Visibility of Future Revenues

With a pipeline exceeding MAD 1 trillion in identified national investment projects and SGTM’s dominant positioning, revenue visibility is among the highest in the African construction universe.

2. Exposure to Morocco’s 2030 Mega-Cycle

Energy transition, water resilience, logistics ports, sports infrastructure for the 2030 World Cup, and industrial acceleration programs create one of Africa’s strongest multi-year construction cycles.

3. Market-Defining Scale & Execution Track Record

SGTM has delivered complex EPC and fast-track projects unmatched by most regional competitors.

4. Strong Profitability & Cash Conversion

Stable 17% EBITDA margins, rising net income, and deleveraging to net cash by 2028E.

5. Attractive Dividend & Valuation Case

Dividend yield and P/E discount provide a favorable entry point.

6. High Probability of BP Outperformance

Analysts explicitly indicate that SGTM’s Business Plan is conservative and likely to be exceeded.

9. Risks (per the report)

• Macroeconomic and sector cyclicality

• Project execution and delivery timelines

• Input-cost inflation

• Working-capital swings

• Dependence on public procurement dynamics

• Regulatory, fiscal, and financing conditions

These are standard for large EPC/construction operators.

10. Conclusion — SGTM Emerges as a Moroccan Infrastructure Flagship for Global Markets

SGTM enters the Casablanca Stock Exchange as a national champion, backed by:

• Historic public-investment momentum

• A diversified, high-value-added infrastructure portfolio

• Strong financial fundamentals and cash generation

• A discount to market valuation norms

• A robust dividend profile

• One of the strongest macro backdrops in North Africa

Attijari Global Research issues a clear recommendation: SUBSCRIBE.

SGTM is well positioned to become one of Morocco’s benchmark listed infrastructure equities over the 2025–2030 horizon.