Bulls n Bears:::: On A Date with On a Date with African Sun

Tue Oct 11 07:35:07 CAT 2022

On A Date with On a Date with African Sun 

#1. History 

1904, Cecil John Rhodes is hard at work to bring his ambitious plan to
reality

The plan is to build a railway line from Cape, SA to Cairo, Egypt

Part of the enabling infrastructure is constructing Victoria Falls Hotel to
accommodate workers.

1951, an expert trout fisherman Herbert Macllwaine opens Troutbeck Resort in
Nyanga

South African Breweries (SAB) sell its Rhodesia and Nyasaland business to
Rhodesia Breweries (RB) 

RB purchase included SAB hotels resulting in formation of a hotel unit

1968, Stable Hotels is set up to operate RB hotels in Southern Rhodesia

1970, Emerged Railway Properties a company owned by NRZ and Zambia Railways
leases Vic Falls Hotel

1974, Monomotapa, Hwange Safari Lodge, Caribbean Bay and Elephant Hills are
opened.

Meikles Hotel is demolished and 2 years later a new hotel is opened,
operated by Southern Sun Hotel (SSH).

1979, Meikles Southern Sun Hotels (MSSH) is born out of SSH becoming the
largest hotel chain operator in Rhodesia.

1980, MSSH becomes Zimsun.

1990, Zimsun which is owned by RB now Delta Beverages Corporation is listed
on the ZSE. 

1991, Holiday Inn a brand of InterContinental Hotel Group (IHG) is
introduced in Zimbabwe

IHG is a British based multinational hospitality company. 2000, Eversharp
formerly owned by Randall Holdings is acquired by Trans Zambezi Industries
(TZI).

2001, Beachmont Trading changes its name to ART and is de-merged from TZI.

2002, Delta seeks to concentrate on core businesses thereby offloads Zimsun
a non-core business.

2003, Dawn Properties (DP) is unbundled from Zimsun. Zimsun becomes a major
tenant of DP.

2008, Zimsun rebrands to African Sun as it moves in Africa markets.

2015, African Sun moves out of foreign markets to focus on Zimbabwe.

2021, DP shareholders are issued African Sun shares to facilitate buyout.

2022, African Sun loses The Kingdom at Victoria Falls as the owner First
Capital Bank wants a shorter lease.

#2. Operations,

A hotel asset management company headquartered in Harare, Zimbabwe.

Operates company owned properties and third party properties.

3 distinct subsidiaries for,

. Hotel operations

. Central Reservation 

. Property management

Hotel Operations,

. 11 hotels 

. 1803 rooms

. 7482 conference capacity

. 21 restaurants

The subsidiary divides the hotels into 4 divisions,

City & Country Hotels

. Holiday Inn

. Monomotapa

. Troutbeck Resort 

Partnerships

. Victoria Falls Hotel

Resort Hotels

. Elephant Hills Resort

. The Kingdom at Victoria Falls

. Hwange Safari Lodge

. Caribbea Bay

. Great Zimbabwe

Sun Leisure, complementary unit which focuses on gaming and ground handling
activities 

. Tours

. Casinos

Central Reservations

According to the group structure there is African Sun Limited Branch

The subsidiary's primary purpose is servicing foreign guests into the
group's hotels.

Property

DP owns the group's real estate and manage the properties

#3. Competitors,

Tourism and hospitality industry highly competitive. African Sun is
significant player

Key competitors 

. ASB Hospitality based in Dubai owner of the Meikles Hotel

. Rainbow Tourism Group owner of Rainbow Towers, New Ambassador Hotel,
A'Zambezi River Lodge 

. Masawara owned Cresta Hotels owner of Cresta Jameson, Sprayview, Oasis. 

. Nesbitt Hospitality Group which owns N1 hotels in Harare, Bulawayo and Vic
Falls.

. Briolette Services owner of Montclair Hotel and Casino.

. Palm River Hotel

. Dzimbahwe

#4. Shareholding,

62.72% of African Sun is controlled by Brainworks Hotels. 

According to the 2021 annual report there was a significant issuing of new
African Sun shares.

The share issue was to facilitate the purchase of Dawn Properties.

#5. Management,

Peter Saungweme - CEO

Appointed on the 3rd of January 2022. A former CEO of Arden Capital
(formerly Brainworks Capital).

This makes him to be familiar with the business since he could see it from
an investor point view.

A chartered accountant.

Spent time as a Financial Controller at Ecobank Zimbabwe.

Chief Financial Officer at Cell Holdings a short term insurer and medical
insurance.

His task will be to transform African Sun into a resilient business after
COVID-19.

#6. Pitch

Benefiting from synergies created by bundling with Dawn Properties. 

Relaxation of covid-19 restrictions thereby facilitating movement of
tourists from source markets namely UK, USA, Europe and China.

The conference business has also ramped up and occupancies are rising
significantly.

Foreign currency retention rates improved.

#7. ZSE Trading Statistics

ZWL18.12 (USc2.92 @Interbank Rate) per share as at 10/10/2022.

6.4 ZWL per share on the 4th of January 2022.

182.1% YTD Gain vs ZSE ALSI @22.33% YTD

6th on the @ZSE_ZW ranking in terms of year to date movements.

21st most traded stock over the past 3 months to Sept 30

1,423,517,220 issued shares.

ZWL26.8bn market cap (US$43.19m @ZWL620/interbank rate) as at 10/10/ 2022

Anecdotes: African Sun once had a dream for being a US$1bn market cap
company premised on having 10,000 rooms under management. That bit included
forays into Africa, a strategy which has taken a back seat.but who
knows.dreams tend to be re-lived once in a while

Each week will be on a DATE with a company listed on the ZSE with Martin
Mataga an Investment Democrat. Twitter @MartinMataga. 

The purpose of this thread is to assist investors to have a minimum
appreciation of listed firms. Bulls n Bears has made reasonable effort to
validate and update the information before circulation but the onus is on
the investor consult their financial advisor.

Disclaimer: Do not misconstrue this thread as investment advice. DATE
companies before you buy their shares.

For comments and questions reply to bulls at bullszimbabwe.com

Invest Wisely!

Bulls n Bears 

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