Bireme Capital's Evan Tindell on growth tailwinds for African Telecom - Airtel Africa $AAF.L

Jul 21, 2023

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INSIGHT

Airtel's Growth vs. Low Valuation

Airtel Africa benefits from strong growth tailwinds like population and data penetration growth in Africa.
Despite this, it trades at a low valuation, making it an attractive telecom investment.

INSIGHT

Mobile Money's Value Potential

The mobile money unit of Airtel Africa is rapidly growing and crucial to overall value.
It has attracted significant investments and could be IPO'd soon, revealing hidden value.

INSIGHT

Currency Risk and Price Regulation

Currency depreciation is a significant risk but price regulation and inflation allow Airtel to raise prices in local currencies.
This regulation offers a partial hedge against deflationary data pricing and currency weakness.

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Evan Tindell, CIO of Bireme Capital, joins Yet Another Value Podcast today to share his thesis on Airtel Africa Plc (LSE: AAF), a leading provider of telecommunications and mobile money services, with a presence in 14 countries in Africa, primarily in East Africa and Central and West Africa.

For more information about Bireme Capital, please visit: https://www.biremecapital.com/

Evan's Tweet thread on Airtel Africa: https://twitter.com/evantindell/status/1666503901229580291

Evan's blog post on his Airtel Africa thesis: https://www.biremecapital.com/cio-corner/airtel-africa

Chapters:

[0:00] Introduction + Episode sponsor: Stream by Alphasense

[1:57] What is Airtel Africa $AAF.L and why is it interesting?

[5:55] $AAF.L mobile money business

[11:17] Spin-off IPO of mobile money business

[12:47] $AAF.L risks

[15:53] $AAF.L current valuation[20:15] Currency risk

[24:04] $AAF.L Political risk / history of nationalization / tax on mobile payments

[34:20] $AAF.L business model risk (being the T-Mobile in their markets

[37:37] Airtel Africa vs. MTN Group

[40:23] $AAF.L controlling shareholder - Bharti Airtel

[45:47] Understanding emerging market economies and price sensitivity amongst consumers

[48:56] $AAF.L product diversification risk

[55:33] $AAF.L "no one cares" valuation risk

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