Is the stock of MTN Ghana a buy, hold or sell? Though this presentation is situated in 2023, it gives insight into what makes MTN Ghana a stock to buy and hold.

1. GOLDCOAST CAPITAL
GHANA | OCTOBER 2023
Sep 29, 2023, Close: GHS 1.40 1 year target price: GHS1.70 Upside: 21.68% Recommendation: BUY
GHANA STOCK EXCHANGE COMPETITION
MTNGH

2. 16/16
Regions
Covered
1994
1996
1998
2005
2008
2009
2015
2016
2018
2020
Incorporation
as Scancom ltd
Launched First
prepaid service in
Ghana
Rebrand to MTNGH &
First Telco to set up
foundation in Ghana
First to reach
15M subscribers
IPO & First and only
telco listed on GSE
Spacefon tradename &
First to introduce GSM
Areeba Tradename,
MTN acquired
Scancom & achieved
2.5M subscribers
First to launch mobile
money & introduce 3G
commercial service
First to launch
4G services
First company in the
world to use mobile
money to buy shares
15M
subs
4G
Selorm
Adadevoh
CEO
+Board Chair
4.9 Years
Tenure
13.24bn Shares
in company
27.3 Million
SUBSCRIBERS
Voice Mobile Data
Mobile Money
PRODUCTS
45%
55%
Urban Rural
Company Overview
GHS 18.53 bn
Market Cap
GHS 9.92bn
Total
Revenue
1,185
# of
employees

3. Company Financials: Revenue and Profitability
Source : MTN Reports, Team Analysis All figures are in Ghana Cedis
0.1
0.12
0.13
Return on Assets
2020 2021 2022
0.09
0.12
0.15
Return on Equity
0
2000000
4000000
6000000
8000000
10000000
12000000
2017 2018 2019 2020 2021 2022
Revenue and Net Profit
Revenue Profit after income tax
Unprecedented revenue explosion and improved cost-efficiency laying foundation for future success

4. 42.61%
09/2020
06/2020
03/2020
12/2019
09/2019
0.067
0.082
0.113
0.163
0.232
0.05
0.06
0.08
0.12
0.16
2018 2019 2020 2021 2022
Market Value Ratios
Earnings per share Dividend per share
Company Financials: Shareholders’ Compensation
Source : MTN Reports, Team Analysis All figures are in Ghana Cedis
High ROE + High EPS + Consistent Dividend Payments = Maximized Shareholders’ Returns (Dividend payout ratio surpassing 70% across all years)

5. 42.61%
-15.00%
-10.00%
-5.00%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
09/2023
06/2023
03/2023
12/2022
09/2022
06/2022
03/2022
12/2021
09/2021
06/2021
03/2021
12/2020
09/2020
06/2020
03/2020
12/2019
09/2019
MTN Return GSE-CI Return
Company Financials: Shareholders’ Compensation
Source : MTN Reports, Team Analysis
MTN Ghana outperforms the benchmark (GSE-CI) year on year

6. 0.96
1.04 1.05
Current Ratio
2020 2021 2022
0.08
0.09
0.11
Cash Ratio
2020 2021 2022
3.26
3.02
2.86
Debt/Equity Ratio
2020 2021 2022
A+
Implied Rating
0.0
Proba
De
Company Financials: Liquidity and Leverage
Source : MTN Reports, Refinitiv, Team Analysis All figures are in Ghana Cedis
Higher ability to pay short-term debts as they fall due

7. 6
1.04 1.05
Current Ratio
0 2021 2022
0.09
0.11
Cash Ratio
0 2021 2022
3.26
3.02
2.86
Debt/Equity Ratio
2020 2021 2022
A+
Implied Rating
0.05%
Probability of
Default
Company Financials: Liquidity and Leverage
Source : MTN Reports, Refinitiv, Team Analysis All figures are in Ghana Cedis
Less reliance on debt to finance its operations

8. ESG FOCUS TOPICS
Source : MTN Reports, News

9. ESG FOCUS TOPICS
Source : MTN Reports, News

10. ESG FOCUS TOPICS
Source : MTN Reports, News

11. 4.64%
4.59%
1.7%
3.0%
Unemployment Rate GDP Rate
Source : GSS, World Bank Indicator, Bloomberg
Pre-Covid Post Covid
Large capital outflows coupled
with high inflation
External economic
shocks
Economic Analysis: GDP Growth Rate and Unemployment
Ghana’s economic recovery after the pandemic was stifled by inflation hikes as real GDP growth fell by 63.66% from 2021 and it's projected to further fall by 48.48% by the end of 2023 and
recover by 43.3% in 2024 as unemployment remain relatively stable .
All figures are in Ghana Cedis

12. IMF approves $600 million
deal
Ghana receives first
tranche of IMF support Reduced food prices
Economic Analysis: Inflation Rate and Monetary Policy Rate
Inflation skyrocketed after the pandemic but has since eased as inflation reduced by a record year to date low of 200bps in September which is reflected by the relatively stable Policy
rate.
Currency depreciation
Source : GSS, World Bank Indicators ,Bloomberg All figures are in Ghana Cedis
Pre-Covid Post Covid

13. 21% 20% 19%
20% 18%
14%
2% 2% 1%
57% 59%
66%
2020 2021 2022
Voice
12% 14% 14%
15% 15% 12%
1% 2% 1%
72% 69% 73%
2020 2021 2022
Data
Vodafone AirtelTigo Glo MTN
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.90
1.00
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Average Revenue Per User
Forecast
SIM Blockage
Industry Analysis: Market Share
The Ghana telecom sector houses 4 main players with a growing ARPU all competing for market share with MTN being highly dominant.
Source : MTN Reports, Team Analysis, NCA All figures are in Ghana Cedis

14. Potential Market Tailwinds
16.99
0
5
10
15
20
2017 2018 2019 2020 2021 2022
Internet Users (In Millions)
73%
Youthful Population
$183M
Rural Telephone & Digital Inclusion
Project
$300M
Smart City Project
Exciting Demographic Opportunity
Increased Government Investment In
Digital Inclusion
Source : MTN Reports, Team Analysis All figures are in Ghana Cedis
Technological advancement

15. Market Headwinds
Source : MTN Reports, Bank of Ghana, Team Analysis All figures are in Ghana Cedis
The 1.75% levy on electronic transaction caused MoMo transactions and Value to fall by 7.5% and 3% respectively from March to June 2022
Value of Mobile Money Transactions Volume of Mobile Money Transactions

16. Industry Analysis: Porters’ 5 Forces
0
1
2
3
4
5
Supplier Power
Buyer Power
Competitive
Rivalry
Threat of New
Entry
Threat of
Substitutes
Score
 Foreign companies are the suppliers of inputs for the sector operators.
 These are highly established companies with high reputation for quality
over competitors.
 There are several networks providing similar services for
consumers to buy
 MTN however has a larger customer base & coverage
compared to the rest
 MTN also provides better quality service
 There are several operators providing similar services
 One operator however has a stronger competitive power in pricing,
coverage and quality of service.
 The sector is a very capital intensive
 Requires consistent investment to ensure operators are up to date.
 Ghana’s combined telecom investment is estimated at $20 billion
Source : MTN Reports, Team Analysis
 Operators offer similar services with little variations in
offers and pricing. .
 The suppliers are also involved in managing operators' base stations
 These companies are also solely responsible for the installation of inputs.

17. Source : MTN Reports, Team Analysis
Investment Thesis: Economic moat unlocks higher earnings potential
MTN Ghana’s Extensive Coverage Network and Market Dominance Drives Revenue and Subscriber Growth

18. Investment Thesis: Consistent and cosmic financial performance maximizes financial returns
Source : MTN Reports, Team Analysis All figures are in Ghana Cedis
MTN Ghana’s robust earnings and steady earning per share will provide for increased dividend payment
CAGR = 19.14%
Actual Forecast

19. Source : MTN Reports, Team Analysis All figures are in Ghana Cedis
Investment Thesis: Commitment to innovation driving long-term competitive advantage
MTN Ghana’s position as the leading telecommunication firm stems from its extensive Capex

20. Investment Risks
Source : MTN Reports, Team Analysis
Low Medium High
Low
Medium
High
Probability
Impact
We recognize key downside risks to our BUY recommendation
Market Related Risk
Industry Related Risk
Company Related Risk
• Inflation
• Interest rate risk
• Competition risk
• Regulation risk
• Technology risk
• Taxation risk
Inflation
risk
Interest
rate
Regulation
Technology
Taxation
Competition

21. DCF TARGET : GHS 1.72
After –tax cost of Debt
22.44%
Cost of Equity
21.56%
WACC
21.93%
Terminal Growth
3.1%
UPSIDE: 23.18%
Sensitivity Analysis
WACC
Growth
Rate
Valuation: Discounted Cashflow
Source : MTN Reports, Team Analysis

22. GHS 1.18
-15.96%
GHS 2.32
65.39%
GHS 1.72
22.82%
Scenario Analysis
DCF ASSUMPTIONS BEAR BULL
Total Revenue -5% +5%
Direct Networking Operating Cost +3% -3%
Operational Expense +3% -3%
Terminal Growth 2.10% 4.10%
WACC 26.93% 16.93%
Source : MTN Reports, Team Analysis

23. VALUATION
Cost of Equity
21.56%
IMPLIED PRICE: GHS 1.68
Terminal Growth
3.1%
UPSIDE: 20.71%
Rising dividend per share indicating future growth prospects
Valuation: 2-Stage Dividend Discount Model
Target: 60% - 80%
Source : MTN Reports, Team Analysis All figures are in Ghana Cedis

24. Valuation: Relative Valuation
Source : Refinitiv, Team Analysis
The relative valuation supports our buy recommendation

25. Valuation: Weighted Price
Source : MTN Reports, Team Analysis
Football Field Chart
Implied Price Weightings

26. Target Price: GHS 1.70
21.86% Upside
1 Year Target
Goldcoast Capital | GSE Competition 2023
Summary
BUY
Economic moat unlocks higher
earnings potential
Consistent and cosmic financial
performance maximizes financial returns
Commitment to innovation driving long-
term competitive advantage
10x

27. Goldcoast Capital | GSE Competition 2023
THANK YOU

28. Goldcoast Capital | GSE Competition 2023
Appendices
Financials: Income Statement
Financials: Balance Sheet
Discounted Cashflow
WACC
BETA
Dividend Discount Model
DCF: Bear Case
DCF: Bull Case
1.
2.
3.
4.
5.
6.
7.
8.
Scenario Analysis
Assumptions: SOFP
Assumptions: SOCI 1
Assumptions: SOCI 2
9.
10.
11.
12.

29. Discounted Cashflow

30. 2-Stage Dividend Discount Model

31. DCF : Bear Case

32. DCF: Bull Case

33. 2018 2019 2020 2021 2022
Debt
Pre-tax cost of debt 15.40% 44.12% 42.50% 34.05% 24.20% 32.06%
Proportion of Debt 42.06%
Tax rate 30.00%
After-tax Cost of debt 22.44%
Cost of Equity 19.67%
Beta 1.75
MTN Return (Ri) 20.21%
GSE-CI (Rm) 20.13%
Risk free (Rf) 20.75%
WACC
Weight of Equity 57.94%
Weight of Debt 42.06%
Cost of Equity 21.56%
After-tax Cost of Debt 22.44%
WACC 21.93%
Cost of Capital
WACC
Weighted Average of Equity
CAPM: Rf + b(Rm-Rf)
Weighted Average of After-tax
Cost of Debt
+
5-Year Ghana Governemtn
Bond

34. BETA
Cov. of Stock and Market
Var. of the Market

35. Financial Statements: Income Statement

36. Financial Statements: Balance Sheet

37. SOFP Assumptions

38. SOCI Assumptions
17-18 18-19 19-20 20-21 21-22 Trend 18-22
Revenue 23.23% 22.83% 16.4 3% 28.01% 28.39% 135.04 %
Other incom e
Direct netw ork operating costs 20.06%
Transm ission costs 12.81% -57.03% 18.96% 17.74% 2.75% -38.16%
Netw ork m aintenance costs 42.77% 21.80% 23.08% 24.62% 17.30% 119.15%
Leased lines costs 26.24% 46.03% 56.86% -5.45% 139.41% 418.53%
Spectrum and regulatory fees 4.10% 15.86% 11.01% 22.94% 32.39% 109.34%
Cost of handsets and other accessories -7.10% 13.29% -6.17% 57.01% -54.15% -23.48%
Interconnect and roam ing costs 14.32% -25.96% -5.44% 15.52% 34.57% 8.84%
Interconnect costs 13.65% -25.90% -7.29% 21.77% 25.85% 5.28%
Roam ing costs 24.41% -26.82% 20.28% -51.42% 268.67% 57.66%
Em ployee benefit expenses 17.65% 22.91% 15.23% -0.31% 55.42% 119.44%
Selling, distribution and m arketing expenses 32.20% 16.38% 11.57% 25.13% 11.86% 81.73%
Expenses incurred in respect of value added services (VAS) -5.60% 10.05% -55.06% 44.90% 58.04% 13.26%
Dealer com m issions 42.81% 3.58% 6.48% -4.36% 27.11% 34.08%
Mobile m oney com m issions 37.72% 30.27% 40.76% 32.79% -0.63% 141.95%
Marketing and adverstising expenses 56.51% 9.32% -6.67% 39.31% 25.24% 77.99%
Operating expenses 119.08% 34.44% 17.90% 17.31% 76.18% 227.60%
General expenses 81.14% 26.97% 10.43% 143.62% 75.89% 500.81%
Managem ent fees # DIV/0! 47.55% 39.21% -6.26% 56.49% 201.32%
Pow er, m aintenance and security costs -16.18% 68.75% -13.54% -35.94% 54.73% 44.61%
Im pairm ent of trade receivables -77.55% 167.97% -58.84% 107.16% 469.45% 1201.11%
Travel and entertainm ent 37.13% 48.76% -42.48% 5.51% 76.54% 59.38%
MTN found expenses 8.84% 28.67% 42.25% 43.65% 41.02% 270.78%
Outsourced expenses non-netw ork 15.06% 28.12% 3.60% -38.76% 209.78% 151.81%
Secretarial fees
Lease paym ent non-netw ork 51.04% -98.59% -100.00%
EBITDA 16.52% 65.68% 20.82% 34.33% 30.32% 250.44%
Depreciation 29.47% 83.39% 6.76% 16.90% 17.44% 168.80%
Am ortisation 25.72% 23.51% 28.42% 24.53% 6.52% 110.41%
Operating profit 12.11% 62.70% 25.80% 40.56% 34.98% 288.32%
Finance incom e 51.02% 1.43% 55.29% -33.89% 161.33% 172.10%
Finance costs 67.26% 283.45% -3.26% -0.72% 6.85% 293.51%
Profit before incom e tax 10.05% 33.75% 36.67% 45.42% 42.80% 279.59%
National fiscal stabilisation levy 8.43% 33.75% 36.68% 42.65% 46.83% 282.88%
Incom e tax expense 27.38% 34.26% 31.92% 47.45% 46.36% 282.22%
Profit after incom e tax 5.03% 33.56% 38.39% 4 4 .91% 4 1.28% 278.4 1%
YOY Growth

39. SOCI Assumptions