Mobily
Etihad Etisalat Company Telecom – Industrial EEC AB: Saudi Arabia 17 July 2013
US$16.94bn Market cap
Target price Consensus price Current price
55%
US$17.70mn
Free float
Avg. daily volume
80.70 89.27 82.50
-2.2% over current 8.1% over current as at 16/7/2013
Existing rating Underweight
Research Department Mazhar Khan, Tel +966 11 211 9248, [email protected]
Mobily
Neutral
Overweight
Margin improvement - key positive in Q2
Overweight
Flash View is an analyst’s preliminary interpretation of a results announcement or the impact of a major event. Our investment rating and earnings estimates are not being changed in this report. Any formal changes to our investment rating or earnings estimates will be made in a subsequent report, which may differ from the preliminary views expressed here.
Mobily reported its second quarter results yesterday with net profit rising by 13% y-o-y to SAR1.61bn, and which was also 6% above our forecast. Nevertheless, the company’s revenue grew only by a modest 5%, probably due to absence of any major smart phone release in Q2, and seasonality. One key positive from the result is a marked improvement in EBITDA and operating margins, increasing by 400bps and 190bps respectively. With Mobily’s increased focus on corporate segment, we expect the company’s growth momentum to continue in the next few years. We are currently Overweight on the stock, and will update our valuation once the detailed results are published.
Performance
Modest growth in revenues: Mobily reported a 5% y-o-y growth in revenues (SAR5.9bn) for Q2, mainly due to data and prepaid segments. Data services contributed 28% of the total revenues in 1H as against 25% during last year. Although modest, we believe that the revenue growth is reasonable, as Q2 is traditionally a low season.
Subdued gross profit growth, operating profit improved on efficiency: The company’s gross profit grew by only 1% despite a 5% growth in revenues, which indicates falling margins on data/voice services. On the other hand, better control on selling costs resulted in a 12.5% increase in operating profit.
Net profit: Mobily’s Q2 net profit increased 13% y-o-y to reach SAR1.61bn, beating our SAR1.56bn estimate by 5.7%. Overall, we believe that a decline in SG&A and interest costs resulted in a robust growth in the bottom-line.
Margin improvement key positive: One key positive this quarter is the marked improvement in EBITDA and net margins. The company’s EBITDA margin improved by 400bps y-o-y to 39.0% in Q2; which we believe is largely due to a strict control over selling costs, which remain close to 15% of sales. Consequently, the net income margin also improved by around 200bps y-o-y during Q2. It is worth highlighting that telecom companies are facing margin pressure, mainly due to low cost smart phones and falling tariffs.
Conclusion: Mobily has increased its focus on the corporate segment, which was highlighted by its recent announcements stating investments in various projects. With its increased focus on the corporate sector and cost savings, we believe that the company can sustain its healthy bottom-line growth for another couple of years.
Flash view
Vol mn
RSI10
Price Close
MAV10
86 81 76 71 66 61 56 70 30 6 -10
136 129 121 114 106 99 91
4
2 07/12
10/12
01/13
04/13
Source: Bloomberg
Earnings Period End (SAR)
12/12A
12/13E
12/14E
12/15E
Revenue (mn)
23,642
26,082
28,433
31,050
Revenue Growth
17.9%
10.3%
EBITDA (mn)
8,591
9,557
EBITDA Growth
15.2%
11.2%
7.82
9.02
EPS
EPS Growth 18.4% 15.4% Source: Company data, Al Rajhi Capital
9.0% 10,462 9.5% 10.44 15.8%
9.2% 11,768 12.5% 11.44 9.6%
Valuation
EV/Sales (x) 3.0 2.5
2.0 1.5
Figure 1 Mobily : Summary of Q2 2013 results
1.0
SAR (mn)
0.5
Revenue
5,678
5,628
EBITDA
2,039
1,975
EBITDA Margin
35.9%
Net Profit
1,421
0.0 01/10
01/11
01/12
Source: Company data, Al Rajhi Capital
01/13
Q2 2012
Q1 2013
Q2 2013
y-o-y
q-o-q
5.2%
6.1%
6,480
n.a
n.a.
n.a.
2,326
35.1%
39.0%
308 bps
391 bps
35.9%
8.6%
1,340
1,611
13.4%
20.3%
1,525
5.7%
5,972
ARC est. Variance -7.8% n.a.
Source: Company data, Al Rajhi Capital
Disclosures Please refer to the important disclosures at the back of this report. Powered by Enhanced Datasystems’ EFA Platform
1
Zain KSA
Telecom – Industrial ZAINKSA AB: Saudi Arabia 17 July 2013
US$2.851bn Market cap
Target price Consensus price Current price
48%
US$55.99mn
Free float
Avg. daily volume
10.00 8.59 9.80
2.0% over current -12.3% over current as at 16/7/2013
Existing rating Underweight
Overweight
Neutral
Neutral
Flash view Flash View is an analyst’s preliminary interpretation of a results announcement or the impact of a major event. Our investment rating and earnings estimates are not being changed in this report. Any formal changes to our investment rating or earnings estimates will be made in a subsequent report, which may differ from the preliminary views expressed here.
Price Close
114 104 94 84 74 64 54
RSI10
12
Vol mn
Zain KSA announced its Q2 results yesterday reporting a revenue growth of only 5% y-o-y, and which was 7% below our estimate. However, a 21% y-o-y decline in finance costs, resulted in lower net losses of SAR370mn for the quarter, better than our SAR380mn loss estimate. The government’s decision to defer Zain’s payment of annual license fees should improve the company’s operating cash flows, and provide more flexibility to negotiate a better longterm debt restructuring deal with lenders. However, subdued top line growth remains our key concern, and accordingly, we maintain our Neutral rating.
07/12
Above
In Line
Below
Earnings estimates
Up
No Change
Down
Dividend estimates
Up
No Change
Down
Recommendation
Upgrade
No Change
Downgrade
Long term view
Stronger
Confirmed
Weaker
Likely impact:
MAV10
17
50
Zain KSA Results in line, but muted
Earnings vs. our forecast
Performance
7 70 30 100 -10
Research Department Mazhar Khan, Tel +966 11 2119248, [email protected]
10/12
01/13
Revenues: Zain reported SAR1,706mn in Q2 revenue, a modest 5% y-o-y increase.
Gross and Operating Profit: The company’s Q2 gross profit came in at SAR831mn, whereas it reported an operating loss of 206mn for the quarter.
Net profit: Zain reported a net loss of SAR370mn for the quarter, compared to our expectation of a SAR380mn loss. This was an improvement from the SAR394mn loss in Q2 2012, mainly benefiting from a 21% y-o-y decline in finance costs.
Key takeaways from results and recent events: 1) Finance costs declined 21% y-o-y to SAR174mn; 2) Completion of restructuring of its SAR2.25bn loan, thereby extending its maturity till June 2016; 3) The deferment of annual license fees by the MOF (SAR5.6bn) improving the company’s operating cash flows, and thus providing more comfort for debt holders.
Conclusion: Overall, the results contained no surprises and were muted considering the 5% growth in revenues. Our key concerns for Zain (weak balance sheet carrying high debt, low capex due to cash crunch in the business and eroding capital due to continuing losses) remain, as the company has to resolve its short-term refinancing issues to focus on revenue generating efforts.
04/13
Source: Bloomberg
Earnings Period End (SAR)
12/12E
12/13E
12/14E
12/15E
Revenue (mn)
6,404
7,220
7,747
8,317
Revenue Growth
-4.4%
12.7%
879
1,011
1,309
1,560
EBITDA Growth
-2.2%
15.1%
29.5%
19.1%
EPS
(1.25)
(1.06)
(0.88)
(0.63)
EPS Growth -9.1% -15.5% Source: Company data, Al Rajhi Capital
-16.6%
-28.8%
EBITDA (mn)
7.3%
7.4%
Valuation
EV/Sales (x) 9 8
7 6 5 4 3
Figure 1 Zain KSA : Summary of Q2 2013 results
2 1
SAR (mn)
0
Revenue
01/10
01/11
01/12
Source: Company data, Al Rajhi Capital
01/13
Q2 2012
Q1 2013
y-o-y
q-o-q
4.7%
-4.3%
1,832
831
17.5%
7.1%
801
4%
43.6%
48.7%
12.2%
11.8%
44.1%
10%
(174)
(233)
(206)
18.4%
-11.6%
(207)
0%
(394)
(398)
(370)
-6.0%
-7.0%
(380)
-3%
1,629
1,782
707
776
43.4%
Operating Profit Net Profit
Gross Profit OPM
Q2 2013 1,706
ARC est. Variance -7%
Source: Company data, Al Rajhi Capital
Disclosures Please refer to the important disclosures at the back of this report. Powered by Enhanced Datasystems’ EFA Platform
1
Zain KSA
Telecom –Industrial 17 July 2013
Disclaimer and additional disclosures for Equity Research Disclaimer This research document has been prepared by Al Rajhi Capital Company (“Al Rajhi Capital”) of Riyadh, Saudi Arabia. It has been prepared for the general use of Al Rajhi Capital’s clients and may not be redistributed, retransmitted or disclosed, in whole or in part, or in any form or manner, without the express written consent of Al Rajhi Capital. Receipt and review of this research document constitute your agreement not to redistribute, retransmit, or disclose to others the contents, opinions, conclusion, or information contained in this document prior to public disclosure of such information by Al Rajhi Capital. The information contained was obtained from various public sources believed to be reliable but we do not guarantee its accuracy. Al Rajhi Capital makes no representations or warranties (express or implied) regarding the data and information provided and Al Rajhi Capital does not represent that the information content of this document is complete, or free from any error, not misleading, or fit for any particular purpose. This research document provides general information only. Neither the information nor any opinion expressed constitutes an offer or an invitation to make an offer, to buy or sell any securities or other investment products related to such securities or investments. It is not intended to provide personal investment advice and it does not take into account the specific investment objectives, financial situation and the particular needs of any specific person who may receive this document. Investors should seek financial, legal or tax advice regarding the appropriateness of investing in any securities, other investment or investment strategies discussed or recommended in this document and should understand that statements regarding future prospects may not be realized. Investors should note that income from such securities or other investments, if any, may fluctuate and that the price or value of such securities and investments may rise or fall. Fluctuations in exchange rates could have adverse effects on the value of or price of, or income derived from, certain investments. Accordingly, investors may receive back less than originally invested. Al Rajhi Capital or its officers or one or more of its affiliates (including research analysts) may have a financial interest in securities of the issuer(s) or related investments, including long or short positions in securities, warrants, futures, options, derivatives, or other financial instruments. Al Rajhi Capital or its affiliates may from time to time perform investment banking or other services for, solicit investment banking or other business from, any company mentioned in this research document. Al Rajhi Capital, together with its affiliates and employees, shall not be liable for any direct, indirect or consequential loss or damages that may arise, directly or indirectly, from any use of the information contained in this research document. This research document and any recommendations contained are subject to change without prior notice. Al Rajhi Capital assumes no responsibility to update the information in this research document. Neither the whole nor any part of this research document may be altered, duplicated, transmitted or distributed in any form or by any means. This research document is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or which would subject Al Rajhi Capital or any of its affiliates to any registration or licensing requirement within such jurisdiction.
Additional disclosures 1.
Explanation of Al Rajhi Capital’s rating system
Al Rajhi Capital uses a three-tier rating system based on absolute upside or downside potential for all stocks under its coverage except financial stocks and those few other companies not compliant with Islamic Shariah law: "Overweight": Our target price is more than 15% above the current share price, and we expect the share price to reach the target on a 6-9 month time horizon. "Neutral": We expect the share price to settle at a level between 5% below the current share price and 15% above the current share price on a 6-9 month time horizon. "Underweight": Our target price is more than 5% below the current share price, and we expect the share price to reach the target on a 6-9 month time horizon.
2.
Definitions
"Time horizon": Our analysts make recommendations on a 6-9 month time horizon. In other words, they expect a given stock to reach their target price within that time. "Fair value": We estimate fair value per share for every stock we cover. This is normally based on widely accepted methods appropriate to the stock or sector under consideration, e.g. DCF (discounted cash flow) or SoTP (sum of the parts) analysis. "Target price": This may be identical to estimated fair value per share, but is not necessarily the same. There may be very good reasons why a share price is unlikely to reach fair value within our time horizon. In such a case we set a target price which differs from estimated fair value per share, and explain our reasons for doing so. Please note that the achievement of any price target may be impeded by general market and economic trends and other external factors, or if a company’s profits or operating performance exceed or fall short of our expectations.
Contact us Jithesh Gopi, CFA Head of Research Tel : +966 11 2119332 [email protected] Al Rajhi Capital Research Department Head Office, King Fahad Road P.O. Box 5561 Riyadh 11432 Kingdom of Saudi Arabia Email: [email protected] Al Rajhi Capital is licensed by the Saudi Arabian Capital Market Authority, License No. 07068/37.
Disclosures Please refer to the important disclosures at the back of this report.
2
US$16.94bn Market cap
Target price Consensus price Current price
55%
US$17.70mn
Free float
Avg. daily volume
80.70 89.27 82.50
-2.2% over current 8.1% over current as at 16/7/2013
Existing rating Underweight
Research Department Mazhar Khan, Tel +966 11 211 9248, [email protected]
Mobily
Neutral
Overweight
Margin improvement - key positive in Q2
Overweight
Flash View is an analyst’s preliminary interpretation of a results announcement or the impact of a major event. Our investment rating and earnings estimates are not being changed in this report. Any formal changes to our investment rating or earnings estimates will be made in a subsequent report, which may differ from the preliminary views expressed here.
Mobily reported its second quarter results yesterday with net profit rising by 13% y-o-y to SAR1.61bn, and which was also 6% above our forecast. Nevertheless, the company’s revenue grew only by a modest 5%, probably due to absence of any major smart phone release in Q2, and seasonality. One key positive from the result is a marked improvement in EBITDA and operating margins, increasing by 400bps and 190bps respectively. With Mobily’s increased focus on corporate segment, we expect the company’s growth momentum to continue in the next few years. We are currently Overweight on the stock, and will update our valuation once the detailed results are published.
Performance
Modest growth in revenues: Mobily reported a 5% y-o-y growth in revenues (SAR5.9bn) for Q2, mainly due to data and prepaid segments. Data services contributed 28% of the total revenues in 1H as against 25% during last year. Although modest, we believe that the revenue growth is reasonable, as Q2 is traditionally a low season.
Subdued gross profit growth, operating profit improved on efficiency: The company’s gross profit grew by only 1% despite a 5% growth in revenues, which indicates falling margins on data/voice services. On the other hand, better control on selling costs resulted in a 12.5% increase in operating profit.
Net profit: Mobily’s Q2 net profit increased 13% y-o-y to reach SAR1.61bn, beating our SAR1.56bn estimate by 5.7%. Overall, we believe that a decline in SG&A and interest costs resulted in a robust growth in the bottom-line.
Margin improvement key positive: One key positive this quarter is the marked improvement in EBITDA and net margins. The company’s EBITDA margin improved by 400bps y-o-y to 39.0% in Q2; which we believe is largely due to a strict control over selling costs, which remain close to 15% of sales. Consequently, the net income margin also improved by around 200bps y-o-y during Q2. It is worth highlighting that telecom companies are facing margin pressure, mainly due to low cost smart phones and falling tariffs.
Conclusion: Mobily has increased its focus on the corporate segment, which was highlighted by its recent announcements stating investments in various projects. With its increased focus on the corporate sector and cost savings, we believe that the company can sustain its healthy bottom-line growth for another couple of years.
Flash view
Vol mn
RSI10
Price Close
MAV10
86 81 76 71 66 61 56 70 30 6 -10
136 129 121 114 106 99 91
4
2 07/12
10/12
01/13
04/13
Source: Bloomberg
Earnings Period End (SAR)
12/12A
12/13E
12/14E
12/15E
Revenue (mn)
23,642
26,082
28,433
31,050
Revenue Growth
17.9%
10.3%
EBITDA (mn)
8,591
9,557
EBITDA Growth
15.2%
11.2%
7.82
9.02
EPS
EPS Growth 18.4% 15.4% Source: Company data, Al Rajhi Capital
9.0% 10,462 9.5% 10.44 15.8%
9.2% 11,768 12.5% 11.44 9.6%
Valuation
EV/Sales (x) 3.0 2.5
2.0 1.5
Figure 1 Mobily : Summary of Q2 2013 results
1.0
SAR (mn)
0.5
Revenue
5,678
5,628
EBITDA
2,039
1,975
EBITDA Margin
35.9%
Net Profit
1,421
0.0 01/10
01/11
01/12
Source: Company data, Al Rajhi Capital
01/13
Q2 2012
Q1 2013
Q2 2013
y-o-y
q-o-q
5.2%
6.1%
6,480
n.a
n.a.
n.a.
2,326
35.1%
39.0%
308 bps
391 bps
35.9%
8.6%
1,340
1,611
13.4%
20.3%
1,525
5.7%
5,972
ARC est. Variance -7.8% n.a.
Source: Company data, Al Rajhi Capital
Disclosures Please refer to the important disclosures at the back of this report. Powered by Enhanced Datasystems’ EFA Platform
1
Zain KSA
Telecom – Industrial ZAINKSA AB: Saudi Arabia 17 July 2013
US$2.851bn Market cap
Target price Consensus price Current price
48%
US$55.99mn
Free float
Avg. daily volume
10.00 8.59 9.80
2.0% over current -12.3% over current as at 16/7/2013
Existing rating Underweight
Overweight
Neutral
Neutral
Flash view Flash View is an analyst’s preliminary interpretation of a results announcement or the impact of a major event. Our investment rating and earnings estimates are not being changed in this report. Any formal changes to our investment rating or earnings estimates will be made in a subsequent report, which may differ from the preliminary views expressed here.
Price Close
114 104 94 84 74 64 54
RSI10
12
Vol mn
Zain KSA announced its Q2 results yesterday reporting a revenue growth of only 5% y-o-y, and which was 7% below our estimate. However, a 21% y-o-y decline in finance costs, resulted in lower net losses of SAR370mn for the quarter, better than our SAR380mn loss estimate. The government’s decision to defer Zain’s payment of annual license fees should improve the company’s operating cash flows, and provide more flexibility to negotiate a better longterm debt restructuring deal with lenders. However, subdued top line growth remains our key concern, and accordingly, we maintain our Neutral rating.
07/12
Above
In Line
Below
Earnings estimates
Up
No Change
Down
Dividend estimates
Up
No Change
Down
Recommendation
Upgrade
No Change
Downgrade
Long term view
Stronger
Confirmed
Weaker
Likely impact:
MAV10
17
50
Zain KSA Results in line, but muted
Earnings vs. our forecast
Performance
7 70 30 100 -10
Research Department Mazhar Khan, Tel +966 11 2119248, [email protected]
10/12
01/13
Revenues: Zain reported SAR1,706mn in Q2 revenue, a modest 5% y-o-y increase.
Gross and Operating Profit: The company’s Q2 gross profit came in at SAR831mn, whereas it reported an operating loss of 206mn for the quarter.
Net profit: Zain reported a net loss of SAR370mn for the quarter, compared to our expectation of a SAR380mn loss. This was an improvement from the SAR394mn loss in Q2 2012, mainly benefiting from a 21% y-o-y decline in finance costs.
Key takeaways from results and recent events: 1) Finance costs declined 21% y-o-y to SAR174mn; 2) Completion of restructuring of its SAR2.25bn loan, thereby extending its maturity till June 2016; 3) The deferment of annual license fees by the MOF (SAR5.6bn) improving the company’s operating cash flows, and thus providing more comfort for debt holders.
Conclusion: Overall, the results contained no surprises and were muted considering the 5% growth in revenues. Our key concerns for Zain (weak balance sheet carrying high debt, low capex due to cash crunch in the business and eroding capital due to continuing losses) remain, as the company has to resolve its short-term refinancing issues to focus on revenue generating efforts.
04/13
Source: Bloomberg
Earnings Period End (SAR)
12/12E
12/13E
12/14E
12/15E
Revenue (mn)
6,404
7,220
7,747
8,317
Revenue Growth
-4.4%
12.7%
879
1,011
1,309
1,560
EBITDA Growth
-2.2%
15.1%
29.5%
19.1%
EPS
(1.25)
(1.06)
(0.88)
(0.63)
EPS Growth -9.1% -15.5% Source: Company data, Al Rajhi Capital
-16.6%
-28.8%
EBITDA (mn)
7.3%
7.4%
Valuation
EV/Sales (x) 9 8
7 6 5 4 3
Figure 1 Zain KSA : Summary of Q2 2013 results
2 1
SAR (mn)
0
Revenue
01/10
01/11
01/12
Source: Company data, Al Rajhi Capital
01/13
Q2 2012
Q1 2013
y-o-y
q-o-q
4.7%
-4.3%
1,832
831
17.5%
7.1%
801
4%
43.6%
48.7%
12.2%
11.8%
44.1%
10%
(174)
(233)
(206)
18.4%
-11.6%
(207)
0%
(394)
(398)
(370)
-6.0%
-7.0%
(380)
-3%
1,629
1,782
707
776
43.4%
Operating Profit Net Profit
Gross Profit OPM
Q2 2013 1,706
ARC est. Variance -7%
Source: Company data, Al Rajhi Capital
Disclosures Please refer to the important disclosures at the back of this report. Powered by Enhanced Datasystems’ EFA Platform
1
Zain KSA
Telecom –Industrial 17 July 2013
Disclaimer and additional disclosures for Equity Research Disclaimer This research document has been prepared by Al Rajhi Capital Company (“Al Rajhi Capital”) of Riyadh, Saudi Arabia. It has been prepared for the general use of Al Rajhi Capital’s clients and may not be redistributed, retransmitted or disclosed, in whole or in part, or in any form or manner, without the express written consent of Al Rajhi Capital. Receipt and review of this research document constitute your agreement not to redistribute, retransmit, or disclose to others the contents, opinions, conclusion, or information contained in this document prior to public disclosure of such information by Al Rajhi Capital. The information contained was obtained from various public sources believed to be reliable but we do not guarantee its accuracy. Al Rajhi Capital makes no representations or warranties (express or implied) regarding the data and information provided and Al Rajhi Capital does not represent that the information content of this document is complete, or free from any error, not misleading, or fit for any particular purpose. This research document provides general information only. Neither the information nor any opinion expressed constitutes an offer or an invitation to make an offer, to buy or sell any securities or other investment products related to such securities or investments. It is not intended to provide personal investment advice and it does not take into account the specific investment objectives, financial situation and the particular needs of any specific person who may receive this document. Investors should seek financial, legal or tax advice regarding the appropriateness of investing in any securities, other investment or investment strategies discussed or recommended in this document and should understand that statements regarding future prospects may not be realized. Investors should note that income from such securities or other investments, if any, may fluctuate and that the price or value of such securities and investments may rise or fall. Fluctuations in exchange rates could have adverse effects on the value of or price of, or income derived from, certain investments. Accordingly, investors may receive back less than originally invested. Al Rajhi Capital or its officers or one or more of its affiliates (including research analysts) may have a financial interest in securities of the issuer(s) or related investments, including long or short positions in securities, warrants, futures, options, derivatives, or other financial instruments. Al Rajhi Capital or its affiliates may from time to time perform investment banking or other services for, solicit investment banking or other business from, any company mentioned in this research document. Al Rajhi Capital, together with its affiliates and employees, shall not be liable for any direct, indirect or consequential loss or damages that may arise, directly or indirectly, from any use of the information contained in this research document. This research document and any recommendations contained are subject to change without prior notice. Al Rajhi Capital assumes no responsibility to update the information in this research document. Neither the whole nor any part of this research document may be altered, duplicated, transmitted or distributed in any form or by any means. This research document is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or which would subject Al Rajhi Capital or any of its affiliates to any registration or licensing requirement within such jurisdiction.
Additional disclosures 1.
Explanation of Al Rajhi Capital’s rating system
Al Rajhi Capital uses a three-tier rating system based on absolute upside or downside potential for all stocks under its coverage except financial stocks and those few other companies not compliant with Islamic Shariah law: "Overweight": Our target price is more than 15% above the current share price, and we expect the share price to reach the target on a 6-9 month time horizon. "Neutral": We expect the share price to settle at a level between 5% below the current share price and 15% above the current share price on a 6-9 month time horizon. "Underweight": Our target price is more than 5% below the current share price, and we expect the share price to reach the target on a 6-9 month time horizon.
2.
Definitions
"Time horizon": Our analysts make recommendations on a 6-9 month time horizon. In other words, they expect a given stock to reach their target price within that time. "Fair value": We estimate fair value per share for every stock we cover. This is normally based on widely accepted methods appropriate to the stock or sector under consideration, e.g. DCF (discounted cash flow) or SoTP (sum of the parts) analysis. "Target price": This may be identical to estimated fair value per share, but is not necessarily the same. There may be very good reasons why a share price is unlikely to reach fair value within our time horizon. In such a case we set a target price which differs from estimated fair value per share, and explain our reasons for doing so. Please note that the achievement of any price target may be impeded by general market and economic trends and other external factors, or if a company’s profits or operating performance exceed or fall short of our expectations.
Contact us Jithesh Gopi, CFA Head of Research Tel : +966 11 2119332 [email protected] Al Rajhi Capital Research Department Head Office, King Fahad Road P.O. Box 5561 Riyadh 11432 Kingdom of Saudi Arabia Email: [email protected] Al Rajhi Capital is licensed by the Saudi Arabian Capital Market Authority, License No. 07068/37.
Disclosures Please refer to the important disclosures at the back of this report.
2
