Saudi Arabian Tech: from oil to data and beyond (initiating on Solutions by STC with a BUY, and Jahez with a HOLD)
We initiate coverage of two tech companies in Saudi Arabia, Solutions by STC (Solutions), an IT integrator, and Jahez, an online food delivery company. We rate Solutions a BUY, with a SAR 287 price target (PT), and Jahez a HOLD, with a SAR 698 PT. Helped by stronger oil prices, Saudi Arabia has become the fastest-growing economy among the G20 countries this year. Unlike most other economies, Saudi Arabia is facing an acceleration of economic growth, in combination with relatively low inflation. Moreover, the country has embarked on an ambitious path of digital transformation, by introducing its Vision 2030 initiative in 2016. We believe that both Solutions and Jahez should benefit from these trends. We prefer Solutions due to its valuation, scope for growth in a highly-fragmented market, and its already leading market positions. Jahez has a strong platform and should be able to overtake the number one player in the market in 2024E, but its share price is quite rich already, in our view.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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