reports
- Nauman Khan
Jarir: Strong top-line growth offset by high opex
Jarir reported a net profit of SAR268mn in Q4 22, up 2.0% yoy (-2.2% qoq). Adjusting for one-off zakat reversal, net income stood at SAR251mn, down 4.5% yoy (-8.4% qoq). This compares with the SNB Capital and consensus estimates of SAR262mn and SAR260mn, respectively. Revenues increased by 11.2% yoy (+7.0% qoq) to SAR2.58bn and were higher than our estimates. Gross margins came in at 13.3% in Q4 22 vs 12.3% in Q4 21 and 13.5% in Q3 22 and were in-line with our estimates. The deviation was due...
- Nauman Khan
Jarir: A dividend play in a maturing market
We maintain our Neutral rating on Jarir with a revised PT of SAR164.8. We believe the company’s stable business model, strong cash generation and relatively attractive dividend yield are the key advantages. However, the emergence of other spending avenues is a major downside risk. We expect Jarir to record a 4-year earnings CAGR of 6.0%, with a proportionate increase in dividends (2023f DY of 5.6%). The stock is trading at 2023f P/E and EV/EBITDA of 17.1x and 15.6x vs the peer group average o...
- Nauman Khan
Jarir: Q3 22 results – Strong sales impact diluted by weak margins
Jarir reported weaker than expected set of Q3 22 results, with a net income of SAR274mn (flat yoy). This compares to the SNB Capital and consensus estimates of SAR301mn and SAR276mn, respectively. Revenues increased by 13.2% yoy (+25.2% qoq) to SAR2.52bn and were higher than our estimates of SAR2.38bn. The earnings weakness and negative variance is mainly driven by lower gross margins, which we believe is a key negative of the results. Gross margins, contracted by 68bps yoy to 14.8%, were sig...
- Nauman Khan
Jarir: Weak Q2 results on lower margins
Jarir reported a weak set of Q2 22 results with net income declining by 6.4% yoy (-29.5% qoq) to SAR177mn. This compares to the SNB Capital and consensus estimates of SAR209mn and SAR217mn, respectively. Revenue decreased by 0.2% yoy (-12.1% qoq) to SAR2.01bn, marginally lower than our estimates of SAR2.06bn. We believe the negative variance in earnings is mainly driven by lower gross margins and higher non-opex. Gross margins contracted by 64bps yoy to 12.4% vs our estimate of 13.3% due to i...
JARIR MARKETING sees an upgrade to Slightly Positive due to a better f...
The general evaluation of JARIR MARKETING (SA), a company active in the Food Retailers & Wholesalers industry, has been upgraded by the independent financial analyst theScreener with the addition of a star. Its fundamental valuation now shows 4 out of 4 possible stars while its market behaviour can be considered as moderately risky. theScreener believes that the additional star(s) merits the upgrade of its general evaluation to Slightly Positive. As of the analysis date February 22, 2022, the cl...
- Nauman Khan
Jarir: Lower than expected margins offset higher sales
Jarir reported a mix set for Q3 21 results with a net income of SAR273mn, increasing 6.8% yoy (+44.0% qoq). This is in-line with the SNB Capital estimates of SAR268mn and slightly lower than the consensus estimate of SAR287mn. Revenues increased by 9.2% yoy and 10.4% qoq to SAR2.2bn and were higher than our estimates of SAR2.0bn. Despite higher revenues, gross margins contracted by 153bps yoy to 15.5% and was lower than our estimate of 17.0%. Strong top-line growth is a key positive of the re...
- Nauman Khan
Jarir: Higher sales offset weak margins
Jarir reported a strong set of Q1 21 results with a net income of SAR268mn, increasing 6.3% yoy (-7.0% qoq). This compares to the NCBC and consensus estimates of SAR247mn and SAR262mn, respectively. The positive variance was mainly driven by higher than expected revenue of SAR2.53bn (8.1% yoy), supported by higher sales of smartphones and computers. Gross margins contracted by 65bps yoy to 13.3% vs our estimates of 14.0%, mainly due to the low contribution of high margin school and office sup...
- Nauman Khan
Jarir: Resilient during challenging times
Despite its strong positioning and market leadership, we expect 2021f to be a challenging year for Jarir due to the impact of the announced fiscal measures. Beyond 2021f, we expect earnings growth to be largely driven by store expansion rather than LFL growth. We reduced our earnings estimate by c15% but increased our PT by 14.6% due to 1) lower risk-free assumption and 2) higher peers valuation. We remain Neutral on Jarir with a PT of SAR185.7. Attractive dividend yield of 4.1%, unlevered b...
- Nauman Khan
Jarir: Record revenues on pre-VAT sales
Jarir reported a broadly in-line Q2 20 results with net income of SAR208mn (+23.2% yoy). Adjusting for MoH Health Endowment Fund contribution of SAR20mn, net income would be SAR238mn, up +35.0% yoy (-9.3% qoq). This compares to the NCBC and consensus estimates SAR221mn and SAR194mn respectively. Revenue came in higher than our estimates due to strong pre-VAT sales. We are Neutral on Jarir, with at PT of SAR162.0. We believe growth and demand outlook for 2020f remains uncertain due to the gove...
- Nauman Khan
Jarir: Margin contraction partially offsets top-line growth
Jarir announced an in-line set of Q1 20 results, with net income increasing +7.7% yoy to SAR252mn. This compares to the NCBC estimates of SAR248mn. Revenues increased +24.0% yoy to SAR2.34bn, higher than our estimates of SAR1.98bn, which we believe is due to higher than expected sales of smartphones and computers. However, this was partially offset by -202bps contraction in gross margins to 14.0% (vs our estimates of 16.0%), due to promotional discounts and a shift in the product mix towards ...
- Alaa Tolba
- Khaled Sadek
Accelerated consolidation behind us; Cut to N
Fairly priced post 2018 rally. Stringent Saudisation requirements in the mobile market triggered faster displacement of unorganised players in 2017, expanding Jarir’s market share to 20% from 15%. However, the pace of displacement softened during 2H17 (organised players’ market share was 47% in Dec-17 vs. 24% in Jan-16), with Saudi store yields falling by 1% y-o-y in 2H17 vs. +6% y-o-y in 1H17. We maintain our 12M TP of SAR180/share and downgrade our rating to Neutral on valuation grounds. Jarir...
- Ghada JENDOUBI
First revenue decline in 7 years
Jarir recorded Q4 2016 consolidated sales in increase by 17.7% to SAR1,793.5m vs. SAR1,524m in the same quarter last year. The group posted a net profit amounting to SAR215.3m, up 3.5% compared to Q4 2015 due to an increase in the sales of the electronic section – mainly smart phones – as well as a decline in the selling and distribution expenses. The company ended the year with a revenue decline of 4% to SAR6,123m due to a drop in retail sales of computers, computer supplies, video games a...
Ford Equity International Rating and Forecast Report
Ford Equity International Research Reports cover 60 countries with over 30,000 stocks traded on international exchanges. A proprietary quantitative system compares each company to its peers on proven measures of business value, growth characteristics, and investor behavior. Ford's three recommendation ratings buy, hold and sell, represent each stock’s return potential relative to its own country market.. The rating reports which are generated each week, include the fundamental details behind...
- Ghada JENDOUBI
Top-line concerns vs. higher than expected margins
Jarir recorded Q3 2016 consolidated sales declined slightly by 1% to SAR1,520m compared to SAR1,536m in the same quarter last year. The group posted a net profit amounting to SAR220m, up 0.7% compared to Q3 2015 due to an increase in sales of school and office supplies as the first term of the back to school season falls in this quarter as well as a decline in the operating and non operating expenses. 9M 2016 revenues amounted to SAR4,329m, a yoy drop of 10.8% due to a decrease in sales of compu...
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