reports
- Talha Nazr
STC: Q4 22 results analysis – Weaker than expected results on higher o...
STC reported a weaker than expected set of Q4 22 results. Although net income increased by 5.5% yoy (-22.1% qoq) to SAR2.76bn, it was lower than the SNB Capital and consensus estimates of SAR3.07bn and SAR2.8bn, respectively. Revenues increased by 8.6% yoy (+3.4% qoq) to SAR17.03bn and came in-line with our estimates. However, we believe the variance in earnings was mainly due to higher opex. Therefore, EBITDA margins contracted by 448bps yoy to 32.3% vs our estimates of 37.3%. * Revenues i...
- Talha Nazr
STC | Q4 Update | Digitisation growth potential with stable dividends
We upgrade STC to Overweight with a revised PT of SAR42.5. We believe the focus to transform to technology, asset monetization programs, and strong revenue growth from its subsidiary Solutions will drive STC going forward. Moreover, the completion of the towers deal and the potential increase in dividends are the short-term catalysts. We expect the company to record revenue and net income CAGR of 5.3% and 7.9% during 2021-24f to reach SAR74bn and SAR14.2bn, respectively. The stock is trading ...
- Talha Nazr
STC: Earnings Call Summary
EARNINGS CALL SUMMARY - STC H1 22 Below are the key highlights of STC’s H1 22 earnings call. I have attached our Q2 22 event flash report for your reference. FINANCIAL OVERVIEW * STC’s revenue grew by 7.4% yoy to SAR33.8bn in H1 22, driven by healthy growth across all business segments. * Gross profits in H1 22 increased 8.4% yoy while gross margins expanded by 50bps yoy to 54.0% mainly due to cost control measures by STC KSA, Bahrain and Kuwait. * STC operating profit in H1 22 inc...
- Talha Nazr
STC: Margin expansion offset by higher non-opex
STC reported a broadly in-line set of Q2 22 results with net income increasing marginally by 0.6% yoy (-6.5% qoq) to SAR2.84bn. This compares to the SNB Capital and consensus estimates of SAR3.10bn and SAR3.06bn, respectively. Revenue increased by 6.5% yoy (-0.3% qoq) to SAR16.94bn and came in-line with our estimates of SAR17.17bn. EBITDA and EBIT margins remained inline. The variance in earnings is mainly driven by the increase in losses from share in results of associates to SAR283mn vs our...
- Iyad KhalidÊGhulam
STC: Bonus issue, a positive stock momentum
STC TO BONUS ISSUE, A POSITIVE STOCK MOMENTUM STC BoD recommended to increase its capital 150% to SAR50bn, through the issuance of bonus shares via capitalizing SAR30bn from retained earnings. The company further added that the capital increase will help it in achieving its growth and expansion strategy. OUR VIEW * We believe this step should prove beneficial for the company in the long run, as it looks to pivot away from a traditional telecom service provider to a technology company. STC ha...
- Iyad KhalidÊGhulam
STC: Growth potential is fairly valued
We remain Neutral on Taiba with a PT of SAR36.3. Although Taiba faced headwinds in 2020 and 2021f due to the impact of COVID-19, we expect a recovery in 2022f following the reduction of COVID-19 restrictions. Therefore, we expect a net income of SAR64.3mn in 2022f and SAR108mn in 2023f. Moreover, the potential merger with Dur and implementation of IAS 40 are key short-term catalysts. The stock trades at a slight discount to its Market NAV at 0.99x. * Positive data from CITC: Based on CITC re...
SAUDI TELECOM sees an upgrade to Slightly Positive due to a better fun...
The general evaluation of SAUDI TELECOM (SA), a company active in the Integrated Telecommunications 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 August 24, 2021, the closi...
- Iyad KhalidÊGhulam
STC: Higher top-line mitigated by lower margins
STC reported a broadly in-line set of Q4 20 results, with net income increasing +15.6% yoy (-3.0% qoq) to SAR2.68bn. This compares to the NCBC and consensus estimates of SAR2.52bn and SAR2.67bn, respectively. We believe the strong revenue growth of +14.7% yoy was offset by lower margins which declined from 63.0% in Q4 19 to 55.8% in Q4 20. We believe this is attributed to higher access charges and device sales. Revenues increased +14.7% yoy (+2.2% qoq) to SAR15.2bn and came broadly in-line wi...
- Hassan Abdel Gelil
STC AB | Hike TP 24%; Upgrade to Neutral amid active asset monetisatio...
High valuation, but remains Tadawul’s favourite. stc trades on a 2021x EV/EBITDA of 9.0x, significantly higher than the 5.8x peer average. However, we are of the view that stc’s current premium will prevail on the back of its: i) size in the Saudi market, ii) stable dividend policy with a sustainable yield of 4%, iii) asset monetisation plan, iv) strong balance sheet, and iv) exposure to new projects and regional expansion in the ICT business. EBITDA to grow, on healthier revenue mix. We expect...
- Iyad KhalidÊGhulam
STC: Margin expansion offset by higher non-opex
STC reported an in-line set of Q3 20 results, with a net income increasing +0.7% yoy (+1.5% qoq) to SAR2.77bn. This compares to the NCBC and consensus estimates of SAR2.70bn and SAR2.67bn, respectively. We believe the strong margin expansion was offset by higher non-operating expenses.
- MarketLine Department
Zain Group - Mergers & Acquisitions (M&A), Partnerships & Alliances An...
Summary Marketline's Zain Group Mergers & Acquisitions (M&A), Partnerships & Alliances and Investments report includes business description, detailed reports on mergers and acquisitions (M&A), divestments, capital raisings, venture capital investments, ownership and partnership transactions undertaken by Zain Group since January2007. Marketline's Company Mergers & Acquisitions (M&A), Partnerships & Alliances and Investments reports offer a comprehensive breakdown of the organic and inorganic g...
- Iyad KhalidÊGhulam
STC: Strong revenues growth offset by lower margins
STC reported a net income of SAR2.72bn in Q2 20, declining -4.4% yoy (-6.5% qoq). This compares to the NCBC and consensus estimates of SAR3.02bn and SAR2.87bn, respectively. The main highlight of the results is the strong yoy growth in revenues, which we believe is driven by Covid-19 demand. We are Neutral on STC with a PT of SAR93.5. The progress in Vodafone Egypt deal (MoU extended until 30 June 2020) is the stock's key catalyst. Moreover, the stock key strengths are strong balance sheet (c...
- Iyad KhalidÊGhulam
STC: Non-opex offsets sales growth and Careem proceeds
STC reported a lower than expected set of Q1 20 results with a net income of SAR2.91bn, increasing 5.9% yoy (+25.5% qoq). This compares to the NCBC and consensus estimates of a net profit of SAR3.87bn and SAR3.19bn. We believe the lower-than-expected result is due to lower margins, higher depreciation and lower other income. We are Neutral on STC with a PT of SAR93.5. The progress in Vodafone Egypt deal (MoU extended until 30 June 2020) is the stock’s key catalyst. Moreover, the stock's key s....
- Hassan Abdel Gelil
Saudi telecoms | Short-term outlook remains tough; Avoid sector
Tough regulations cloud telecoms market. Over the past 2-3 quarters, the CITC took measures, which clouded the sector in 1Q18 and should continue to in 2018, including: i) banning automatic renewal for bundles, as of Jan 2018, limiting revenue from out-of-bundle, ii) implementing a 5% VAT, starting Jan 2018, that should result in lower usage, iii) cutting MTR rates by 45% in Dec 2017, pressuring interconnection revenue, and iv) lifting the ban on VoIP services, as of end of 3Q17, decreasing reve...
- Myriam CHAABOUNI
Lower revenues, margins erosion but higher net profit
STC recorded a decrease by 1.6% in its Q2 2017 revenues at SAR13.202bn, taking H1 2017 revenues to SAR26.032bn, down 2.3%, yoy, due to weakened domestic and international performance (vs. a slight increase by 1.1% planned for the whole year). Indeed, STC KSA and Sale Co. witnessed decreasing H1 2017 revenues (-4.9%) at SAR23.354bn. Similarly, revenues coming from Viva Kuwait, Viva Bahrain, Intigral, Bravo and STC Solutions were cut by 4.2% at SAR3.899bn.
- Myriam CHAABOUNI
Costs outweigh revenue growth
In 2016, STC recorded a slight 2.4% increase in revenues at SAR51.845bn. While STC’s domestic operations witnessed increasing revenues (+2.4%), controlled international subsidiaries (mainly Bahrain and Kuwait) witnessed stable revenues (+0.3%). Domestically, STC continues with the deployment of its 4G network in all the districts of the country, and of the fiber optic network in the country to serve the business sector. In addition, Q4 2016 bundled services customer base increased 19%, yoy, do...
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...
- Myriam CHAABOUNI
An expected contrast of results
In 9M 2016, STC recorded a healthy 5.9% increase in revenues at SAR39.833bn, with revenue growth from, both, domestic operations and controlled international subsidiaries (mainly Bahrain and Kuwait), (+5.1% and 1.5%, yoy, respectively). STC continues with the deployment of the fiber optic technology for both business and residential networks. Q3 2016 “FTTH†customer base increased by 33%, yoy, domestically. Q3 2016 Enterprise business unit’s overall revenues increased by approximately 20%,...
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