reports
- Nauman Khan
- Sarah Albassam
Extra: Q2 23 Result Analysis | Weak earnings on one-off losses
Extra reported an in-line set of Q2 23 results, with the net income decreasing by 51.5% yoy (-27.1% qoq) to SAR61.6mn, mainly resulted by the effect of one-off losses worth SAR38mn due to the discontinuation of the company’s expansion plans in Egypt. This compares to the SNB Capital and consensus estimates of SAR65.4mn and SAR89.4mn, respectively. Revenues increased by 2.3% yoy (+20.9% qoq) to SAR1.74bn and were higher than our estimates of SAR1.60bn. Besides the one-off losses, the weak resu...
- Nauman Khan
- Norah Alnouwaisar
Extra: Q2 23 Company Update | Set for growth with short term headwinds
We remain Overweight on Extra with a revised PT of SAR84.7. We believe the company will benefit from Saudi’s growing consumer base and rising income levels. We expect store expansion to remain limited and revenue growth will be a factor of 1) increasing store productivity, 2) higher online sales and 3) growing consumer finance business (Tasheel). However, consumer down-trading and higher interest rates are creating near-term headwinds. We expect profits to increase to SAR579mn by 2025f, provi...
- Nauman Khan
Extra and Panda, a game-changing strategic MoU
Extra and Panda, a game changing strategic MoU * Extra announced its strategic MoU with Panda Retail (Savola’s retail arm) to manage the Electronics and Home Appliances sector of Panda. * A strategic cooperation between the companies over the mid to long term is aimed to be made, supported by Extra’s leading position in the electronics retail sector, and Panda’s large retail chain in Saudi. * Extra said that the cooperation strengthen the company’s strategic expansion plans. O...
- Nauman Khan
Extra: Q4 22 results – Strong results on higher revenue and margins
Extra reported a strong set of Q4 22 results. Although net income declined by 3.8% yoy (+28.9% qoq) to SAR121mn, it was higher than the SNB Capital and consensus estimates of SAR96.9mn and SAR102mn, respectively. The variance in earnings is majorly driven by 1) higher than expected revenue which stood at SAR1.55bn (-12.5% yoy, +12.7% qoq) vs our estimates of SAR1.40bn 2) higher gross margins which expanded by 268bps yoy to 22.7% vs our estimates of 20.8%. We believe margin expansion is due to...
- Nauman Khan
Extra: Q3 22 Results | Highest quarterly net profit, despite earnings ...
Extra reported the highest quarterly net profit, with net income increasing by 5.8% yoy (-25.9% qoq) to SAR94.2mn. However, this is marginally lower than the SNB Capital and consensus estimates of SAR101mn and SAR98mn, respectively. The yoy earnings growth primarily came from higher gross margins, which expanded by 150bps yoy to 21.9% and were higher than our estimates of 21.0%. The positive impact was partially offset by higher operating expenses, which increased by 10.9% yoy to SAR198mn and...
- Nauman Khan
Extra: Solid growth and attractive investment case
We upgrade Extra to Overweight with a PT of SAR139.9. The stock is our preferred name in the consumer discretionary space given 1) growing consumer financing business (Tasheel), 2) market leadership in major product categories, 3) strong online offering and 4) earnings growth track-record. We project a strong 2021-24f earnings CAGR of 15.1%, translating into a strong FCF generation and steady growth in dividends. The stock is trading at 2022f P/E of 16.6x and offering an attractive dividend y...
- Nauman Khan
Extra: Strong results driven by higher sales and margins
Extra reported a strong set of Q3 21 results with a net income of SAR89mn, increasing by 66.7% yoy (-11.3% qoq). This compares to the SNB Capital and consensus estimates of SAR75mn and SAR90mn respectively. The variance in earnings was mainly driven by 1) better than expected revenue and 2) operational efficiencies as opex to sales stood at 13.2% vs our estimate of 14.4%. The key highlight of the results is the strong revenue growth of 12.1% yoy to SAR1.4bn (vs our estimate of SAR1.2bn). Gros...
UNITED ELECTRONICS increases its risk exposure and slightly lowers to ...
UNITED ELECTRONICS (SA), a company active in the Consumer Electronics industry, now shows a lower overall rating. The independent financial analyst theScreener confirms the fundamental rating of 4 out of 4 stars. However, the market behaviour deterioration triggered a risk requalification, which can be thus described as moderately risky. theScreener believes that increased risk justifies the general evaluation downgrade to Neutral. As of the analysis date July 2, 2021, the closing price was SAR ...
- Nauman Khan
Extra: Consumer finance to support future growth
We downgrade Extra to Neutral with a PT of SAR120.8. We believe the company’s outlook remains positive given the 1) robust growth in the consumer finance business and 2) market share gains driven by consolidation and online sales. We expect a topline CAGR of 5.8% over 2020-2025f, while net income is expected to record a CAGR of 15.6%. However, we believe these positives are priced in with the stock trading at 2021f PE and EV/EBITDA of 21.1x and 16.0x vs peer group average of 23.3x and 20.4x, ...
- Nauman Khan
Extra: Strong Q1 21 results on higher sales and margins
Extra reported a strong set of Q1 21 results, with a net income of SAR81mn, increasing by 134% yoy (-20.3% qoq). This compares to the NCBC and consensus estimates of SAR41mn and SAR42.1mn, respectively. Revenues increased by 10.8% yoy to SAR1.4bn and were higher than our estimates of SAR1.3bn. We believe the deviation was primarily due to higher than expected growth in the consumer financing business. Gross margins expanded 127bps yoy to 19.2% (vs our estimates of 18.4%). KEY HIGHLIGHTS: * S...
- Nauman Khan
Extra: Mega sale and consumer finance drive Q4 earnings
Extra reported a strong set of Q4 20 results, with net income increasing +41.2% yoy to a record high of SAR101.8mn. This is higher than the NCBC and consensus estimates of SAR73.5mn and SAR80.0mn, respectively. Revenues increased +3.9% yoy to SAR1.96bn, broadly in line with our estimates of SAR1.89bn. This is the highest quarterly revenue on record. We believe the positive variance was mainly due to higher than expected gross margins supported by increasing contribution from consumer financin...
- Nauman Khan
Extra: Consumer finance to drive growth
We upgrade Extra to Overweight with a PT of SAR90.8, due to 1) better growth prospects of consumer finance business, 2) market share gains on sector consolidation and 3) lower risk free. We expect the topline to grow at a CAGR of +6.4% over 2019-2025f while net income is expected to record a CAGR of 12.2%. Increasing construction activity is a key long-term catalyst. The stock is trading at 2021f PE and EV/EBITDA of 17.6x and 12.8x, respectively. Consumer finance – a key theme: We expect the ...
- Nauman Khan
Extra: Strong results on higher-than-expected sales
Extra announced a better than expected set of Q3 20 results, with net income increasing +95.4% yoy to SAR53.2mn. This compares to the NCBC estimates of SAR25.6mn. Despite the increase of VAT, Extra recorded a strong sales growth (+18.4% yoy), which is the major positive of the results. Other key positives include, 1) gross margin expansion and 2) better financing business performance. Based on our last published update in December 2019, we are Neutral on Extra with PT of SAR61.3. We will upda...
- Alaa Tolba
- Khaled Sadek
Always a step ahead of peers; Set for a new path
Remain buyers, as Tasheel expands growth prospects. Offering a unique shopping experience, with different selling channels, payment options and easy access to finance, positions eXtra ahead of its peers. Tasheel Finance (launched in May-19) should enjoy high growth (80% over 2019-21e), capitalising on Saudi’s limited consumer finance offering by NBFCs and relatively low banking penetration (retail loans-to-GDP of 16.4%). We raise our 12M TP by 36% to SAR100/share, to factor the new consumer fina...
- Alaa Tolba
- Khaled Sadek
Strongly positioned to outperform, remain buyers
Beneficiary of new regulation. The MoL’s Jan-18 decree to enforce full Saudisation in stores selling electrical and electronic appliances (deadline Nov-18), among 11 other retail sectors, favours eXtra. This decision should trigger faster displacement of unorganised expat players, particularly within the big appliances market, diverting traffic to eXtra. We raise 2018-22e revenue by c7%, assuming eXtra will expand its big appliances market share to 15.5% by 2019 from 9%. Saudisation costs should...
- Alaa Tolba
Overweight on robust recovery and expansions
Remain buyers on 2018 expansions. eXtra issued guidance of 3 new stores in 2018, ahead of our expectations of 1 store. We raise our 2017-18 capex by 29% to factor in higher space additions (+6.5% y-o-y), supply chain and online store investments. This should drive 2017-19 EPS CAGR of 12%, coupled with a sustained recovery in margins and store yields. Therefore, we raise our 12M TP by 13% to SAR58/share as we roll-over our DCF, on 23bps higher EBITDA margins. The market sell-off offers a good ent...
United Electronics Co in Consumer Electronics (Saudi Arabia)
United Electronics Company is a leading retailer of consumer electronics in Saudi Arabia, and is expected to become a leader in consumer electronics, appliances and communication solutions in the GCC region by 2020. Its strategy focuses on opening new branches in Saudi Arabia, and expanding outside the country as well. Euromonitor International Local Company Profiles are a concise set of briefings detailing the strategic direction taken by a company. Discover key contact details, the company ba...
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...
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