The order backlog of Riyadh Cables Group Company reached SAR 4.90 billion at the end of the first nine months (9M) of 2024, providing strong revenue visibility for the near term, according to a report by Aljazira Capital Research.

Demand for the company’s products has been robust, both locally and in export markets, with a particularly strong uptick in higher-margin products, supporting the expansion in gross profit per tonne.

These trends are expected to continue, driving growth in both top-line and gross profit, which is likely to translate in bottom-line expansion.

Moreover, the company’s low leverage and healthy cash generation further strengthen its financial position, while its consistent dividend payouts are expected to persist.

Since Aljazira Capital Research’s initiation of coverage in August 2024, the company has posted its highest-ever quarterly revenue and earnings outperformance, surpassing the estimates in the third quarter (Q3) of 2024.

Aljazira Capital Research stated: “We forecast total revenue to grow at a CAGR of 8.3% over FY23–FY28E, reaching SAR 11.70 billion, with net income growing at a CAGR of 17.30% to reach SAR 1.20 billion.”

It added: “Following the announcement of Q3-24 results, the stock has rallied by ~35%, and is currently trading at 25.6x times FY25E EPS.”

Aljazira Capital Research has revised the rating of Riyadh Cables to ‘Neutral’ with a revised price target of SAR 139.40 per share.

In 9M-24, the listed Saudi company generated SAR 563.13 million worth of net profits in addition to SAR 6.51 billion of revenue. Meanwhile in Q3, the net profits reached SAR 234.75 million while the revenues hit SAR 2.43 billion.

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