Riyadh-Mubasher: Al-Rajhi Capital reduced Ma’aden's target price to SAR 46 (from SAR 52), but maintained its ‘Overweight’ rating on the stock.

The research firm said Ma’aden’s Q2 operating performance was in-line with its expectations, though net profit of SAR 270 million (down 27.2%  y-o-y) came below its estimate of SAR 354.5 million as well as consensus estimate of SAR 299 million due to higher-than-expected interest expense and lower other income.

On a q-o-q basis, profits edged up 3.5% on higher sales volumes across all products.

The uneven global economic picture and weak industrial scenario in China and other emerging markets led to the commodity price plunge recently, Al-Rajhi Capital said.  

It believes that Ma’aden continues to do well on the operational side, which will drive better results in the aluminium and gold units specifically.

“Though volatility in earnings caused  by commodity prices and ramping up of operations are expected in the near term, Ma’aden remains one of our top long-term picks in the Saudi market and is one of the nineteen stocks added to the MSCI Saudi Arabian Local Index,” Al-Rajhi Capital said.