Mubasher TV
Contact Us Advertising   العربية

Al Rajhi Capital maintains 'Overweight' on eXtra at TP of SAR 80/shr

Al Rajhi Capital maintains 'Overweight' on eXtra at TP of SAR 80/shr
eXtra posted a 59% year-on-year profit hike during Q2-19
EXTRA
4003
0.53% 95.60 0.50

Riyadh – Mubasher: Al Rajhi Capital has maintained their ‘Overweight’ recommendation on United Electronics Company’s (eXtra) stock at a target price (TP) of SAR 80 a share.

“Extra reported robust Q2 2019 results with revenue of SAR1,161mn (+14% y-oy), missing our estimate of SAR1,253mn,” Al Rajhi Capital said recently in a statement.

Net profits of the Saudi-based company hit SAR 73 million in the second quarter of 2019, in line with Al Rajhi Capital’s estimations of SAR 75 million.

The Saudi financial services provider noted that eXtra’s strong performance was mainly due to healthy top-line growth driven by higher sales of smart devices, better than expected consumption, expansion of stores and higher share from credit sale.

In the same vein, the company’s gross profit margins improved and beat our expectations due to the increase in sales of higher-margin products such as white goods, better pricing and interest revenue from credit sales, Al Rajhi Capital noted. 

“The securitisation deal with Al-Rajhi Bank will have multiple positive implications on the company in terms of accelerating the recognition of future profits, better leverage ratios as the company would use the cash for repayment of debts,” Al Rajhi Capital said.

A couple of days ago, Al Rajhi Capital has raised eXtra’s TP to SAR 80 per share instead of SAR 69.3 a share, implying a rating of “Overweight” with an upside potential of 15.4%, supported by higher growth from Tasheel Program expansion.

It is worth noting that the company posted a 59% year-on-year profit increase during Q2-19, recording SAR 72.5 million.