{Islamic_Finance_Banking} Savola: Eye-catching at current level

 

 

 

إدارة البحوث Research Dept	الراجحي المالية Al Rajhi Capital
SAVOLA Eye-catching at current level Driven by strong overseas operations in food segment and remarkable growth in retail segment, Savola released Q2 results with robust y-o-y growth in revenues and net income of 30% and 11% respectively. Revenues from Iran and Egypt showed the highest y-o-y growth of 56% and 35%. Stimulated by the two month salary bonus, revenues from local market also grew remarkably by 22%. In our view, Q2 results were strong and exceeded our estimates; we've revised our near term forecasts accordingly. However, due to recent global economic concerns and the company's relatively high exposure to international markets, we have raised our WACC assumption to 11%. Therefore, we set a new target price of SAR32.9. This implies around 28% upside potential as the share price recently fell, we remain overweight.
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