SACO maintains strong margins in 2020; rating ‘Neutral’: Itqan Cap

Saudi Company for Hardware (SACO) was able to maintain healthy margins, despite the challenging year, thanks to government support, non-recurring gains and operational efficiency obtained in 2020, Itqan Capital said in an earnings review.

During Q4 2020, SACO’s management focused on operational efficiency in order to remain competitive during the challenging economic climate.

“Going forward, we believe that the governmental incentives towards mortgage will create a new demand for SACO, while the company’s operational efficiencies will help maintain healthy margins going into 2021,” the report said.

Itqan Capital expects that SACO will achieve a net profit of SAR 85 million in 2021, and SAR 115 million in 2022.

It updated SACO’s target price (TP) to SAR 61.06 per share, while maintaining “Neutral” recommendation.