AlJazira Cap says BinDawood’s Q4 2020 profit misses estimates, maintains ‘Neutral’ rating

Logo of BinDawood Holding Co.

BinDawood Holding Co.’s Q4 2020 net profit of SAR 57.4 million missed AlJazira Capital and consensus estimates’ of SAR 105.5 million and SAR 118.4 million, respectively.

The company’s sales are expected to come under pressure in the near term due to travel restrictions to contain the spread of the COVID-19 pandemic, hike in the value-added tax (VAT) rate and shift to online education, AlJazira Capital said in its latest report.

“We anticipate the group to outpace its supermarket-focused peers in the sector in the long term, as it offers a better investment opportunity due to its efficiency, profitability and value metrics,” the report noted.

Furthermore, BinDawood Holding has promising headroom for growth based on its strategic positioning over the long term, as it is well placed to capitalize on socio-economic trends and government initiatives.

The brokerage expects the group to report a net income of SAR 433.5 million in 2021, compared to a net income of SAR 447.7 million in 2020. 

AlJazira Capital maintained its “Neutral” rating on the stock, keeping the target price at SAR 117 per share.