Perfect Presentation to debut today, P/E 40% below IT sector

Logo of Perfect Presentation for Commercial Services Co.

Perfect Presentation for Commercial Services Co. (2P) will begin trading on the Saudi Exchange (Tadawul) on Nov. 16 with a price-to-earnings ratio (P/E) that is 40% lower than peers under the information technology sector, according to a report by AlJazira Capital.

At the IPO price of SAR 185/share, 2P is valued at TTM P/E of 21.9x, a significant discount to its Tadawul-listed peers.

Revenue increased to SAR 655 million in 2021 from SAR 298 million in 2019 at a compound annual growth rate (CAGR) of 48.3%. The revenue growth was driven by healthy rise in number of revenue-generating projects across business units, AlJazira Capital said.

2P witnessed its weighted average number of projects growing by 2x between 2019 and 2021 from 64 to 128, backed by projects from some of the key government entities.

Moreover, 2P’s customer experience unit contributed 46% to the company’s revenue in 2021, reporting a CAGR rise of 67.6% between 2019 and 2021. The operation and maintenance and software development units also recorded robust revenue growth at a CAGR of 36% and 36.6%, respectively, in the same period.

2P reported a rise in net profit margins from 7.7% in 2019 to 12.3% in 2021, ahead of expanding to 13.3% in the first nine months of 2022.

AlJazira Capital added that 2P has opportunities in various fields, such as data centers, cloud computing, cybersecurity, artificial intelligence (AI), information and communication technology, digital solutions and the small and medium-sized enterprises (SMEs) sector.

The spending on IT services in the Kingdom is forecast to rise to SAR 20.8 billion by 2026 from SAR 14.1 billion in 2019. Expenditure on hardware and software is also expected to exceed SAR 33 billion and SAR 10.6 billion, respectively, by 2026.

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