Retail subscription to 750,000 United International shares starts on TASI today

Logo of United International Holding Co.

Individual investors began today, Nov. 19, subscribing to 750,000 shares of United International Holding Co. at SAR 132 per share, as determined through the book-building process.

The shares allocated to individual investors represent 10% of the total shares offered in the public subscription.

For More IPOs

The retail subscription period will remain open for two days, ending on Nov. 20.

In June, the Capital Market Authority (CMA) approved United International's application to list 7.5 million shares of its post-IPO capital on the Saudi Exchange (Tadawul) at a par value of SAR 10 per share.

The institutional offering ended last week with a coverage ratio of 132%.

United International’s IPO is the twelfth this year for the Main Market, after Middle East Pharmaceutical Industries Co. (Avalon Pharma) on Jan. 30, Modern Mills for Food Products Co. on March 5, Miahona and Dr. Soliman Abdulkader Fakeeh Hospital Co. (Fakeeh Care Group) on May 21, Saudi Manpower Solutions Co. (SMASCO) on May 26, Al Taiseer Group Talco Industrial Co. (TALCO) on May 28, Rasan Information Technology Co. on May 29, Almajed Oud on Sept. 15, Arabian Mills Co. on Sept. 18, Fourth Milling Co. (MC4) on Oct. 2, and Tamkeen Human Resources Co. on Nov. 5.

Tadawul witnessed eight IPOs in 2023, including MBC Holding Group Ltd., Morabaha Marina and Mawarid Manpower Co., Jamjoom Pharmaceuticals Factory Co., First Milling Co., Lumi Rental Co., ADES Holding Co., and SAL Saudi Logistics Services Co.

Key background

United International, a subsidiary of United Electronics Co. (eXtra), manages associates and implements investment partnerships in real estate and securities.

In 2021, United International was established in Al-Khobar, mainly to engage in consumer financing per the Companies Law, the Finance Companies Control Law and its executive regulations, related laws, and the Saudi Central Bank's (SAMA) rules and instructions.

As per its bylaws, the company operates in managing its subsidiaries and participates in the management of other companies in which it has a shareholding. It also owns real estate and movables necessary for its activities, in addition to investing its funds in shares and other securities.

Furthermore, the company provides loans, guarantees, and financing to its subsidiaries, as well as owns industrial property rights such as patents, trademarks, franchise rights, and other intangible rights. It also exploits and leases them to its subsidiaries or others.

The company's capital is SAR 250 million, divided into 25 million shares, at a par value of SAR 10 per share.

Tasheel

United Company for Financial Services, commercially known as Tasheel Finance, is a Saudi company that was founded in 2019 and is headquartered in Al-Khobar.

Tasheel is one of the providers of consumer finance services that are compatible with Islamic Sharia standards. It provides cash loans, installment sales, and credit cards.

It expanded its partnerships to include more than 300 additional retailers and service providers during the previous period, including IKEA, Saudi German Hospital, RAM Clinics, Alghanim Electronics, Tamkeen Electronics, and Al Naghi Electronics Group.

According to the prospectus, Tasheel recorded profits of SAR 212 million in 2023, accounting for 44% of the total profits of major consumer finance companies, which represent more than 95% of the market volume.

Location

United International, through its subsidiary Tasheel, enjoys wide geographical coverage of its services through its presence in eXtra as well as its offices spread throughout the Kingdom, where it includes more than 76 stores for retail services distributed in 28 cities, in addition to its digital platform that enables consumers to apply for cash loans.

Market share

In 2023, the Saudi non-banking financial sector included 53 licensed companies. 11 companies were licensed to provide real estate finance, while the remaining 42 companies were licensed to provide financing activities other than real estate finance.

Tasheel Finance, a subsidiary of United International Holding, ranks second among consumer finance companies in the non-banking financial institutions (NBFI) sector in Saudi Arabia, with a market share of 8.1% in 2023.

The following table shows the market share of NBFI:

According to financing products, Tasheel acquired 7.1% of the cash loan market in 2023, 37.4% of the installment sales market, and 26.1% of the credit card market.

*The share of cash loans and securitization of the total portfolio of Emkan Co. is estimated based on initial research, as it is not included separately in the financial statements.

Customer loans by product

The volume of loans granted to the company’s customers through its various products rose nearly 58% YoY in 2023 to SAR 1.93 billion from SAR 1.22 billion in 2021.

Tawarruq accounted for the largest share of the loan portfolio, rising from 70% in 2021 with a value of SAR 857 million to 82% in 2023 with a value of SAR 1.58 billion.

Revenues

United International’s revenues expand to about SAR 523.9 million in 2023.

According to the prospectus, Tawarruq constitutes 72.2% of the company’s revenues during the period. Murabaha accounted for 26.8%, as shown in the following table:

Workforce

The number of employees in the group reached 525 workers in 2023, including 316 Saudi citizens.

The Saudization rate hit 42%, while it stood at 85% in Tasheel.

*eXtra owns 100% of the shares of eXtra Bahrain. Accordingly, eXtra Bahrain will be subject to the statutory lock-up period applicable to the major shareholder.