Zain Saudi misses Q3 2019 expectations: NCB Capital

Zain Saudi reported a weaker than expected Q3 2019 results, significantly lower than the analysts’ and consensus estimates of SAR 137 million and SAR 148 million respectively, NCB Capital said in a research note.

“The weaker result is due to lower revenues and higher than expected opex,” the note said.

“This potentially indicates Zain’s limited benefit from the Hajj season. The Hajj season occurred during Q3 2019 where the number of pilgrims grew by 5 percent to 2.49 million,” it further added.

However, in Q3, Zain launched 5G services with 2,000 towers across 20 cities, to be a leading operator in Saudi offering the service at reasonable prices. “We believe this could improve Zain’s revenue growth and market share going forward,” the brokerage firm added.

NCBC has issued “Overweight” recommendation for the company’s share with a target price of SAR 11.40 per share.