Saudi German Health’s stock cheap, fair market cap of up to SAR 25B: Vice Chair

 Makarem Sobhi Batterjee, President and Vice Chairman of Middle East Healthcare Co. (Saudi German Health)

Makarem Sobhi Batterjee, President and Vice Chairman of Middle East Healthcare Co. (Saudi German Health), said that the stock is cheap compared to the group’s size, number of beds and clinics. The company’s market capitalization currently stands at SAR 9 billion, but normally it should range between SAR 20 billion and SAR 25 billion, in light of SGH’s size.

In an interview with CNBC Arabia, Batterjee said the planned SAR 1.5 billion sukuk program aims to restructure previous loans to improve liquidity and profitability levels. The company’s total debt stands at around SAR 3 billion, and there is no intention to borrow more loans. SGH will issue sukuk only, he affirmed.

Batterjee added this year will see no major expansions, except for Jeddah Hospital at a total cost of nearly SAR 400 million. The group experienced major expansions in the UAE, Saudi Arabia and Egypt in the last few years. Transformation is underway despite fierce competition.

Elsewhere, Batterjee said that the group’s hospitals in Egypt were undoubtedly hurt by exchange rates in Egypt, noting that profits are rising as there is an ample opportunity for the group in Egypt amid weak competition.