SICO upgrades Hammadi, Mouwsat to ‘Buy’, remains ‘Neutral’ on Dallah

SICO Investment Bank upgraded its rating on Al Hammadi Company for Development and Investment, Mouwasat Medical Services Co., National Medical Care Co. (Care) and Middle East Healthcare Co. (Saudi German Hospital) from “Neutral” to “Buy”.

SICO also maintained a “Neutral” recommendation on Dallah Healthcare Co, the investment bank said in a report.

The Bahrain-based investment bank cut target prices of the Saudi healthcare companies, reviewing revenue as well as profit margins assumptions for 2019 and 2020 on lower number of patients.

Saudi healthcare providers Mouwasat and Care are SICO’s top picks in the industry.

“Care can capitalize on the expansions that were carried out in 2018 and Q1 2019, in addition to the profit margins’ potential rally due to pricing strategy and resource-efficiency policy,” SICO noted.

Mouwasat is the sole healthcare company which recorded a profit rise for the first nine months of 2019.

“The healthcare sector was the worst performer among other business divisions in the Kingdom, as corporate results were negatively surprising,” SICO added.

“Also, the decline in the patients’ number results in lower revenue and a slowdown in the new medical facilities, as the industry depends on expats,” the investment bank stated.