Itqan Capital expects decline in Mouwasat’s Q2 2020 profit

Itqan Capital expects a drop in Mouwasat Medical Services Company’s (Mouwasat) utilization rates and profit in the second quarter of 2020, before normalizing in the third quarter of the year.

The impact of COVID-19 is expected to reflect more evidently in Q2 2020 results due to low utilization rates in April and May, the brokerage firm noted.

However, it maintained a positive outlook for the company, despite short term risks from COVID-19, as it is expected to weather the impact of lower footfall in Q2 2020.

Meanwhile, the essentiality of healthcare services, along with Mouwasat’s planned capacity expansion in H2 2020, will aid in fast top-line recovery. In addition, the expansion plans are also set to support top-line recovery in 2021.

Itqan Capital revised its recommendation to “overweight”, lowering the target price to SAR 101.5 from SAR 105.4 a share.