Arqaam Capital maintains ‘Buy’ on Saudi Re, raises TP to SAR 14.70

Arqaam Capital highlighted that the sole Saudi reinsurer is positioned to benefit from growth opportunities in the home market and expected Saudi Re to double premium within three years as it was named exclusive reinsurer of the new compulsory Inherent Defect Insurance (IDI) for five years.  

Saudi Re continued to record double-digit premium growth of 30.1% year-on-year (YoY) in H1 2020, benefiting from both its increased credit rating (Moody’s A3) and the woes of its struggling regional competitors. 

Saudi Re has an attractive valuation and compelling growth prospects. The TP represents a growth opportunity of 46% from the current market price, which trades at less than its book value of 0.9, the report issuer added.