Itqan Capital expects Mouwasat to report higher profit growth in Q2 2021

Mouwasat Medical Services Co. is expected to continue reporting strong top-line and bottom-line growth during Q2 2021, supported by growth from the existing six hospitals and a rise in reported COVID cases, Itqan Capital said in a new report.

However, the company is forecast to face some pressure on margins as operations in the new hospitals begin from H2 2021. Nevertheless, the top-line growth is likely to remain strong.

The brokerage expects tighter gross margins during H2 2021, as the new Madinah and Dammam hospitals' expansion commences operations.

Mouwasat's new projects will reflect positively on its profitability within 18 months of the start of operations (end of 2022).

The company reported strong earnings growth in Q1 2021, supported by higher margins and robust top-line growth, the brokerage noted.

Itqan Capital revised its recommendation to "Neutral" for the stock, setting the target price at SAR 194.1 per share.