Shares of Saudi Kayan Petrochemical Co. dropped nearly 6 percent to SAR 13.36 in the first hour of trading on Tadawal on Monday.
The scrip declined as the company reported a net loss after zakat and tax of SAR 197.5 million for the first quarter of 2019 compared to a net profit of SAR 462.6 million a year earlier.
“The stock is down as Saudi Kayan has reported a loss versus expectations of a profit by the market,” Muhammad Faisal Potrik, head of research at Riyad Capital, told Argaam.
“Prices of monoethylene glycol (MEG) have taken a beating due to a supply glut, which is the primary reason for the loss. Higher financial charges have also contributed,” he added.
Riyadh Capital expects an improvement in the second quarter 2019 and continues to recommend a “buy” rating on the stock with a target price of a SAR 18 per share.
Write to Parag Deulgaonkar at parag.d@argaamplus.com
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