A. Othaim Market
Retail Sector
AOTHAIM AB - 4001.SE
May 15, 2017
Abdullah Al Othaim Markets Co.
Q1 2017
Recommendation
Neutral
Fair Value (SAR)
010401
Price as of May 14, 2017
01.431
Expected Return
142.%
Tadawul Symbol
4001.SE
Company Data
52 Week High (SAR)
111.00
52 Week Low (SAR)
63.00
YTD Change
5.9%
3-Month Average Volume (Thousand Shares)
47
Market Cap. (SAR Million)
4,669
Market Cap. (USD Million)
1,245
Outstanding Shares (Million Shares)
45
Major Shareholders ( > 5% )
Othaim Holding Company
63422%
General Organization for Social Insurance
24.2%
Abdullah Saleh Ali Al Othaim
2411%
Othaim
The growth in net profit compared to Q1 2017 was fueled by growth in sales of
existing outlets and the expansion in opening new outlets and increased gross
and operating profit. It is worth mentioning that the company recorded a nonrecurring loss of SAR 3.5 million in Q1 2016 due to the damages caused by a fire
in one of the company's branches.
Compared with the previous quarter, the retailer usually reports the largest quarter bottom line in the fourth quarter, as the contribution of the quarter is normally inflated by the income from achieving annual sales targets even if it is not
accompanied by a similar level of revenues.
In Q1 2017, the retailing company reported sales of SAR 1,876 million compared
to SAR 1,606 million for Q1 2016, an increase of 16.8%. However, the top line
dipped by 2.7% QoQ from SAR 1,928 million in Q4 2016.
Gross profit in Q1 2017 reached SAR 320.13 million surging 20% compared to
SAR 265.5 million in Q1 2016, but slid 11.7% from SAR 362.66 million in Q4
2016. Therefore, the gross margin improved to 17% up from 16.5% in Q1
2016.
52-week Stock Price Movement
120
Abdullah Al Othaim Markets Co. disclosed the preliminary results for Q1 2017
reporting net profit of SAR 60.15 million compared to SAR 46.62 million for the
same period last year displaying an increase of 29.02%, nevertheless the bottom
line plummeted by 37% QoQ from SAR 95.5 million in Q4 2016.
Tad awu l In dex
110
Operating profit jumped SAR 64.44 million soring 28.6% versus SAR 50.11 million in Q1 2016 and shrank by 39.1% from SAR 105.9 million in Q4 2016. Thus
the operating profit margin edged to 3.4% versus 3.12% in Q1 2016.
100
90
80
Net profit for Q1 2017 came in line with our estimate of SAR 57 million and the
analysts’ consensus of SAR 55.73 million.
70
60
Source: Tadawul
Quarterly Sales (SAR mn) and ROS
Sales
2,200
2,000
1,800
1,600
1,400
1,200
1,000
ROS
6%
5%
4%
3%
2%
1%
0%
Source: Company Filings, Albilad Capital Research Estimates
Ahmed A. Hindawy, CFA
Senior Financial Analyst
[email protected]
For more information, please contact::
Turki Fadaak
Research & Advisory Manager
[email protected]
We expect the growth in annual sales to continue this year due to the defensive
nature of the sector and the expansion of the company's network inside and
outside the Kingdom. The second quarter is also forecasted to coincide with robust sales fueled by the seasonal pickup in demand in the holy month of Ramadan. Our valuation maintained at SAR104.4 per share.
FY - Ending December
6100A
6101A
6102A
6103E
EV/EBITDA
15.27
14.42
12.56
10.39
EV/Sales
0.89
0.81
0.67
0.56
P/E
21.44
19.94
20.02
12.34
Dividend Yield
1.7%
2.0%
2.0%
2.9%
P/BV
4.83
4.17
3.71
3.02
P/Revenue
0.88
0.76
0.64
0.59
Current Ratio
0.64
0.83
0.75
0.91
14.5%
15.0%
18.7%
8.8%
4.77
5.13
5.11
8.29
Revenue Growth
EPS (SAR)
Source: Company Filings, Albilad Capital Research Estimates
1
A. Othaim Market
Retail Sector
AOTHAIM AB - 4001.SE
May 15, 2017
Income Statement (SAR mn)
2013A
2014A
2015A
2016A
2017E
Sales Revenue
0.14141
1.61045
2.1.144
7,171.7
7,801.6
Rent Revenue
Total Revenues
COGS
COGS/Sales
SG&A
SG&A/Sales
EBITDA
EBITDA Margin
Depreciation and Amortization
EBIT
EBIT Margin
Net Interest Income
Investment Income
Others *
Pre-Tax Income
Tax and Zakat
Net Income
Minority
1044
1644
2646
69.0
75.0
0.2.044
1..1043
2.15441
7,240.7
7,876.6
..34141
0..0340
0.51446
5,857.3
6,368.5
%4043
%4641
%4141
80.9%
80.9%
14045
21044
41145
998.9
1,086.7
%0642
%064.
%0041
13.8%
13.8%
621
.11
..5
384
421
%143
%144
%142
5.3%
5.4%
5641
01645
06540
149.2
172.5
03640
61641
61544
235.2
248.9
%.436
%.446
%.400
3.25%
3.16%
)342(
)346(
)541(
(17.2)
(13.2)
6340
614.
634.
25.4
25.9
043
046
241
(17.3)
119.1
05341
60544
6.041
226.0
380.6
042
14.
14.
8.4
10.3
05640
60042
66546
217.7
370.3
)140(
)146(
)043(
(12.4)
(2.8)
ROS
05641
60044
6.145
230.0
373.1
%046
%040
%.44
3.2%
4.8%
Balance Sheet (SAR mn)
2013A
2014A
2015A
2016A
2017E
0014.
04.41
.6540
375.6
640.0
734.8
NAI
Cash and Marketable Securities
Inventory
Others
Total ST Assets
Net Fixed Assets
Projects Under Implementation
Intangible assets
Others
Total LT Assets
Total Assets
Short Term Debt and CPLTD
Accounts Payable
Accrued Expenses
Others
Total ST Liabilities
Total Long Term Debt
Other Noncurrent Liabilities
Equity
Total Liabilities and Equity
.2441
02141
21041
680.5
514.
0.340
6234.
212.5
260.0
12442
34240
0.61144
1,268.5
1,634.8
0.0544.
0.62342
0.04243
1,921.6
1,818.1
6041
5145
61446
91.2
86.6
0045
0.40
0040
9.5
6.5
05142
05341
04340
187.5
185.4
0.0..40
0.12540
0.45.40
2,209.8
2,096.6
6.11641
6..1146
..15046
3,478.4
3,731.4
06644
00441
6064.
187.2
154.6
3144.
43541
51442
1,128.8
1,240.2
06.42
60.4.
6304.
355.3
386.5
240
442
544
14.6
21.5
0.10046
0.60540
0.01641
1,685.8
1,802.8
0.141
06141
.5541
412.3
257.7
1140
1446
0.440
140.7
148.2
41141
51642
0.01042
1,239.6
1,522.7
6.11641
6..1146
..15046
3,478.4
3,731.4
Source: Company Filings, Albilad Capital Research Estimates
Presentation of financial statements may differ from the company’s presentation. However, there is no impact on the final results.
*FY 2017 including capital gain.
2
A. Othaim Market
Retail Sector
AOTHAIM AB - 4001.SE
May 15, 2017
Albilad Capital Rating Methodology
Al-Bilad Capital uses its own evaluation structure, and its recommendations are based on quantitative and qualitative data collected by the analysts. Moreover,
the evaluation system places covered shares under one of the next recommendation areas based on the closing price of the market, the fair value that we set
and the possibility of ascent/descent.
Overweight:
The Target share price exceeds the current share price by ≥ 10%.
Neutral:
The Target share price is either more or less than the current share price by < 10%
Underweight:
The Target share price is less than the current share price by ≥ 10%.
To be Revised:
No target price had been set for one or more of the following reasons: waiting for more analysis, waiting for detailed financials , waiting
for more data to be updated, major change in company`s performance, change in market conditions or any other reason from Albilad Capital Research.
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