Friday , May 20 2022

AlHokair is a research firm that maintains its rating and reduces its target


Al Rajhi Capital, including Fawaz Abdulaziz Al Hokair & Co. and kept the target price down to SAR 24.

In a report published on Sunday, the research firm said it expects the current local store sales to continue to weaken in the near term, as the target price reduction is low, due to the low cost of non-significant goods and lower customer base.

The results of the company for the second quarter ended September 30, 2018 were lower than their forecasts and analysts were below the average estimate of 30 and 46 million rials, respectively.

Al Rajhi Capital said the company's income would decline due to the closure of non-profitable branches.

The company has changed its strategy to increase its profitability, rather than expanding its number of stores. The company is currently focusing on closing non-profitable stores while increasing its cost-effectiveness to increase profit margins.

"In the future, we expect AlHokair to restructure and change the business model to diversify revenue streams."

In the near term, the company's earnings are expected to remain low as the consumer basket changes and the customer base is falling (the decline of the foreign population), affected by weak consumer sentiment.

"The positive reflection of the company's international division of business and the expansion of value-added products and the sale of the final sales of the cosmetic products division will lead to a decline in existing store sales in the medium term."

The Company's financial statements for the second quarter ended September 30, 2018, showing a net profit increase of 6,8 million SAR for the same period last year, up 46.6 percent to SAR 10.03 million.

The stock market declined by 2.83% on the market in the 22.70 riyals session.

News | Al-Hayat Al-Youm: It is a research company that maintains the Al-Hokair classification and reduces the target of the stock.

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