Al Rajhi Capital initiates coverage of Saudi Jahez with target price of $293/share

Riyadh-based brokerage Al Rajhi Capital has initiated protection of Saudi meals supply app Jahez with a goal worth of 1,100 riyals ($293) per share.

The inventory closed buying and selling on Monday at 1,195 riyals, up 5.7%.

In a latest report, Al Rajhi Capital mentioned Jahez benefitted considerably from the pandemic, which launched a brand new behaviour of on-line meals consumption in KSA.

In consequence, the corporate’s revenues grew almost thrice y-o-y in 2020 and once more 2.7x y-o-y in 2021, the expansion coming from a rise in market dimension in addition to growing market share. The corporate gained market share from 13% in 2019 to c.30% in 2021 primarily by way of decrease take charges than its rivals and increasing the community of retailers and supported by elevated supply companions.

The corporate has given common income progress steerage of 45-55% between 2021 and 2023. “We consider two components decide the longer term course for the corporate: a) extent of penetration of on-line meals delivery- as a consumption behaviour b) depth of competitors.”

The inventory trades at 101x 2021 earnings and 64x 2022e earnings and therefore could be delicate to progress charges.

(Writing by Brinda Darasha; enhancing by Seban Scaria)

brinda.darasha@lseg.com