Al Rajhi Capital maintains “Overweight” recommendation for Leejam Sports

Leejam Sports Company’s Q3 2019 results came mostly in-line with analysts’ estimates, Al Rajhi Capital said in a research note.

The brokerage firm said that the recent decline in current share price presents a good buying opportunity for the medium as well as long-term.

“Leejam has reached a total subscription base of 292,000 members of which 26% are females. This is way ahead than what was predicted for the entire 2019,” the note said.

“We are expecting the total subscribers to reach 338,094 by the end of 2020,” the firm noted.

To sustain the competition from small players, Leejam is planning to launch “small box express” concept, which will include relatively smaller clubs and will focus more on group classes competing with the likes of Orangetheory, Nine realms and Cross-Fit.

“We are extremely bullish on Leejam due to its dominant position in the fitness industry, increasing consumer spending towards fitness, and government’s initiatives to increase the physical activities among locals to combat various diseases,” the note added.

The brokerage firm maintained its “Overweight” recommendation with a share target price of SAR 95 per share from current SAR 90 per share.