Mouwasat Medical Services Co.’s Q2 2020 net profit of SAR 116 million exceeded Al Rajhi Capital’s and consensus estimates of SAR 81 million and SAR 83 million, respectively, the brokerage firm said in an earnings review.
The brokerage firm attributed the results of the company to higher revenue and lower operating expenses as well as lower finance cost.
The Q2 performance is in-line with the industry, wherein benefit from COVID-19 was witnessed along with improvement in costs, the note said.
Al Rajhi Capital added that the company outperformed its peers significantly in terms of gross and net margins during the quarter, adding that similar performance is expected going forward.
The brokerage firm expects the company’s net profit to reach SAR 513 million in the fiscal year 2020, and SAR 611 million in 2021, compared to a profit of SAR 421 million in 2019.
Al Rajhi Capital revised the target price to SAR 123 per share from SAR 109, and also revised its rating on the stock to “Overweight” from “Neutral”.
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