Aljazira Capital raised its target price for Al Hammadi Company for Development and Investment (Al Hammadi) to SAR 29 from SAR 26, in light of improved performance of Al Nuzha Hospital, maintaining its 'Neutral' rating.
The research firm said in a report that the company's strong financial results during Q3 2020 were driven by the higher number of patient admissions and referrals from the Ministry of Health during the three-month period, coupled with stronger performance of Al Nuzha Hospital and increased patient traffic as most people opted to stay in the country to avoid contracting COVID-19 while travelling.
It also expects Al Hammadi’s revenue growth and margins to be moderate from current levels.
Aljazira Capital also indicated that the improvement in capacity utilization at Al-Nuzha Hospital is likely to be the key revenue driver for the company, while margins should improve gradually with the stabilization of operations at the hospital.
It projects Al Hammadi's net profit to reach SAR 129.6 million in 2020, and SAR 142.9 million in 2021.
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