One of eXtra's branches
United Electronics Co. (eXtra) reported a strong set of Q4 2020 results, with net income increasing 41.2% year-on-year (YoY) to a record high of SAR 101.8 million. This is higher than NCB Capital and consensus estimates of SAR 73.5 million and SAR 80.0 million, respectively, the brokerage firm said in an earning review report.
The positive variance was mainly due to higher than expected gross margins supported by increasing contribution from consumer financing business and e-commerce sector, in addition to lower than expected operating expenses, the report added.
The report added that eXtra’s stock is a favorite pick in 2021, indicating that consumer finance services are a major driver for future profit growth.
NCB Capital had previously issued an “overweight” recommendation on eXtra’s share, with a target price of SAR 90.80 per share.
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