Retail subscription opens for Cherry Trading’s IPO at SAR 28/shr

Retail investors started today, Nov. 12, subscription to 1.8 million shares of Cherry Trading Co. on the Main Market (TASI) at SAR 28 each, finalized through the book-building process.

 

The retail offering will run for two days, the company said.

 

The retail tranche consists of 20% of the total shares on offer.

 

Last June, the Capital Market Authority (CMA) approved the company’s application to float nine million shares on TASI, representing 30% of its SAR 300 million capital, divided into 30 million shares at a par value of SAR 10 each. 

 

The institutional offering ended last week, with a coverage ratio of 85.6X.

 

This is the 10th IPO on TASI this year after Derayah Financial Co. on Feb. 20, Arabian Company for Agricultural & Industrial Investments (Entaj) on Feb. 26, and Umm Al Qura for Development and Construction Co. (Masar) on May 5. This is in addition to United Carton Industries Co. (UCIC) on May 27, flynas Co. on June 18, Specialized Medical Co. (SMC) on June 25, Sport Clubs Co. on July 8, Dar Al Majed Real Estate Co. (Al Majdiah) on Aug. 14, and Marketing Home Group for Trading Co. (Build Station) on Aug. 19.

 

Tadawul witnessed 14 IPOs last year, following listings by  Middle East Pharmaceutical Industries Co. (Avalon Pharma) on Jan. 30, Modern Mills for Food Products Co. on March 5, Miahona Co. and Dr. Soliman Abdulkader Fakeeh Hospital Co. (Fakeeh Care) on May 21, Saudi Manpower Solutions Co. (SMASCO) on May 26, Al Taiseer Group Talco Industrial Co. (TALCO) on May 28, Rasan Information Technology Co. on May 29, Almajed for Oud Co. on Sept. 15, Arabian Mills Co. on Sept. 18, Fourth Milling Co. (MC4) on Oct. 2, Tamkeen Human Resources Co. on Nov. 5, United International Holding Co. (Tasheel) on Nov. 19,  Almoosa Health Co. on Dec. 23 and Nice One Co. on Dec. 24.

 

Company Profile

 

Cherry Trading was founded in 1980 as a sole proprietorship owned by Mohammed Abdullah Turki Al-Dhayan. It was later transformed into a limited liability company and became a closed Saudi joint-stock company based in Riyadh in 2020. The company operates in car-rental services, covering both long-term and short-term leasing, and vehicle sales.

 

Below are the three main business divisions.

 

Long-term car leasing: This is the company’s largest revenue source, serving corporate clients, government entities, and medium-to-large enterprises through customized long-term leasing solutions with fixed-term contracts and comprehensive fleet management services.

 

Short-term car leasing: Offers daily, weekly, and monthly car rental services.

 

Vehicle sales: The company sells used vehicles from its own fleet through showrooms, online platforms, or direct sales to corporate clients.

 

Geographical Presence:

 

The company is headquartered in Riyadh, with operations across all major regions of Saudi Arabia: Central, Eastern, Western, Northern, and Southern.

 

Its network comprises 27 branches and nine fixed workshops, as well as 21 mobile workshops that provide maintenance services at client locations and in remote areas.

 

Cherry Trading plans to expand its branch network by assessing long-term site opportunities and developing new locations.

 

Fleet

 

The company’s fleet consists of 15,620 vehicles, of which 93.5% are allocated for long-term leasing contracts, while 6.5% are used for short-term (daily) rentals.

 

 

Cherry Trading aims to strengthen its long-term leasing segment by targeting small and medium enterprises (SMEs) by securing SAR 100 million in additional financing from Riyadh Bank and The Saudi Investment Bank (SAIB), enabling it to expand vehicle availability for SMEs.

 

Market Share

 

The company’s market share in the long-term vehicle leasing segment in Saudi Arabia rose from 7.7% in 2023 to 8.8% in 2024, up by 1.1% points, maintaining its fourth position in the sector for both years.

 

According to the prospectus, the total accumulated value of long-term leasing contracts reached SAR 1.2 billion as of Dec. 31, 2024, covering 14,597 leased vehicles.

 

 

Revenues

 

Cherry Trading reported 5% revenue growth in 2024 to SAR 454.7 million from SAR 431.8 million in 2023, driven by higher long-term leasing contract volumes.

 

Revenue from long-term leasing contracts surged by 33% to SAR 324.3 million in 2024 from  SAR 243.4 million in the previous year, raising its contribution to total revenues from 56% to 71%. 

 

Revenue Contribution by Segment (SAR mln)