Saudi Kayan Petrochemical Co. reported a net income of SAR 472 million in Q3 2018, growing 23.8 percent year-on-year or YoY (-46.3 percent quarter-on-quarter or QoQ). This is higher than the NCB Capital’s estimates of SAR 431 million but significantly lower than the consensus estimates of SAR 591 million.
“We believe the variance from our estimates is mainly due to higher than expected operating rates of 119 percent vs Q2 2018 of 115 percent and our estimates of 105 percent,” the brokerage firm said in an earnings review on Monday.
“Revenues stood at SAR 3.38 billion, increasing 24.9 percent YoY (-4.2 percent QoQ) and is 13.3 percent higher than our estimates,” it added.
NCB Capital also maintained its target price of SAR 19 post its Q3 earnings results (current price of SAR 15), while remaining Overweight on the stock.
However, the brokerage firm noted that the stock is trading at a 2019f PE of 11.9x, higher than the regional peers average of 11.6x.
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