Saudi German Hospital's Q3 2019 net profit of SAR 33.2 million came significantly above Aljazira Capital and the consensus' estimates of SAR 8.8 million and SAR 6.4 million, respectively.
"Rise in net income was driven by double-digit revenue growth and a decline in operating expenses (OPEX). Higher patient traffic across the business segment spurred revenue growth," Aljazira Capital said in a recent earnings note.
The investment bank revised up its revenue and EPS forecasts for fiscal year 2019 to stand at SAR 1.42 billion and SAR 0.92, respectively from SAR 1.36 billion and SAR 0.42 earlier.
"We expect margins to remain under pressure in FY20 due to the commencement of operations at Dammam hospital. The company completed construction work at the hospital in June 2019. Operations and likely to expected to commence in Q1 2020.
Aljazira Capital maintained its "neutral" recommendation on the stock, keeping its target price unchanged at SAR 23.20.
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