Expect a Revenue Jump of 22.08% from Saudi Energy's Ambitious Plans

Saudi Electricity looks less like a growth story and more like a cashflow utility backed by government support, with steady demand as the Kingdom builds out new cities and big infrastructure. The catch is that heavy borrowing and huge buildout spending can limit what shareholders actually keep, even if the lights stay on and the payout stays steady.Read more

ر.س18

5.1% undervalued

Valtersa's

Fair Value

Specialized Sector Valuation: Residual Income (RI) ModelYou pointed out the importance of fair value assuming a 3-year horizon based on Residual Income. This is the most accurate sectoral model for utilities, calculated as follows:$$V_0 = BV_0 + \sum_{t=1}^{n} \frac{NI_t - (r_e \times BV_{t-1})}{(1 + r_e)^t}$$ Where:$BV_0$: Current Book Value per share (~19.5 SAR).$NI_t$: Expected Net Income.$r_e$: Target Cost of Equity, assumed at 8.0% given the defensive nature of the company.Residual Income = Net Income - (Cost of Equity × Book Value).Application to SEC:Due to the Mudaraba instrument and regulatory constraints, the company's ROE is roughly 3.5% to 4.5%, which is lower than the Cost of Equity ($r_e = 8\%$).Since $ROE < r_e$, the "Residual Income" is technically negative. This is the precise scientific and logical explanation for why the stock currently trades at (16.73 SAR), which is below its book value (19.5 SAR). The market discounts this difference.Fair Value in 3 Years (2029):Expecting slight operational efficiency improvements (smart meters and green financing), and assuming ROE stabilizes at 5.5% while maintaining the fixed payout policy (0.70 SAR), the fair value calculated using the RI model for the next 3 years centers in the range of 17.80 to 18.50 SAR.

ACWA Power

2082: Lower Revenue Outlook Will Outweigh Benefits From Recent Partnerships

ACWA Power is growing fast in renewables, desalination, and green hydrogen, but a big chunk of its projects are still being built and that makes future results hard to predict. The bigger question is whether heavy borrowing and dependence on government-backed deals can keep paying off if construction delays, regulation changes, or tougher competition show up.Read more

ر.س145

37.6% overvalued

AnalystConsensusTarget's

Fair Value

Revenue

22.49% p.a.

Profit Margin

33.17%

Future PE

47.15x

Price in 2029

ر.س248.96

ACWA Power

Heavy Capital Expenditures And Execution Risks Will Impair Future Margins

Key Takeaways Sustained high capital expenditure, tight credit, and a heavy pipeline of unfinished projects expose margins and cash flow to financing and execution risks amid global uncertainty. Rising competition, falling electricity prices, and dependence on government contracts threaten future profitability and create significant revenue volatility and concentration risks.Read more

ر.س100

99.5% overvalued

AnalystLowTarget's

Fair Value

Revenue

13.34% p.a.

Profit Margin

45.23%

Future PE

29.09x

Price in 2029

ر.س172.34

ACWA Power

Global Decarbonization And Rising Electricity Demand Will Create Renewable Opportunities

Key Takeaways Accelerated project execution, strong PPA pipeline, and portfolio growth position the company for outperformance in revenue, earnings, and long-term cash flow stability. Early leadership in green hydrogen and international desalination, along with rising investor demand and geographic expansion, enhance margins, risk diversification, and potential for rapid expansion.Read more

ر.س245

18.6% undervalued

AnalystHighTarget's

Fair Value

Revenue

22.81% p.a.

Profit Margin

37.67%

Future PE

67.32x

Price in 2029

ر.س422.56

Saudi Energy

Long-Term Grid Expansion And Energy Transition Will Support A Stable Outlook

Catalysts About Saudi Energy Saudi Energy operates an integrated electricity generation, transmission and distribution business across the Kingdom of Saudi Arabia. What are the underlying business or industry changes driving this perspective?Read more