Combined Group Contracting Company - K.S.C. (Public) (KWSE:CGC) - Share price, News & Analysis

Q: What is the Fair Price of CGC when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

CGC (KWD0.45) is trading below our estimate of [[fair value]] (KWD0.55)

CGC fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	0/6
Past Performance	2/6
Financial Health	6/6
Dividends	3/6

CGC Stock Overview

Combined Group Contracting Company - K.S.C.

Rewards

Trading at 18.1% below our estimate of its fair value

Became profitable this year

Risk Analysis

Earnings have declined by 19% per year over past 5 years

Unstable dividend track record

Large one-off items impacting financial results

Combined Group Contracting Company - K.S.C. (Public) Competitors

Kuwait Company for Process Plant Construction and Contracting K.S.C.P

KWSE:KCPC

د.ك40.6m

Kuwait Portland Cement K.P.S.C

KWSE:PCEM

د.ك88.3m

Galliford Try Holdings

LSE:GFRD

UK£183.9m

Gulf Cable and Electrical Industries Company - KPSC

KWSE:CABLE

د.ك279.1m

Price History & Performance

Summary of all time highs, changes and price drops for Combined Group Contracting Company - K.S.C. (Public)
Historical stock prices
Current Share Price	د.ك0.45
52 Week High	د.ك0.47
52 Week Low	د.ك0.29
Beta	0.52
1 Month Change	13.13%
3 Month Change	2.75%
1 Year Change	49.33%
3 Year Change	135.20%
5 Year Change	-8.05%
Change since IPO	37.75%

Shareholder Returns

	CGC	KW Construction	KW Market
7D	2.8%	1.6%	2.2%
1Y	49.3%	6.2%	14.8%

Return vs Industry: CGC exceeded the KW Construction industry which returned 6.2% over the past year.

Return vs Market: CGC exceeded the KW Market which returned 14.8% over the past year.

Price Volatility

Is CGC's price volatile compared to industry and market?
CGC volatility
CGC Average Weekly Movement	5.9%
Construction Industry Average Movement	6.1%
Market Average Movement	5.9%
10% most volatile stocks in KW Market	9.4%
10% least volatile stocks in KW Market	3.4%

Stable Share Price: CGC is not significantly more volatile than the rest of KW stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: CGC's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1965	n/a	Sulaiman Al Ma’rouf	https://www.cgc-kw.com/CGC

Combined Group Contracting Company - K.S.C. (Public), together with its subsidiaries, operates in the construction industry in Kuwait and other Gulf countries. It carries out general contracting, mechanical, engineering, and construction works, including buildings, ways, bridges, and their related works. The company also produces and imports various building materials; trades in, packs, and packages cement, sand, and related materials; undertakes ready-mix works; manufactures and executes dye works and decorations to execute the civil works; and produces asphalt, as well as provides real estate services.

Combined Group Contracting Company - K.S.C. (Public) Fundamentals Summary

How do Combined Group Contracting Company - K.S.C. (Public)'s earnings and revenue compare to its market cap?
CGC fundamental statistics
Market Cap	د.ك76.64m
Earnings (TTM)	د.ك10.54m
Revenue (TTM)	د.ك149.18m

7.3x

P/E Ratio

0.5x

P/S Ratio

Is CGC overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
CGC income statement (TTM)
Revenue	د.ك149.18m
Cost of Revenue	د.ك135.51m
Gross Profit	د.ك13.67m
Other Expenses	د.ك3.13m
Earnings	د.ك10.54m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.062
Gross Margin	9.16%
Net Profit Margin	7.07%
Debt/Equity Ratio	57.0%

How did CGC perform over the long term?

See historical performance and comparison

Dividends

5.6%

Current Dividend Yield

41%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is CGC undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for CGC?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for CGC. This is calculated by dividing CGC's market cap by their current preferred multiple.
What is CGC's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	د.ك76.64m

CGC key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.4x
Enterprise Value/EBITDA	6.6x
PEG Ratio	n/a

Price to Earnings Ratio vs Peers

How does CGC's PE Ratio compare to its peers?

CGC PE Ratio vs Peers

The above table shows the PE ratio for CGC vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	20.2x
KCPC Kuwait Company for Process Plant Construction and Contracting K.S.C.P	21.4x	n/a	د.ك40.6m
PCEM Kuwait Portland Cement K.P.S.C	11.2x	n/a	د.ك88.3m
GFRD Galliford Try Holdings	34.7x	35.5%	UK£183.9m
CABLE Gulf Cable and Electrical Industries Company - KPSC	13.3x	n/a	د.ك279.1m
CGC Combined Group Contracting Company - K.S.C. (Public)	7.3x	n/a	د.ك76.6m

Forward PE

Price-To-Earnings vs Peers: CGC is good value based on its Price-To-Earnings Ratio (7.3x) compared to the peer average (20.2x).

Price to Earnings Ratio vs Industry

How does CGC's PE Ratio compare vs other companies in the Asian Construction Industry?

Price-To-Earnings vs Industry: CGC is good value based on its Price-To-Earnings Ratio (7.3x) compared to the Asian Construction industry average (13x)

Price to Earnings Ratio vs Fair Ratio

What is CGC's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

CGC PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	7.3x
Fair PE Ratio	n/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate CGC's Price-To-Earnings Fair Ratio for valuation analysis.

Share Price vs Fair Value

What is the Fair Price of CGC when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: CGC (KWD0.45) is trading below our estimate of fair value (KWD0.55)

Significantly Below Fair Value: CGC is trading below fair value, but not by a significant amount.

Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate CGC's PEG Ratio to determine if it is good value.

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Future Growth

How is Combined Group Contracting Company - K.S.C. (Public) forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

15.4%

Forecasted Capital Goods industry annual growth in earnings

In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Combined Group Contracting Company - K.S.C. (Public) has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.

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Examine whether Combined Group Contracting Company - K.S.C. (Public) is trading at an attractive price based on how much it is expected to earn in the future, and relative to its industry peers and the wider market.

Past Performance

How has Combined Group Contracting Company - K.S.C. (Public) performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-19.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: CGC has a large one-off gain of KWD7.1M impacting its March 31 2022 financial results.

Growing Profit Margin: CGC became profitable in the past.

Past Earnings Growth Analysis

Earnings Trend: CGC's earnings have declined by 19% per year over the past 5 years.

Accelerating Growth: CGC has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: CGC has become profitable in the last year, making it difficult to compare its past year earnings growth to the Construction industry (4.5%).

Return on Equity

High ROE: CGC's Return on Equity (23.1%) is considered high.

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Financial Health

How is Combined Group Contracting Company - K.S.C. (Public)'s financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: CGC's short term assets (KWD168.3M) exceed its short term liabilities (KWD107.0M).

Long Term Liabilities: CGC's short term assets (KWD168.3M) exceed its long term liabilities (KWD55.1M).

Debt to Equity History and Analysis

Debt Level: CGC has more cash than its total debt.

Reducing Debt: CGC's debt to equity ratio has reduced from 176% to 57% over the past 5 years.

Debt Coverage: CGC's debt is well covered by operating cash flow (42.4%).

Interest Coverage: CGC's interest payments on its debt are well covered by EBIT (9.5x coverage).

Balance Sheet

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Dividend

What is Combined Group Contracting Company - K.S.C. (Public) current dividend yield, its reliability and sustainability?

Dividend Score

2/6

Dividend Score 2/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

5.58%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: CGC's dividend (5.58%) is higher than the bottom 25% of dividend payers in the KW market (2.52%).

High Dividend: CGC's dividend (5.58%) is low compared to the top 25% of dividend payers in the KW market (6.23%).

Stability and Growth of Payments

Stable Dividend: CGC's dividend payments have been volatile in the past 10 years.

Growing Dividend: CGC's dividend payments have fallen over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (40.6%), CGC's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonable cash payout ratio (61.9%), CGC's dividend payments are covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

5.7yrs

Average board tenure

CEO

Sulaiman Al Ma’rouf

no data

Tenure

Mr. Sulaiman Abdulrahman Al Ma’rouf serves as the Chief Executive Officer and Executive Director of Combined Group Contracting Company - K.S.C. (Public).

Board Members

Experienced Board: CGC's board of directors are considered experienced (5.7 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/07/02 00:00
End of Day Share Price	2022/06/30 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31