Savola Group (SASE:2050) - Share price, News & Analysis

Q: What is the Fair Price of 2050 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

2050 (SAR33.5) is trading below our estimate of [[fair value]] (SAR143.48)

2050 fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	4/6
Past Performance	1/6
Financial Health	1/6
Dividends	0/6

2050 Stock Overview

Savola Group Company, together with its subsidiaries, produces, markets, and distributes food products.

Rewards

Trading at 76.7% below our estimate of its fair value

Earnings are forecast to grow 22.45% per year

Risk Analysis

Interest payments are not well covered by earnings

Large one-off items impacting financial results

Profit margins (1.3%) are lower than last year (4.1%)

Savola Group Competitors

Almarai

SASE:2280

ر.س54.0b

Saudia Dairy & Foodstuff

SASE:2270

ر.س5.1b

Halwani Bros

SASE:6001

ر.س2.7b

Arabian Food & Dairy Factories

SASE:9536

ر.س237.2m

Price History & Performance

Summary of all time highs, changes and price drops for Savola Group
Historical stock prices
Current Share Price	ر.س33.50
52 Week High	ر.س40.60
52 Week Low	ر.س31.20
Beta	0.31
1 Month Change	1.52%
3 Month Change	-7.07%
1 Year Change	-17.28%
3 Year Change	4.04%
5 Year Change	-31.35%
Change since IPO	392.18%

Recent News & Updates

Jul 03

Savola Group (TADAWUL:2050) Shareholders Will Want The ROCE Trajectory To Continue

There are a few key trends to look for if we want to identify the next multi-bagger. Typically, we'll want to notice a...

Shareholder Returns

	2050	SA Food	SA Market
7D	1.7%	1.6%	2.6%
1Y	-17.3%	-14.1%	20.7%

Return vs Industry: 2050 underperformed the SA Food industry which returned -14.1% over the past year.

Return vs Market: 2050 underperformed the SA Market which returned 20.7% over the past year.

Price Volatility

Is 2050's price volatile compared to industry and market?
2050 volatility
2050 Average Weekly Movement	4.4%
Food Industry Average Movement	5.0%
Market Average Movement	5.1%
10% most volatile stocks in SA Market	7.9%
10% least volatile stocks in SA Market	3.3%

Stable Share Price: 2050 is not significantly more volatile than the rest of SA stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: 2050's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1979	n/a	Waleed bin Khalid Yaseen Fatani	https://www.savola.com

Savola Group Company, together with its subsidiaries, produces, markets, and distributes food products. It offers edible oils, vegetable ghee, sugar, pasta, bakery products, specialty fats, seafood, confectionery, and frozen food products, as well as snacks, cooking ingredients, and pulses. The company also engages in the agro cultivation, services and maintenance, trading and distribution, restaurant, real estate development, e-commerce, and fund and investment management activities.

Savola Group Fundamentals Summary

How do Savola Group's earnings and revenue compare to its market cap?
2050 fundamental statistics
Market Cap	ر.س17.85b
Earnings (TTM)	ر.س338.95m
Revenue (TTM)	ر.س26.20b

52.7x

P/E Ratio

0.7x

P/S Ratio

Is 2050 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
2050 income statement (TTM)
Revenue	ر.س26.20b
Cost of Revenue	ر.س21.76b
Gross Profit	ر.س4.45b
Other Expenses	ر.س4.11b
Earnings	ر.س338.95m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.64
Gross Margin	16.98%
Net Profit Margin	1.29%
Debt/Equity Ratio	93.8%

How did 2050 perform over the long term?

See historical performance and comparison

Dividends

0.6%

Current Dividend Yield

31%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is 2050 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

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

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 2050?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 2050. This is calculated by dividing 2050's market cap by their current preferred multiple.
What is 2050's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	ر.س17.85b

2050 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	1.1x
Enterprise Value/EBITDA	19.4x
PEG Ratio	2.3x

Price to Earnings Ratio vs Peers

How does 2050's PE Ratio compare to its peers?

2050 PE Ratio vs Peers

The above table shows the PE ratio for 2050 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	32.8x
2280 Almarai	33x	12.7%	ر.س54.0b
2270 Saudia Dairy & Foodstuff	24.7x	11.6%	ر.س5.1b
6001 Halwani Bros	34.1x	17.2%	ر.س2.7b
9536 Arabian Food & Dairy Factories	39.4x	n/a	ر.س237.2m
2050 Savola Group	52.7x	22.5%	ر.س17.9b

Price-To-Earnings vs Peers: 2050 is expensive based on its Price-To-Earnings Ratio (52.7x) compared to the peer average (32.8x).

Price to Earnings Ratio vs Industry

How does 2050's PE Ratio compare vs other companies in the Asian Food Industry?

Price-To-Earnings vs Industry: 2050 is expensive based on its Price-To-Earnings Ratio (52.7x) compared to the SA Food industry average (52.7x)

Price to Earnings Ratio vs Fair Ratio

What is 2050'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.

2050 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	52.7x
Fair PE Ratio	n/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate 2050's Price-To-Earnings Fair Ratio for valuation analysis.

Share Price vs Fair Value

What is the Fair Price of 2050 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 2050 (SAR33.5) is trading below our estimate of fair value (SAR143.48)

Significantly Below Fair Value: 2050 is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.

Discover undervalued companies

Future Growth

How is Savola Group forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

Future Growth Score

4/6

Future Growth Score 4/6

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

22.5%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 2050's forecast earnings growth (22.5% per year) is above the savings rate (8.9%).

Earnings vs Market: 2050's earnings (22.5% per year) are forecast to grow faster than the SA market (-0.5% per year).

High Growth Earnings: 2050's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: 2050's revenue (1.9% per year) is forecast to grow faster than the SA market (-3.5% per year).

High Growth Revenue: 2050's revenue (1.9% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 2050's Return on Equity is forecast to be low in 3 years time (11.5%).

Discover growth companies

Past Performance

How has Savola Group performed over the past 5 years?

Past Performance Score

1/6

Past Performance Score 1/6

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

23.7%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 2050 has a large one-off loss of SAR432.5M impacting its March 31 2022 financial results.

Growing Profit Margin: 2050's current net profit margins (1.3%) are lower than last year (4.1%).

Past Earnings Growth Analysis

Earnings Trend: 2050 has become profitable over the past 5 years, growing earnings by 23.7% per year.

Accelerating Growth: 2050's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 2050 had negative earnings growth (-62%) over the past year, making it difficult to compare to the Food industry average (-19.3%).

Return on Equity

High ROE: 2050's Return on Equity (5.5%) is considered low.

Discover strong past performing companies

Financial Health

How is Savola Group's financial position?

Financial Health Score

1/6

Financial Health Score 1/6

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

Financial Position Analysis

Short Term Liabilities: 2050's short term assets (SAR9.2B) do not cover its short term liabilities (SAR10.8B).

Long Term Liabilities: 2050's short term assets (SAR9.2B) do not cover its long term liabilities (SAR9.8B).

Debt to Equity History and Analysis

Debt Level: 2050's net debt to equity ratio (72.8%) is considered high.

Reducing Debt: 2050's debt to equity ratio has reduced from 101.2% to 93.8% over the past 5 years.

Debt Coverage: 2050's debt is not well covered by operating cash flow (19.9%).

Interest Coverage: 2050's interest payments on its debt are not well covered by EBIT (1.9x coverage).

Balance Sheet

Discover healthy companies

Dividend

What is Savola Group current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

0.60%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: 2050's dividend (0.6%) isn’t notable compared to the bottom 25% of dividend payers in the SA market (1.84%).

High Dividend: 2050's dividend (0.6%) is low compared to the top 25% of dividend payers in the SA market (4.3%).

Stability and Growth of Payments

Stable Dividend: 2050 is not paying a notable dividend for the SA market, therefore no need to check if payments are stable.

Growing Dividend: 2050 is not paying a notable dividend for the SA market, therefore no need to check if payments are increasing.

Earnings Payout to Shareholders

Earnings Coverage: 2050 is not paying a notable dividend for the SA market.

Cash Payout to Shareholders

Cash Flow Coverage: 2050 is not paying a notable dividend for the SA market.

Discover strong dividend paying companies

Management

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

4.2yrs

Average management tenure

CEO

Waleed bin Khalid Yaseen Fatani

1.58yrs

Tenure

Mr. Waleed bin Khalid Yaseen Fatani serves as Non-Executive Director at Almarai Company since January 1, 2021. He serves as Group Chief Executive Officer at Savola Group Company since January 1, 2021. He s...

Leadership Team

Experienced Management: 2050's management team is considered experienced (4.2 years average tenure).

Board Members

Experienced Board: 2050's board of directors are considered experienced (3.1 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	2022/08/12 00:00
End of Day Share Price	2022/08/11 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31