National Medical Care (SASE:4005) - Share price, News & Analysis

Q: What is the Fair Price of 4005 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

4005 (SAR65.6) is trading below our estimate of [[fair value]] (SAR86.13)

4005 fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	2/6
Past Performance	4/6
Financial Health	6/6
Dividends	1/6

4005 Stock Overview

National Medical Care Company engages in the business to establish, own, equip, operate, manage, and maintain healthcare facilities in the Kingdom of Saudi Arabia.

Rewards

Trading at 23.8% below our estimate of its fair value

Revenue is forecast to grow 5.49% per year

Earnings grew by 35.4% over the past year

Risk Analysis

High level of non-cash earnings

National Medical Care Competitors

Middle East Healthcare

SASE:4009

ر.س3.1b

Ayyan Investment

SASE:2140

ر.س1.5b

Al Hammadi Company For Development and Investment

SASE:4007

ر.س6.7b

Dallah Healthcare

SASE:4004

ر.س10.4b

Price History & Performance

Summary of all time highs, changes and price drops for National Medical Care
Historical stock prices
Current Share Price	ر.س65.60
52 Week High	ر.س84.60
52 Week Low	ر.س50.70
Beta	0.43
1 Month Change	27.13%
3 Month Change	-6.29%
1 Year Change	-3.39%
3 Year Change	25.67%
5 Year Change	54.28%
Change since IPO	-46.23%

Recent News & Updates

Aug 15

National Medical Care (TADAWUL:4005) Is Doing The Right Things To Multiply Its Share Price

If we want to find a potential multi-bagger, often there are underlying trends that can provide clues. Typically, we'll...

May 13

National Medical Care's (TADAWUL:4005) Returns On Capital Are Heading Higher

Finding a business that has the potential to grow substantially is not easy, but it is possible if we look at a few key...

Shareholder Returns

	4005	SA Healthcare	SA Market
7D	15.7%	-1.5%	0.6%
1Y	-3.4%	12.6%	18.3%

Return vs Industry: 4005 underperformed the SA Healthcare industry which returned 15.6% over the past year.

Return vs Market: 4005 underperformed the SA Market which returned 20.6% over the past year.

Price Volatility

Is 4005's price volatile compared to industry and market?
4005 volatility
4005 Average Weekly Movement	5.9%
Healthcare Industry Average Movement	4.6%
Market Average Movement	5.0%
10% most volatile stocks in SA Market	8.0%
10% least volatile stocks in SA Market	3.2%

Stable Share Price: 4005 is not significantly more volatile than the rest of SA stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: 4005's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2003	n/a	Abdulaziz Alobaid	https://www.care.med.sa

National Medical Care Company engages in the business to establish, own, equip, operate, manage, and maintain healthcare facilities in the Kingdom of Saudi Arabia. The company operates Riyadh care hospital with a capacity of 325 beds; National hospital with a capacity of 459 beds; Family Health Care Center; and Care Company for Pharmaceutical and Medical Distribution. It also provides home healthcare services.

National Medical Care Fundamentals Summary

How do National Medical Care's earnings and revenue compare to its market cap?
4005 fundamental statistics
Market Cap	ر.س2.94b
Earnings (TTM)	ر.س141.89m
Revenue (TTM)	ر.س856.67m

20.7x

P/E Ratio

3.4x

P/S Ratio

Is 4005 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
4005 income statement (TTM)
Revenue	ر.س856.67m
Cost of Revenue	ر.س605.53m
Gross Profit	ر.س251.14m
Other Expenses	ر.س109.24m
Earnings	ر.س141.89m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	3.16
Gross Margin	29.32%
Net Profit Margin	16.56%
Debt/Equity Ratio	0.0%

How did 4005 perform over the long term?

See historical performance and comparison

Dividends

1.5%

Current Dividend Yield

32%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is 4005 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

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 4005?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 4005. This is calculated by dividing 4005's market cap by their current preferred multiple.
What is 4005's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	ر.س2.94b

4005 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	3.2x
Enterprise Value/EBITDA	13.2x
PEG Ratio	4x

Price to Earnings Ratio vs Peers

How does 4005's PE Ratio compare to its peers?

4005 PE Ratio vs Peers

The above table shows the PE ratio for 4005 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	87x
4009 Middle East Healthcare	121.2x	33.3%	ر.س3.1b
2140 Ayyan Investment	143.3x	n/a	ر.س1.5b
4007 Al Hammadi Company For Development and Investment	46.7x	5.0%	ر.س6.7b
4004 Dallah Healthcare	36.8x	14.6%	ر.س10.4b
4005 National Medical Care	20.7x	5.2%	ر.س2.9b

Price-To-Earnings vs Peers: 4005 is good value based on its Price-To-Earnings Ratio (20.7x) compared to the peer average (87x).

Price to Earnings Ratio vs Industry

How does 4005's PE Ratio compare vs other companies in the Asian Healthcare Industry?

Price-To-Earnings vs Industry: 4005 is good value based on its Price-To-Earnings Ratio (20.7x) compared to the SA Healthcare industry average (38.1x)

Price to Earnings Ratio vs Fair Ratio

What is 4005'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.

4005 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	20.7x
Fair PE Ratio	n/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate 4005's Price-To-Earnings Fair Ratio for valuation analysis.

Share Price vs Fair Value

What is the Fair Price of 4005 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 4005 (SAR65.6) is trading below our estimate of fair value (SAR86.13)

Significantly Below Fair Value: 4005 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.

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Future Growth

How is National Medical Care forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

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

5.2%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 4005's forecast earnings growth (5.2% per year) is below the savings rate (8.9%).

Earnings vs Market: 4005's earnings (5.2% per year) are forecast to grow faster than the SA market (-0.5% per year).

High Growth Earnings: 4005's earnings are forecast to grow, but not significantly.

Revenue vs Market: 4005's revenue (5.5% per year) is forecast to grow faster than the SA market (-3.4% per year).

High Growth Revenue: 4005's revenue (5.5% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 4005's Return on Equity is forecast to be low in 3 years time (12.6%).

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Past Performance

How has National Medical Care performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

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

22.8%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 4005 has a high level of non-cash earnings.

Growing Profit Margin: 4005's current net profit margins (16.6%) are higher than last year (12.4%).

Past Earnings Growth Analysis

Earnings Trend: 4005 has become profitable over the past 5 years, growing earnings by 22.8% per year.

Accelerating Growth: 4005's earnings growth over the past year (35.4%) exceeds its 5-year average (22.8% per year).

Earnings vs Industry: 4005 earnings growth over the past year (35.4%) exceeded the Healthcare industry 0.6%.

Return on Equity

High ROE: 4005's Return on Equity (12.3%) is considered low.

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Financial Health

How is National Medical Care'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: 4005's short term assets (SAR922.7M) exceed its short term liabilities (SAR252.6M).

Long Term Liabilities: 4005's short term assets (SAR922.7M) exceed its long term liabilities (SAR182.3M).

Debt to Equity History and Analysis

Debt Level: 4005 is debt free.

Reducing Debt: 4005 has no debt compared to 5 years ago when its debt to equity ratio was 25.5%.

Debt Coverage: 4005 has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: 4005 has no debt, therefore coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is National Medical Care current dividend yield, its reliability and sustainability?

Dividend Score

1/6

Dividend Score 1/6

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

1.52%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: 4005's dividend (1.52%) isn’t notable compared to the bottom 25% of dividend payers in the SA market (1.86%).

High Dividend: 4005's dividend (1.52%) is low compared to the top 25% of dividend payers in the SA market (4.28%).

Stability and Growth of Payments

Stable Dividend: 4005 has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: 4005 has only been paying a dividend for 9 years, and since then payments have fallen.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (31.6%), 4005's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: 4005 is paying a dividend but the company has no free cash flows.

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Management

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

2.7yrs

Average board tenure

CEO

Abdulaziz Alobaid

3.58yrs

Tenure

Dr. Abdulaziz Saleh Alobaid is the Chief Executive Officer at National Medical Care Company since January 1, 2019. He was the Chief Medical Officer at National Medical Care Company. He has the Canadian and...

Board Members

Experienced Board: 4005's board of directors are not considered experienced ( 2.7 years average tenure), which suggests a new board.

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	2022/08/16 00:00
End of Day Share Price	2022/08/16 00:00
Earnings	2022/06/30
Annual Earnings	2021/12/31