Astra Industrial’s Diverse Empire Boosts Saudi Vision 2030

Astra Industrial 1212

 BUY   Astra Industrial (TADAWUL: 1212)

TADAWUL: 1212 - Astra Industrial - STOCK RECOMMENDATION

Idea BUY
Buy Range 160 – 170
Target 235 – 250
Duration 14-18 Trading Months
Potential Returns 40% – 45%
Idea Buy Range Target Duration Potential Returns
BUY 160 – 170 235 – 250 14-18 Trading Months 40% – 45%

* Once the first target hit, reset the StopLoss at your buying price.

Our recommendations are authentic and transparent. Find this recommendation posted in Tradingview. Be assured such records are permanent and irreversible.

TADAWUL: 1212 - Astra Industrial - STOCK OVERVIEW

Astra Industrial Group is based in Riyadh, Saudi Arabia, where it specializes in the production, marketing, and distribution of a wide range of products. These include pharmaceuticals, polymer compounds, plastic additives, color concentrates, and various plastic items, as well as pre-engineered steel buildings and structures, both domestically and internationally. The company also has a strong focus on the energy sector, particularly in power generation, distribution, substations, and power rental services.

Astra Farms is dedicated to cultivating a variety of products, including fruits, vegetables, flowers, quails, poultry, dairy, and processed foods.

Astra Grains, primarily situated in Jeddah, is involved in the general trading of food commodities, offering items such as nuts, pulses, spices, edible oils, coffee, rice, and more.

Astra Commercial operates in the northwestern region of Saudi Arabia, focusing on the retail and wholesale of grocery products, bakery items, and gas stations. Additionally, Astra Industries is active in sectors such as mining, financial services, investment, education and healthcare, real estate, hospitality, media, and telecommunications.

The subsidiaries of the group operate both within and outside the Kingdom of Saudi Arabia.

Market Capitalization – โ€ช14.10โ€ฏBโ€ฌ SAR

TADAWUL: 1212 - Astra Industrial - RELATIVE STRENGTH

TADAWUL 1212-ASTRA INDUSTRIAL-RELATIVE STRENGTH

Relative Performance - Last 1 Year

AIG —     TASI —

  • The chart clearly illustrates that AIG has outperformed the Tadawul all-share index by a remarkable margin, achieving an outstanding annual return of 89%.

TADAWUL: 1212 - Astra Industrial - TECHNICAL ANALYSIS

TADAWUL 1212-ASTRA INDUSTRIAL-TECHNICAL ANALYSIS
Tadawul: 1212 - Astra Industrial - Technical Analysis

Monthly Chart

  • The historical chart indicates that the stock encountered significant resistance at the 60 level in March 2014, resulting in a decline.
  • It later found support around the 12 level and consolidated for an extended period before initiating an upward trend.
  • After a sustained rally, the price broke through its previous resistance.
  • This breakout propelled the price to an all-time high close to 194.
  • Afterward, a short pullback took place due to rejection from the peak.
  • At present, the price is rising once more, and this upward momentum is expected to persist.

Daily Chart

  • A distinct Symmetrical Triangle pattern is emerging on the daily chart.
  • It is expected that the price will soon break out of this pattern, setting the stage for an upward movement.

TADAWUL: 1212 - Astra Industrial - Revenue & Profit Analysis

Year-on-year

PnL YoY
Tadawul: 1212 - Astra Industrial - Revenue & Profit Analysis (YoY)
  • In FY23, the company achieved a commendable revenue growth of 10%, totaling 2,858 million SAR, a notable rise from 2,594 million SAR in FY22.
  • The EBITDA increased significantly, climbing to 615 million SAR from 502 million SAR during the same period.
  • Moreover, the company has successfully enhanced its EBITDA margin to 21.5%, up from 19.35%, reflecting a positive trend that has been evident over the past several fiscal years.

Quarter-on-quarter

PnL QoQ
Tadawul: 1212 - Astra Industrial - Revenue & Profit Analysis (QoQ)
  • In the most recent June quarter, the company reported revenue of 819 million SAR, a slight dip from the March quarter’s 833 million SAR. However, when compared year-on-year, this figure marks a remarkable increase of 24% from 660 million SAR.
  • The EBITDA for this latest quarter also saw a decrease, falling to 182 million SAR from 188 million SAR in the March quarter.
  • The basic EPS (LTM) remained stable at 6.26 SAR for the June quarter, unchanged from the March quarter. Nevertheless, this figure represents a significant improvement from 5.02 SAR in the same quarter last year.

TADAWUL: 1212 - Astra Industrial - VALUATION

P/E Ratio

Tadawul: 1212 - Astra Industrial - PE vs Peers Average PE
  • This stock presents a compelling valuation, boasting a Price-To-Earnings Ratio of 27.3x, which is significantly lower than the peers average of 48.9x.

P/B Ratio

PB Ratio
Tadawul: 1212 - Astra Industrial - PB vs Peers Average PB
  • With a P/B ratio of 6.1x, this stock appears to be reasonably valued when compared to the peer average of 7.1x.

PEG Ratio

  • The PEG ratio of 0.67 indicates that the stock is undervalued in relation to its anticipated earnings growth.

TADAWUL: 1212 - Astra Industrial - Cash Flow Analysis

  • In the fiscal year 2023, cash flow from operations saw an impressive surge of 90%, rising to 681 million SAR compared to 357 million SAR in FY22. This remarkable growth underscores the strength and efficiency of companyโ€™s operational strategies.

TADAWUL: 1212 - Astra Industrial - DEBT Analysis

Tadawul: 1212 - Astra Industrial - Debt Analysis
  • As of June 2024, AIGโ€™s total debt stands at 1,055 million SAR, leading to a debt-to-equity ratio of 0.46.
  • With an interest coverage ratio of 20, itโ€™s evident that the company is well-equipped to manage its loan interest payments regularly.

TADAWUL: 1212 - Astra Industrial - Top Shareholders

1. Mohammad Al Otaibi (Board Member, Astra Industrial Group)

Shares Held – 3.25%

2. The Vanguard Group

Shares Held – 1.66%

3. Sabih Taher Al-Masri (Chairman, Astra Industrial Group)

Shares Held – 1.02%

4. Khaled Sabih Al-Masri (Board Member, Astra Industrial Group)

Shares Held – 1.02%

5. Blackrock Inc.

Shares Held – 0.85%

TADAWUL: 1212 - Astra Industrial - CONCLUSION

Astra Industrial Group (AIG) is poised for significant growth in the context of Saudi Arabia’s expanding economy, driven primarily by its pharmaceutical and diversified industrial sectors.

Pharmaceutical Growth

Market Leadership: AIG’s subsidiary, Tabuk Pharmaceuticals, is a major player in the Saudi pharmaceutical market, expected to benefit from government initiatives aimed at boosting local production. The pharmaceutical segment is projected to grow at a 10.3% CAGR from 2022 to 2027, with high margins providing stability against lower-margin segments.

Recent Performance: The company reported a remarkable 25% increase in earnings per share (EPS) over the past year, reflecting strong operational efficiency.

Diversification and Industrial Segments

Specialty Chemicals and Mining: AIG’s subsidiaries in specialty chemicals and mining are also set for growth. The specialty chemicals segment has shown a 10.9% CAGR from 2018 to 2022, while Astra Mining is expanding its production capacity significantly, which could enhance revenue contributions over time.

Steel Sector Growth: The steel segment has shown promising growth, particularly linked to the construction boom in Saudi Arabia, with expectations of continued strong performance in the coming years.

Economic Context

Alignment with Vision 2030: AIG’s strategic focus aligns well with Saudi Arabia’s Vision 2030 initiative, which emphasizes economic diversification away from oil dependency. This alignment positions AIG favourably within the growing industrial landscape of the Kingdom.

In summary, Astra Industrial Group’s robust performance in pharmaceuticals, coupled with strategic diversification into chemicals and mining, positions it well to leverage opportunities within Saudi Arabiaโ€™s dynamic economic environment.

TADAWUL: 1212 - Astra Industrial - TRADINGVIEW POSITION UPDATE

MONEY MANAGEMENT AND TRADING RULES

1)ย  Itโ€™s advisable to enter/exit in the recommended range.
2)ย  Strictly follow the StopLoss as mentioned. Honour it.
3) ย Use trailing StopLoss to retain profits.
4)ย  Diversify trading capital into our other trading recommendations.
5)ย  Risk only the money what you can afford to lose. Hedge accordingly.

Advisor / ANALYST SUMMARY

The stock trading advice is prepared by the Naranj Capital team under the guidance ofย Arijit Banerjee, CMT, CFTe. Arijit is a veteran trader and an active investor having in-depth knowledge of financial market research, advanced technical analysis, market cycle, algorithmic trading, and portfolio management. He is a Chartered Market Technician (CMT) accredited by CMT Association USA, the global authority of Technical Analysis and also has been honored as aย Certified Financial Technician (CFTe)ย by the International Federation of Technical Analysts, USA.

Disclosure

The views expressed herein are based solely on information available publicly/internal data/other sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to accuracy. The recommendations provided herein is solely for informational purposes and are not intended to be and must not be taken alone as the basis for an investment/trading decision. Trading and investing are subject to market risk and the securities discussed and opinions expressed herein may not be suitable for all investors. To read the full disclosure, please click here.

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