Amwal Al Ghad - 2012-09-27 07:52:22
The Saudi telecom sector has strong growth potential with profit growth largely driven by value-added services (namely broadband), costs efficiencies, and international operations for STC, NCB Capital , the GCC's leading wealth manager and the Kingdom's largest asset manager, said in a report Wednesday.
Farouk Miah, Head of Equity Research at NCB Capital , said: "We believe that the corporate segment in general and the ICT segment in particular (e.g. data security, cloud computing) is a source of continued growth for the sector with it a key target for Mobily."
In its new report, NCB Capital remained Overweight on STC, with a PT of SR51.8 (upside of 30 percent), and Mobily with a PT of SR81.9 (upside of 20 percent) and Neutral on Zain KSA, with a PT of SR11.3 (downside of 5 percent). "Focus on the broadband market for all three players remains key, with expansion in network capabilities being sought as a point of differentiation. Valuations remain attractive with the sector trading at 8.0x 2013E P/E," Miah added. "Although the upside on STC is greater, Mobily remains our preferred stock, given its strong fundamentals, excellent execution record and good dividend visibility." More»