Riyadh-Mubasher: Albilad Capital assigned Almarai an ‘Overweight’ rating, lowering the fair value to SAR 77 from SAR 96.
The dairy producer will re-price some products which are not subject to the government pricing to curb the financial impact of lifting the government subsidy, the research firm said.
Nonetheless, profits margins will be squeezed, factoring in staggering expansions as well as fierce competition in some markets.
“Furthermore, we rule out any modification to the government-imposed milk price in the local market in 2016,” Albilad Capital said.
The leading dairy producer posted a 13% rise in Q4-15 net profits to SAR 484 million, from SAR 428 million in the same period last year.
