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1323

Governance: A

UCIC

United Carton Industries Co.

24.58 SAR / Share

As of: Mar 26, 2026

12.4x P/E Ratio Trailing 12 Months

1.7x P/B Ratio Price to Book Value

4.1% Dividend Yield Annual Dividend / Share

983.20M SAR Market Cap Total Valuation

1.22 Beta Systematic Risk Index

5.6% Net Margin Net Profit / Revenue

The Story

A leading regional packaging manufacturer transitioning from a private entity to a public player, balancing steady revenue growth with a historical focus on capital returns.

Source: Annual 2025 (2026-03-11)

Value Creation +3.6% Excess Return on Capital (Spread between ROIC/ROE and Cost of Capital)

Cash Flow Payback — Estimated years of operating cash flows required to cover Enterprise Value

Performance & Distributions

Dividend Yield Trailing annual dividends paid relative to share price

4.1%

Sustainable Growth Rate Rate at which company can grow internally using reinvested profits

-4.2%

Payout Ratio Percent of net profits distributed as dividends

50.6%

Net Margin Net profit margin generated from total operational revenue

5.6%

ROIC Return on Invested Capital

12.0%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

12.4x

P/B Ratio Market capitalization compared to corporate book value

1.7x

EV / EBITDA Operating multiple reflecting core operational leverage

7.6x

EV / SALES Asset pricing multiple relative to total topline revenue

0.8x

Growth Story

Revenue reached 1.41 billion SAR in the twelve months ended December 31, 2025, representing a steady expansion from 1.34 billion SAR in fiscal 2024. This growth was supported by a 4% increase in core goods sales and a 20.5% rise in rendering services. However, the company's sustainable growth rate is currently calculated at -4.23%, a reflection of a historical five-year average reinvestment rate of -35.25%. This negative reinvestment indicates that UCIC has historically prioritized distributing cash to shareholders over internal compounding. Looking forward, the company is shifting toward capacity expansion, evidenced by 72.8 million SAR in property and equipment additions during 2025 and a newly approved 75.9 million SAR expansion project for its RAK subsidiary scheduled for 2026.

Profitability Dynamics

UCIC demonstrates consistent value creation with a five-year average ROIC of 12.01%, maintaining a positive 3.62% gap over its WACC of 8.39%. Despite this long-term efficiency, the TTM period saw profitability compression, with net income falling to 79.1 million SAR from 124.7 million SAR in fiscal 2024. This was largely driven by a rise in material costs, which climbed to 850.7 million SAR, weighing on the operating margin which stood at 6.16% TTM. While margins have tightened, the business remains a reliable cash generator, supporting an interim dividend of 1.00 SAR per share in 2025, though this was moderated from the 1.625 SAR distributed in the previous year.

Risk & Capital Structure

Beta Systematic market risk indicator relative to the TASI index

1.22

Cost of Equity Minimum required rate of return demanded by shareholders

9.6%

WACC Weighted average cost of total debt and equity funding

8.4%

Debt-to-Equity Ratio Proportion of corporate funding financed by debt creditors

20.7%

Risk Factors

The company's risk profile is anchored by a conservative gearing ratio of 0.44%, with total debt of 203.5 million SAR primarily utilized for short-term working capital needs. Operational risks are highlighted by a significant fire incident at the IPIC subsidiary in 2024, which resulted in 25.1 million SAR in insurance claims to recover damaged assets. Furthermore, UCIC faces high sensitivity to raw material prices, which constitute over 70% of its cost of revenue. The company's beta of 1.21 indicates a higher sensitivity to market volatility, reflecting the cyclical nature of the industrial packaging sector and its dependence on broader economic activity in the GCC region.

Governance Disclosures

Rating: A

We track 4 key governance and oversight matters for this company in our database.

Significance: 2/10 Propping

Indemnification for Prior Zakat Liabilities

The Company disclosed that any Zakat liabilities arising for its subsidiary, IPIC, for periods prior to the transfer of control will be borne by the previous shareholders.

Mitigating Factors: The arrangement is governed by the terms agreed upon during the acquisition/control transfer of the subsidiary.

Significance: 3/10 Tunneling

Receivables from Key Management Personnel

As of December 31, 2025, the Group reported an outstanding balance due from key management personnel amounting to SAR 1.56 million, slightly decreased from SAR 1.59 million in 2024.

Mitigating Factors: The outstanding balances are explicitly secured by the employees' end-of-service benefits.

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In-Depth Analysis