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1834

Governance: D

SMASCO

Saudi Manpower Solutions Co.

5.92 SAR / Share

As of: May 28, 2026

15.7x P/E Ratio Trailing 12 Months

3.7x P/B Ratio Price to Book Value

4.2% Dividend Yield Annual Dividend / Share

2.37B SAR Market Cap Total Valuation

0.75 Beta Systematic Risk Index

7.2% Net Margin Net Profit / Revenue

The Story

SMASCO operates as a highly efficient, asset-light manpower solutions provider, delivering robust returns on capital and steady revenue growth while navigating the operational complexities of foreign labor recruitment and credit risk management.

Source: Annual 2025 (2026-05-03)

Value Creation +18.4% 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

4.2%

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

+0.5%

Payout Ratio Percent of net profits distributed as dividends

66.4%

Net Margin Net profit margin generated from total operational revenue

7.2%

ROIC Return on Invested Capital

26.0%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

15.7x

P/B Ratio Market capitalization compared to corporate book value

3.7x

EV / EBITDA Operating multiple reflecting core operational leverage

11.3x

EV / SALES Asset pricing multiple relative to total topline revenue

1.2x

Growth Story

SMASCO's revenue grew to 2,094,593,912 SR in FY 2025, up from 1,892,890,092 SR in FY 2024 and 1,827,191,275 SR in FY 2023. This represents a solid top-line expansion driven primarily by the private corporate sector and individual home labor services. Despite this top-line momentum, the company's long-term growth capacity is structurally constrained by its low historical reinvestment rate, which averaged 1.85% over the past five years. Consequently, the sustainable growth rate stands at a modest 0.48%, indicating that while the company successfully captures market demand, it chooses to distribute the vast majority of its earnings rather than aggressively reinvesting in capital-intensive expansion. This asset-light model relies on visa acquisitions and recruitment pipelines rather than heavy physical infrastructure to sustain its steady growth trajectory.

Profitability Dynamics

SMASCO demonstrates exceptional capital efficiency, boasting a 5-year average Return on Invested Capital (ROIC) of 25.98%. When compared against its Weighted Average Cost of Capital (WACC) of 7.55%, the company generates a substantial value creation gap of 18.43%, highlighting its strong economic moat. In FY 2025, operating income recovered to 174,831,936 SR from 132,428,829 SR in FY 2024, yielding an operating margin of 8.35% and a net profit margin of 7.19%. Profitability was slightly tempered by a 14,857,739 SR share of loss from its joint venture, Waed Khadmat Al Munzal For Marketing. Nonetheless, the core business remains highly cash-generative, supported by unearned revenues of 44,983,454 SR representing advance collections from customers, which ensures a steady upfront cash flow cycle to fund ongoing recruitment and visa costs.

Risk & Capital Structure

Beta Systematic market risk indicator relative to the TASI index

0.75

Cost of Equity Minimum required rate of return demanded by shareholders

7.6%

WACC Weighted average cost of total debt and equity funding

7.5%

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

4.3%

Risk Factors

While SMASCO maintains a low-debt balance sheet with total debt of 101,264,006 SR and cash of 59,985,767 SR, its capital structure is characterized by an adjusted net debt-to-equity ratio of 0.82 in FY 2025, up from 0.76 in FY 2024. The company's primary risks are operational and credit-related rather than financial leverage. Gross trade receivables rose to 407,719,973 SR in FY 2025, accompanied by a sharp increase in the allowance for impairment to 63,711,626 SR, reflecting rising credit risk as overdue receivables beyond 360 days climbed to 91,080,248 SR. Additionally, the company faces regulatory and operational risks associated with visa amortization and recruitment fees, alongside a 5.91 million SR provision for doubtful advances to suppliers identified in FY 2025. A relevered beta of 0.75 indicates moderate market sensitivity, aligning with its defensive, service-oriented business profile.

Governance Disclosures

Rating: D

We track 6 key governance and oversight matters for this company in our database.

Significance: 4/10 Tunneling

Executive and Board Remuneration

In 2025, the Group paid salaries and remunerations to senior management of SR 10,071,580 and Board of Directors' and committees' remuneration of SR 2,986,685. At year-end, a balance of SR 11.41 million was payable to key management personnel.

Mitigating Factors: Remuneration is subject to board and committee oversight and is presented within accrued expenses and other liabilities.

Significance: 6/10 Info Asymmetry

Joint Venture Losses and Commercial Transactions with Waed Khadmat Al Munzal For Marketing

The Group's wholly-owned subsidiary, Saneem for Investment Company, holds a 50% interest in Waed Khadmat Al Munzal For Marketing. For 2025, the Group recorded a share of loss of SR 14,857,739 from this joint venture. Concurrently, the Group conducted manpower services transactions with this entity totaling SR 53,594,918 and payments on behalf of SR 1,592,266, with an outstanding due from balance of SR 18,366,959 at year-end.

Mitigating Factors: The joint venture is accounted for using the equity method, and outstanding balances are unsecured and expected to be settled in cash.

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In-Depth Analysis