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2230

Governance: A

CHEMICAL

Saudi Chemical Co.

8.45 SAR / Share

As of: May 28, 2026

24.1x P/E Ratio Trailing 12 Months

3.1x P/B Ratio Price to Book Value

0.6% Dividend Yield Annual Dividend / Share

7.13B SAR Market Cap Total Valuation

0.92 Beta Systematic Risk Index

4.2% Net Margin Net Profit / Revenue

The Story

A diversified industrial powerhouse converting government-linked demand in healthcare and defense into a high-growth, value-creating engine.

Source: Q3 2025 (2025-11-11)

Value Creation +2.2% 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

0.6%

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

+17.0%

Payout Ratio Percent of net profits distributed as dividends

14.3%

Net Margin Net profit margin generated from total operational revenue

4.2%

ROIC Return on Invested Capital

10.5%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

24.1x

P/B Ratio Market capitalization compared to corporate book value

3.1x

EV / EBITDA Operating multiple reflecting core operational leverage

16.6x

EV / SALES Asset pricing multiple relative to total topline revenue

1.2x

Growth Story

The company is currently navigating a high-velocity expansion phase, with revenue climbing from SAR 4.85 billion in fiscal 2023 to a TTM figure of SAR 6.96 billion. This trajectory is underpinned by an aggressive 5-year average reinvestment rate of 162.46%, indicating that the group is deploying capital far beyond its immediate earnings to build future capacity. With a sustainable growth rate of 17.01%, the business demonstrates a strong internal capacity to expand, fueled by strategic projects such as the establishment of a new explosives factory in Riyadh and the continued scaling of its pharmaceutical manufacturing capabilities.

Profitability Dynamics

Value creation is evident as the company maintains a 5-year average ROIC of 10.47%, successfully outperforming its WACC of 8.09%. This positive spread of 2.38% confirms that the group's capital allocations are generating returns above its cost of funding. While TTM operating margins are relatively lean at 6.24%, the sheer scale of the pharmaceutical segment—which generated over SAR 5 billion in revenue for the nine months ended September 30, 2025—provides the necessary volume to sustain a NOPAT of SAR 381 million. The focus remains on converting high-volume distribution into stable cash flows, even as heavy reinvestment limits current free cash flow availability.

Risk & Capital Structure

Beta Systematic market risk indicator relative to the TASI index

0.92

Cost of Equity Minimum required rate of return demanded by shareholders

8.3%

WACC Weighted average cost of total debt and equity funding

8.2%

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

18.8%

Risk Factors

The group's risk profile is defined by its significant debt load of SAR 1.34 billion and a heavy reliance on government-linked receivables. While these receivables are considered high-quality, the concentration represents a systemic dependency. Financial risk is further shaped by the use of specialized SIDF financing and Islamic loans, which require strict adherence to financial covenants. Additionally, the group faces inherent operational risks associated with the handling of explosives and currency volatility through its Egyptian subsidiary, SINCO, which operates in USD amidst a Saudi Riyal reporting environment.

Governance Disclosures

Rating: A

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

Significance: 4/10 Tunneling

Key Executive and Board Remuneration

The Group disclosed total compensation for the Board of Directors and key executives. For the nine-month period, Board remuneration totaled SAR 4.05 million, while short-term benefits for executives reached SAR 15.9 million.

Significance: 3/10 Tunneling

Related Party Transactions with Logistics Joint Venture

The Group conducts business with Care Supply Chain for Logistics Services, a joint venture where it holds a 50% interest. Transactions involve affiliate services, and the Group reported an outstanding balance due to this related party of SAR 4.785 million.

Mitigating Factors: Partners' resolutions for the joint venture are required to be adopted unanimously as per the Articles of Association.

For more, click here to view the full governance profile →

In-Depth Analysis