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2300

Governance: A

SPM

Saudi Paper Manufacturing Co.

53.50 SAR / Share

As of: Mar 26, 2026

39.5x P/E Ratio Trailing 12 Months

3.5x P/B Ratio Price to Book Value

— Dividend Yield Annual Dividend / Share

1.98B SAR Market Cap Total Valuation

1.31 Beta Systematic Risk Index

6.1% Net Margin Net Profit / Revenue

The Story

A vertically integrated tissue manufacturer balancing a high-reinvestment strategy with a focused regional consolidation.

Source: Q3 2025 (2025-11-17)

Value Creation -1.1% 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

—

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

+4.2%

Payout Ratio Percent of net profits distributed as dividends

—

Net Margin Net profit margin generated from total operational revenue

6.1%

ROIC Return on Invested Capital

8.1%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

39.5x

P/B Ratio Market capitalization compared to corporate book value

3.5x

EV / EBITDA Operating multiple reflecting core operational leverage

17.5x

EV / SALES Asset pricing multiple relative to total topline revenue

3.0x

Growth Story

SPM is currently navigating a phase of strategic refinement, evidenced by its TTM revenue of 816.5 million SAR. While revenue has stabilized following a peak of 837.2 million SAR in fiscal 2024, the company is aggressively positioning for the future with a 5-year average reinvestment rate of 51.99%. This commitment to capital allocation supports a sustainable growth rate of 4.23%. Growth is being driven by a 'quality over quantity' approach, as seen in the divestment of non-operating subsidiaries in Morocco and Jordan to concentrate resources on the high-performing Saudi manufacturing core, which contributed 702.1 million SAR in segment revenue during the first nine months of 2025.

Profitability Dynamics

The company maintains a steady operational profile with a TTM operating margin of 9.74% and a net profit margin of 6.14%. Value creation remains a delicate balance; the 5-year average ROIC of 8.14% currently trails the WACC of 8.73%, resulting in a narrow negative gap of 0.58%. Despite this, the company continues to generate significant NOPAT of 75.4 million SAR. Profitability is heavily influenced by the capital-intensive nature of the business, with TTM Capex reaching 115.3 million SAR as the group upgrades its manufacturing and recycling infrastructure to improve long-term efficiency.

Risk & Capital Structure

Beta Systematic market risk indicator relative to the TASI index

1.31

Cost of Equity Minimum required rate of return demanded by shareholders

10.0%

WACC Weighted average cost of total debt and equity funding

9.2%

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

29.3%

Risk Factors

SPM's risk profile is anchored by its leverage and credit management. The group carries 579.2 million SAR in total debt, including a 150 million SAR SIDF facility that, while favorable in terms of financial charges, requires the mortgage of property and equipment. A notable business-specific risk is the rising allowance for impairment of trade receivables, which increased to 34.9 million SAR by September 2025 from 22.6 million SAR at the end of 2024. Additionally, a beta of 1.17 suggests the company is more sensitive to market volatility than the broader index, while recent losses on the translation of financial liabilities (9.0 million SAR in the first nine months of 2025) highlight exposure to currency fluctuations.

Governance Disclosures

Rating: A

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

Significance: 4/10 Asset Risk

Legal Recovery and Disposal of Morocco Subsidiary

The Group completed the sale of its Morocco subsidiary in 2025 for net proceeds of SR 6.16 million. This follows a history where the subsidiary was sold in 2019 for SR 13.6 million but reacquired in 2021 via court ruling after the Group was unable to collect the consideration from the original buyer.

Mitigating Factors: The Board of Directors recommended legal action to cancel the original sale and recover the asset when the buyer defaulted.

Significance: 4/10 Info Asymmetry

Gas Procurement Transactions with Associate

The Group engaged in significant transactions with its associate, East Gas Limited, for the purchase of gas. During the nine-month period ended September 30, 2025, these purchases totaled SR 7,683,315, with a remaining payable balance of SR 2,794,836 at the end of the period.

Mitigating Factors: Transactions are disclosed as being executed on commercial terms approved by management.

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In-Depth Analysis