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4012

Governance: A

ALASEEL

Thob Al Aseel Co.

3.69 SAR / Share

As of: May 28, 2026

14.3x P/E Ratio Trailing 12 Months

2.3x P/B Ratio Price to Book Value

5.4% Dividend Yield Annual Dividend / Share

1.48B SAR Market Cap Total Valuation

0.63 Beta Systematic Risk Index

18.6% Net Margin Net Profit / Revenue

The Story

Thob Al Aseel is a highly profitable, net-cash-positive traditional apparel leader in Saudi Arabia that prioritizes steady shareholder distributions over aggressive capital reinvestment.

Source: Q1 2026 (2026-05-03)

Value Creation +5.4% 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

5.4%

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

-3.7%

Payout Ratio Percent of net profits distributed as dividends

77.3%

Net Margin Net profit margin generated from total operational revenue

18.6%

ROIC Return on Invested Capital

12.4%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

14.3x

P/B Ratio Market capitalization compared to corporate book value

2.3x

EV / EBITDA Operating multiple reflecting core operational leverage

10.1x

EV / SALES Asset pricing multiple relative to total topline revenue

2.2x

Growth Story

Thob Al Aseel's revenue trends reflect a mature and stable business model, with revenues moving from 532.2 million SAR in FY 2023 to 522.5 million SAR in FY 2024, recovering to 528.2 million SAR in FY 2025, and reaching 555.5 million SAR on a TTM basis. While the top-line shows steady incremental demand, the company's long-term growth capacity is structurally limited by its capital allocation strategy. With a five-year average reinvestment rate of -29.80%, the company distributes more than its earnings rather than retaining them for expansion, resulting in a sustainable growth rate of -3.69%. Future expansion will rely on incremental retail optimization, such as managing its 27 core branches and expanding specialized subsidiaries like Aseela Trade, rather than capital-intensive infrastructure rollouts.

Profitability Dynamics

Despite its low-growth profile, Thob Al Aseel is an exceptional value creator, boasting a five-year average ROIC of 12.39% that comfortably exceeds its WACC of 7.02%, leaving a positive value-creation gap of 5.36%. This profitability is supported by strong pricing power and operational efficiency, as evidenced by a TTM operating margin of 20.70% and a profit margin of 18.63%, yielding a TTM net income of 103.5 million SAR. Because the business requires minimal capital expenditure, with TTM capex at a modest 8.2 million SAR, it generates robust free cash flows. This allows the company to maintain a substantial cash buffer of 323.9 million SAR and consistently reward shareholders, as demonstrated by the 40 million SAR dividend declared for the second half of fiscal 2025.

Risk & Capital Structure

Beta Systematic market risk indicator relative to the TASI index

0.63

Cost of Equity Minimum required rate of return demanded by shareholders

7.0%

WACC Weighted average cost of total debt and equity funding

7.0%

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

4.4%

Risk Factors

From a risk perspective, Thob Al Aseel operates with an exceptionally secure balance sheet, carrying 323.9 million SAR in cash against a total debt of just 64.9 million SAR, representing a highly liquid net cash position. Its low relevered beta of 0.634 reflects the defensive, non-cyclical nature of the traditional Saudi apparel market. However, operational risks are primarily concentrated in working capital management, as trade receivables surged to 238.0 million SAR as of March 31, 2026, compared to 108.7 million SAR at the end of fiscal 2025. This rapid expansion in receivables requires diligent credit risk monitoring and expected credit loss provisioning. Additionally, while regional geopolitical tensions present macro uncertainty, management has reported no material impact on its supply chains or retail operations.

Governance Disclosures

Rating: A

We track 11 key governance and oversight matters for this company in our database.

Significance: 3/10 Tunneling

Key Management Personnel and Board Remuneration

During the three-month period ended 31 March 2026, the Group paid compensation to key management personnel and the Board of Directors totaling SR 2,844,367, which includes short-term benefits of SR 624,367, end of service benefits of SR 50,000, and Board of Directors and related committees' remunerations of SR 2,170,000.

Significance: 4/10 Tunneling

Payments on Behalf of Associate Company

The Group made payments on behalf of its associate, Jada Al-Harir Company, totaling SR 2,803,003 during the three-month period ended 31 March 2026, compared to SR 4,648,504 in the same period of 2025. The outstanding balance due from Jada Al-Harir Company was SR 362,555 as of 31 March 2026, down from SR 3,165,558 as of 31 December 2025.

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In-Depth Analysis