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4040

Governance: A

SAPTCO

Saudi Public Transport Co.

11.07 SAR / Share

As of: May 28, 2026

9.3x P/E Ratio Trailing 12 Months

1.4x P/B Ratio Price to Book Value

— Dividend Yield Annual Dividend / Share

1.38B SAR Market Cap Total Valuation

1.58 Beta Systematic Risk Index

7.9% Net Margin Net Profit / Revenue

The Story

SAPTCO is undergoing a structural turnaround driven by massive public transit concessions, but it continues to grapple with historical capital inefficiency and high leverage.

Source: Q1 2026 (2026-05-12)

Value Creation -9.4% 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

—

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

-2.5%

Payout Ratio Percent of net profits distributed as dividends

—

Net Margin Net profit margin generated from total operational revenue

7.9%

ROIC Return on Invested Capital

-0.5%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

9.3x

P/B Ratio Market capitalization compared to corporate book value

1.4x

EV / EBITDA Operating multiple reflecting core operational leverage

6.3x

EV / SALES Asset pricing multiple relative to total topline revenue

1.3x

Growth Story

SAPTCO's revenue has shown a strong upward trajectory, rising from 1.57 billion SAR in fiscal 2023 to 1.46 billion SAR in fiscal 2024, and surging to 1.83 billion SAR in fiscal 2025, reaching a TTM high of 1.88 billion SAR. This growth is primarily fueled by the execution of the King Abdulaziz Project for Public Transport in Riyadh. However, the company's long-term growth capacity is constrained by its historical capital allocation. The five-year average ROIC stands at a negative 0.53%, which, when combined with a massive five-year average reinvestment rate of 471.72% driven by heavy capital expenditures like the TTM Capex of 251.18 million SAR to procure buses, yields a negative Sustainable Growth Rate of -2.50%. This indicates that while top-line expansion is robust due to new contract rollouts, the business cannot organically sustain this growth without external financing.

Profitability Dynamics

SAPTCO has successfully turned around its operating profitability, with EBIT rising from 28.99 million SAR in fiscal 2024 to 145.96 million SAR in fiscal 2025, and reaching 184.22 million SAR in the TTM period. This has expanded TTM operating margins to 9.79% and net profit margins to 7.89%, yielding a TTM Net Income of 148.47 million SAR compared to a net loss of 24.18 million SAR in fiscal 2023. Despite this operational recovery, the company's historical returns remain weak. The five-year average ROIC of -0.53% fails to cover its WACC of 8.91%, resulting in a negative value creation gap of -9.44%. This value destruction is exacerbated by a massive working capital requirement of 1.57 billion SAR, largely tied up in trade and unbilled receivables of 1.36 billion SAR, which severely restricts free cash flow generation.

Risk & Capital Structure

Beta Systematic market risk indicator relative to the TASI index

1.58

Cost of Equity Minimum required rate of return demanded by shareholders

11.3%

WACC Weighted average cost of total debt and equity funding

8.9%

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

92.4%

Risk Factors

SAPTCO's risk profile is characterized by high financial leverage and heavy reliance on public sector payments. The company carries 1.28 billion SAR in total debt, primarily Murabaha financing used to fund bus procurements, which is substantial relative to its market capitalization of 1.38 billion SAR. This high debt load is reflected in a high relevered beta of 1.58, indicating significant systematic risk and a high Cost of Equity of 11.29%. Operational risks are concentrated in its receivables; out of 1.42 billion SAR in total trade and unbilled receivables, 1.31 billion SAR is due from government and semi-government institutions, with 810.43 million SAR remaining unbilled. Any delays in billing schedules or government collections pose a material liquidity risk, forcing the company to rely on short-term Murabaha facilities, such as the 600 million SAR facility obtained for operating activities, to manage working capital.

Governance Disclosures

Rating: A

We track 12 key governance and oversight matters for this company in our database.

Significance: 4/10 Info Asymmetry

Transactions with Minority Shareholders of Subsidiaries

The Group conducts business with RATP Development and NEX Continental Holdings, which hold 20% and 15% stakes respectively in SAPTCO's subsidiaries (PTC and SAT). Transactions include services rendered and dividend payments.

Mitigating Factors: Transactions are approved by the Board of Directors and conducted in the normal course of business.

Significance: 5/10 Propping

Capital Contribution via Loan Rescheduling to Joint Venture

The Group rescheduled a non-interest-bearing loan to its joint venture, SEITCO. The modification of terms resulted in a significant change in estimated cash flows, which was accounting-wise treated as a capital contribution to the joint venture.

Mitigating Factors: The transaction is disclosed as a substantial modification under IFRS 9 and recognized at fair value.

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In-Depth Analysis