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4130

Governance: D

SAUDI DARB

Saudi Darb Investment Co.

2.07 SAR / Share

As of: May 28, 2026

66.7x P/E Ratio Trailing 12 Months

2.0x P/B Ratio Price to Book Value

— Dividend Yield Annual Dividend / Share

451.87M SAR Market Cap Total Valuation

0.72 Beta Systematic Risk Index

37.1% Net Margin Net Profit / Revenue

The Story

Saudi Darb is a real estate investment and development firm undergoing a significant structural and financial reorganization to stabilize its asset base and address legacy liabilities.

Source: Annual 2025 (2026-02-19)

Value Creation -5.9% 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

-0.2%

Payout Ratio Percent of net profits distributed as dividends

—

Net Margin Net profit margin generated from total operational revenue

37.1%

ROIC Return on Invested Capital

1.4%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

66.7x

P/B Ratio Market capitalization compared to corporate book value

2.0x

EV / EBITDA Operating multiple reflecting core operational leverage

65.3x

EV / SALES Asset pricing multiple relative to total topline revenue

25.1x

Growth Story

The company has demonstrated a steady upward trend in rental income, with revenue rising from 16.06 million SAR in fiscal 2023 to 18.27 million SAR for the trailing twelve months (TTM). Despite this top-line progress, the long-term growth capacity remains constrained. The five-year average reinvestment rate is negative at -13.75%, contributing to a slightly negative sustainable growth rate of -0.20%. This suggests that while the company is successfully collecting rents, it has historically struggled to retain and reinvest capital into new value-generating projects. Recent strategic moves, such as the acquisition of the remaining 13.04% stake in The Elegant Centers Limited for 19.6 million SAR, indicate a shift toward consolidating ownership to better control future growth levers.

Profitability Dynamics

Saudi Darb maintains a robust operating margin of 37.7% and a profit margin of 37.1% on its TTM revenue, reflecting the high-margin nature of its core rental business. However, the broader value creation story is challenged by a significant gap between returns and costs. The five-year average Return on Invested Capital (ROIC) of 1.44% is substantially lower than its Weighted Average Cost of Capital (WACC) of 8.12%, resulting in a negative value gap of -6.69%. While the company is currently profitable with a net income of 6.78 million SAR, it is not yet generating returns that exceed the opportunity cost of its capital, largely due to the heavy asset base required for its real estate holdings.

Risk & Capital Structure

Beta Systematic market risk indicator relative to the TASI index

0.72

Cost of Equity Minimum required rate of return demanded by shareholders

7.4%

WACC Weighted average cost of total debt and equity funding

7.4%

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

1.9%

Risk Factors

The risk profile is characterized by significant legal and structural hurdles rather than traditional financial leverage. While total debt is relatively low at 8.65 million SAR, the company faces a major legal risk involving an asset exchange dispute with Al-Sata’ah Modern General Contracting Company, leading to a 26.1 million SAR provision for expected losses. Furthermore, the company recently executed a capital reduction to absorb 78.7 million SAR in accumulated losses, signaling a history of financial volatility. With a beta of 0.91, the stock shows moderate sensitivity to market movements, but the primary risks remain idiosyncratic, centered on the resolution of legal claims and the successful execution of its new corporate identity.

Governance Disclosures

Rating: D

We track 8 key governance and oversight matters for this company in our database.

Significance: 8/10 Asset Risk

Provision for Loss on Asset Exchange Contract

The company is legally obligated to execute an asset exchange contract with Al-Sata’ah Modern General Contracting Company following a court judgment. Management has recognized a provision of SAR 26,136,823 for expected losses because the assets to be received in the exchange are considered to have low value and significant impairment due to obsolescence.

Mitigating Factors: The company has proactively recognized the expected loss as a provision to reflect the potential impairment in the financial statements.

Significance: 6/10 Tunneling

Acquisition of Subsidiary Interest from Former Board Member

The company entered into an agreement to purchase a 13.04% stake in its subsidiary, The Elegant Centers Limited, from a former board member for a total consideration of SAR 19,600,000. While the majority of the payment has been settled, the company exercised its contractual right in September 2025 to extend the payment deadline for the remaining SAR 900,000 balance by an additional year.

Mitigating Factors: The transaction terms allowed the company to extend the payment period upon notification to the seller, and the conversion of the subsidiary into a branch followed the acquisition of 100% ownership.

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In-Depth Analysis