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4210

Governance: D

SRMG

Saudi Research and Media Group

78.20 SAR / Share

As of: May 28, 2026

— P/E Ratio Trailing 12 Months

2.2x P/B Ratio Price to Book Value

— Dividend Yield Annual Dividend / Share

6.26B SAR Market Cap Total Valuation

0.89 Beta Systematic Risk Index

-20.7% Net Margin Net Profit / Revenue

The Story

SRMG is navigating a structural pivot from traditional print to high-value digital and visual content, currently reflected in significant operational losses and heavy capital commitments.

Source: Annual 2025 (2026-04-09)

Value Creation +2.1% 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

-2.9%

Payout Ratio Percent of net profits distributed as dividends

—

Net Margin Net profit margin generated from total operational revenue

-20.7%

ROIC Return on Invested Capital

10.9%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

—

P/B Ratio Market capitalization compared to corporate book value

2.2x

EV / EBITDA Operating multiple reflecting core operational leverage

—

EV / SALES Asset pricing multiple relative to total topline revenue

2.6x

Growth Story

A Digital Migration metaphor best describes SRMG's current trajectory. Revenue has contracted from SAR 3.75 billion in FY 2023 to SAR 2.67 billion TTM, reflecting structural challenges in the traditional printing and packaging segments. However, the group is aggressively pursuing a multi-platform strategy, evidenced by the SAR 2.32 billion exclusive broadcasting rights for the Saudi Professional League and strategic partnerships with Bloomberg and Discovery. The 5-year average reinvestment rate of -26.7% and a negative sustainable growth rate of -2.9% highlight a period of intense restructuring where capital is being reallocated from legacy industrial assets toward digital expansion and reach.

Profitability Dynamics

The Cost of Evolution metaphor captures the current financial strain of SRMG's transition. While the group maintains a historical 5-year average ROIC of 10.9%, which exceeds its WACC of 9.16%, current TTM performance shows a sharp decline with an operating margin of -16.5% and a net loss of SAR 553 million. This downturn is driven by substantial impairment charges totaling SAR 121.5 million in FY 2025, primarily within the printing and packaging segment. Profitability is currently weighed down by the high costs of content acquisition and the operational challenges of industrial subsidiaries, resulting in a negative NOPAT of SAR -494.2 million.

Risk & Capital Structure

Beta Systematic market risk indicator relative to the TASI index

0.89

Cost of Equity Minimum required rate of return demanded by shareholders

8.2%

WACC Weighted average cost of total debt and equity funding

8.9%

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

15.9%

Risk Factors

The Tightrope of Transformation metaphor illustrates the group's heightened risk profile. Leverage has increased significantly, with the debt-to-capital ratio rising from 0.50 to 1.37 in FY 2025. A major subsidiary, SPPC, has breached specific financial covenants, leading to the classification of certain interest-bearing loans as short-term. Furthermore, the group faces substantial liquidity pressure from SAR 2.39 billion in trade payables, largely related to long-term content licensing agreements. Business-specific risks are further compounded by the permanent cessation of City Pack Co. operations and the ongoing need to manage geopolitical tensions in the region.

Governance Disclosures

Rating: D

We track 10 key governance and oversight matters for this company in our database.

Significance: 4/10 Info Asymmetry

Joint Venture with Qvest Group

SRMG established a joint venture, Qvest Arabia Company LLC, with a 33% ownership stake. During 2025, the Group transacted SAR 59.9 million with this JV for broadcasting and other services, while the JV reported a net income of SAR 6.2 million for its first year of operations.

Mitigating Factors: The investment is accounted for using the equity method, providing transparency into the JV's financial position and the Group's share of results.

Significance: 5/10 Tunneling

Transactions with Management-Linked Entity

The Group disclosed an outstanding balance of SAR 21.1 million (down from SAR 33.5 million in 2024) paid for media services to an entity owned by the General Manager of one of its subsidiaries. This balance is currently held within prepayments and other current assets.

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In-Depth Analysis