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4262

Governance: A

LUMI

Lumi Rental Co.

34.10 SAR / Share

As of: May 28, 2026

10.1x P/E Ratio Trailing 12 Months

1.3x P/B Ratio Price to Book Value

— Dividend Yield Annual Dividend / Share

1.88B SAR Market Cap Total Valuation

1.67 Beta Systematic Risk Index

11.4% Net Margin Net Profit / Revenue

The Story

Lumi Rental Company operates a highly capital-intensive vehicle leasing and rental business in Saudi Arabia, driving growth through massive fleet reinvestment while maintaining a narrow but positive spread over its cost of capital.

Source: Q1 2026 (2026-05-13)

Value Creation +1.6% 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

+37.4%

Payout Ratio Percent of net profits distributed as dividends

—

Net Margin Net profit margin generated from total operational revenue

11.4%

ROIC Return on Invested Capital

11.0%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

10.1x

P/B Ratio Market capitalization compared to corporate book value

1.3x

EV / EBITDA Operating multiple reflecting core operational leverage

4.6x

EV / SALES Asset pricing multiple relative to total topline revenue

2.1x

Growth Story

Lumi's growth story is characterized by a massive, continuous cycle of capital deployment, resembling a high-speed treadmill. Revenue grew significantly from 1,105.58 million SAR in FY 2023 to 1,549.77 million SAR in FY 2024, and reached 1,668.76 million SAR in FY 2025, though TTM revenue shows a slight moderation to 1,623.29 million SAR. This expansion is fueled by an extraordinary five-year average reinvestment rate of 340.83%, reflecting the heavy capital expenditures required to constantly refresh and expand its vehicle fleet, with TTM Capex at 849.09 million SAR. With a five-year average ROIC of 10.97%, this aggressive reinvestment yields a high sustainable growth rate of 37.40%. However, recent interim data for the three months ended March 31, 2026, indicates a temporary slowdown, with total revenue declining to 366.06 million SAR from 411.53 million SAR in the prior-year period, primarily driven by lower used vehicle sales and a slight dip in lease and rental agreements.

Profitability Dynamics

Lumi creates positive economic value but operates like a finely tuned engine running on tight tolerances. The company's five-year average ROIC of 10.97% exceeds its WACC of 9.41%, generating a positive value creation gap of 1.56%. Profitability is supported by a solid TTM operating margin of 18.64% and a net profit margin of 11.40%, translating to a NOPAT of 294.56 million SAR. However, the asset-heavy nature of the business means that cash flow generation is heavily consumed by fleet additions. Segment analysis reveals that while long-term leasing and short-term rentals provide stable, recurring revenue streams, the used car sales segment is highly cyclical and volatile, as seen in the first quarter of 2026 where used car sales revenue dropped to 71.32 million SAR from 111.23 million SAR in Q1 2025, directly impacting overall profitability.

Risk & Capital Structure

Beta Systematic market risk indicator relative to the TASI index

1.67

Cost of Equity Minimum required rate of return demanded by shareholders

11.7%

WACC Weighted average cost of total debt and equity funding

9.4%

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

87.5%

Risk Factors

The primary risk for Lumi lies in its substantial leverage and sensitivity to interest rate fluctuations, much like a heavily loaded trailer navigating a steep incline. The company carries a massive debt load, with latest total debt standing at 1.64 billion SAR, primarily composed of floating-rate Islamic Murabaha and Tawaruq facilities. This high debt load is reflected in a relevered beta of 1.67, indicating high systemic risk and sensitivity to market movements. Interest rate risk is a critical concern; a 100 basis point increase in interest rates would reduce profit by approximately 15.79 million SAR based on March 31, 2026 figures. Additionally, Lumi faces credit risk from its trade receivables, which stood at 497.78 million SAR gross with an accumulated impairment loss of 72.82 million SAR as of Q1 2026, highlighting the challenges of managing collections from corporate and government clients.

Governance Disclosures

Rating: A

We track 9 key governance and oversight matters for this company in our database.

Significance: 4/10 Propping

Share-Based Payment Incentive Funded by Parent Company

The parent company, Seera Holding Group, granted funds to pay an incentive to the company's employees upon the successful completion of listing 30% of the company's share capital on Tadawul. This incentive was classified under IFRS-2 Share-based Payment and recorded as an expense in the statement of profit or loss against an equity contribution from the parent company under other reserve.

Mitigating Factors: The incentive amount was recorded as an expense against an equity contribution from the parent company.

Significance: 5/10 Info Asymmetry

Related-Party Transactions and Balances with Parent and Fellow Subsidiary

Lumi Rental Company enters into sales, purchases, and settlement transactions with its parent company, Seera Group Holding, and fellow subsidiary, Almosafer Company for Travel and Tourism. For the three months ended 31 March 2026, sales to Seera Group Holding were SR 40,890 and purchases were SR (596,417), with a due balance to the parent of SR 14,997,262. Sales to Almosafer Company for Travel and Tourism were SR 786,679 and purchases were SR (258,325), with a due balance from Almosafer of SR 786,679.

Mitigating Factors: The transactions with related parties are made at approved contractual terms. Outstanding balances at the period-end are unsecured, interest-free, payable on demand and settled in cash. There have been no guarantees provided or received for any related party receivables or payables.

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In-Depth Analysis