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4310

Governance: A

KEC

Knowledge Economic City

11.90 SAR / Share

As of: May 28, 2026

— P/E Ratio Trailing 12 Months

1.4x P/B Ratio Price to Book Value

— Dividend Yield Annual Dividend / Share

4.04B SAR Market Cap Total Valuation

1.14 Beta Systematic Risk Index

-9.9% Net Margin Net Profit / Revenue

The Story

Knowledge Economic City Company is a capital-intensive, early-stage master developer in Madinah experiencing rapid revenue growth alongside persistent operating losses and heavy debt accumulation as it builds out its economic city projects.

Source: Q1 2026 (2026-05-18)

Value Creation -6.5% 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

0.0%

Payout Ratio Percent of net profits distributed as dividends

—

Net Margin Net profit margin generated from total operational revenue

-9.9%

ROIC Return on Invested Capital

-0.6%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

—

P/B Ratio Market capitalization compared to corporate book value

1.4x

EV / EBITDA Operating multiple reflecting core operational leverage

—

EV / SALES Asset pricing multiple relative to total topline revenue

19.5x

Growth Story

Knowledge Economic City Company is in a high-growth phase of its development lifecycle, with revenues expanding dramatically from SR 66,860,666 in fiscal 2023 to SR 158,804,993 in fiscal 2024, and reaching SR 318,986,652 in fiscal 2025, with TTM revenue standing at SR 323,417,450. Despite this rapid top-line expansion, the company's sustainable growth rate is technically non-existent at -0.0% due to a negative five-year average ROIC of -0.58% and a reinvestment rate of 0.0%. This indicates that current growth is not self-sustaining but is instead fueled by external capital injections and heavy debt financing. The company's long-term growth capacity remains tied to its ability to successfully execute major master-planned projects, such as the KEC HUB and Al Aliyaa developments, and transition from a capital-intensive construction phase to a steady-state operational phase.

Profitability Dynamics

The company's profitability profile reflects its early-stage development status, characterized by persistent operating losses and value destruction. KEC's TTM EBIT stands at negative SR 16,209,658, representing an operating margin of -5.01%, while TTM net income is negative SR 32,113,911. This represents a gradual improvement from the operating losses of SR 44,285,166 in fiscal 2023 and SR 28,496,693 in fiscal 2024, but highlights that the business has yet to achieve operating scale. With a five-year average ROIC of -0.58% against a WACC of 5.92%, KEC faces a negative value creation gap of -6.50%, indicating that it is currently destroying economic value as it deploys capital. Cash flow generation is heavily constrained by massive capital expenditures, with TTM Capex reaching SR 639,626,795, reflecting the intense investment required to build out the economic city's infrastructure.

Risk & Capital Structure

Beta Systematic market risk indicator relative to the TASI index

1.14

Cost of Equity Minimum required rate of return demanded by shareholders

9.3%

WACC Weighted average cost of total debt and equity funding

5.9%

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

61.0%

Risk Factors

KEC's risk profile is dominated by its high leverage and substantial capital commitments. The group has accumulated SR 2,463,536,689 in total debt against a cash balance of SR 191,041,986, resulting in an enterprise value of SR 6,310,164,703. This debt is primarily composed of Shariah-compliant Murabaha facilities secured by corporate guarantees and mortgages on key land plots, including the Madinah Gate and KEC Hub Mall projects. The company's interest coverage is highly pressured due to negative operating income, and it relies on capitalising borrowing costs to manage its income statement impact. Furthermore, KEC faces significant liquidity risks, with accumulated losses of SR 457,770,000 as of March 31, 2026, and capital commitments of SR 1.06 billion contracted but not yet incurred, requiring careful management of its remaining SR 422,980,000 in unused credit facilities.

Governance Disclosures

Rating: A

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

Significance: 3/10 Tunneling

Board of Directors' Remuneration and Key Management Compensation

The Group disclosed Board of Directors' remuneration and related expenses of SR 1,041,149 and key management personnel remuneration of SR 1,844,074 for the three-month period ended March 31, 2026. Additionally, an outstanding balance of SR 3,509,731 for Board of Directors' remuneration was presented under accruals and other current liabilities as of March 31, 2026.

Mitigating Factors: The pricing terms and conditions of the transactions are agreed by the management of the Group and approved by the board of directors of the Parent Company.

Significance: 4/10 Tunneling

Sale of Residential Units to Board Member and Key Management Personnel

The Group disclosed that it sold residential units on a payment plan to a board member and a key management personnel. The revenue recognized from these transactions was SR 2,752,168 for the three-month period ended March 31, 2026, compared to SR 6,301,280 for the three-month period ended March 31, 2025.

Mitigating Factors: The transactions were conducted at the approved price, and the pricing terms and conditions were agreed by management and approved by the Board of Directors.

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In-Depth Analysis