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4323

Governance: D

SUMOU

Sumou Real Estate Co.

29.06 SAR / Share

As of: May 28, 2026

9.8x P/E Ratio Trailing 12 Months

1.9x P/B Ratio Price to Book Value

3.4% Dividend Yield Annual Dividend / Share

1.45B SAR Market Cap Total Valuation

0.65 Beta Systematic Risk Index

24.5% Net Margin Net Profit / Revenue

The Story

Sumou Real Estate Company is a high-margin, low-leverage developer delivering strong revenue growth and double-digit returns on capital through strategic residential and commercial projects.

Source: Q1 2026 (2026-05-16)

Value Creation +10.1% 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

3.4%

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

+4.2%

Payout Ratio Percent of net profits distributed as dividends

33.7%

Net Margin Net profit margin generated from total operational revenue

24.5%

ROIC Return on Invested Capital

17.1%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

9.8x

P/B Ratio Market capitalization compared to corporate book value

1.9x

EV / EBITDA Operating multiple reflecting core operational leverage

9.7x

EV / SALES Asset pricing multiple relative to total topline revenue

2.4x

Growth Story

Sumou's revenue has experienced a strong upward trajectory, rising from 273.8 million SAR in FY 2023 to 429.5 million SAR in FY 2024, and reaching 522.7 million SAR in FY 2025, with TTM revenue climbing further to 606.7 million SAR. This growth is fueled by a diverse portfolio of projects under development across Makkah, Madinah, Dammam, and Jeddah, such as the Areem 1 & 2, Al-Samia, and Al Aali housing projects. With a 5-year average reinvestment rate of 24.62% and a 5-year average ROIC of 17.07%, the company's sustainable growth rate stands at 4.20%. This indicates that while current top-line expansion is rapid due to project execution cycles and off-plan sales, its long-term self-funded growth capacity is anchored by disciplined capital allocation and steady reinvestment back into its development pipeline.

Profitability Dynamics

Sumou demonstrates exceptional value creation, characterized by a substantial positive spread between its 5-year average ROIC of 17.07% and its WACC of 7.00%, yielding a value-creating gap of 10.07%. This profitability is underpinned by robust margins, with a TTM operating margin of 23.92% and a net profit margin of 24.48%, translating to a TTM EBIT of 145.1 million SAR and Net Income of 148.5 million SAR. The company's profitability is highly efficient, driven by its real-estate services and development segments, which generate strong cash flows. This financial strength allows the company to maintain a consistent dividend policy, such as the 25 million SAR cash dividend approved for the second half of 2025, while continuing to fund its ongoing projects.

Risk & Capital Structure

Beta Systematic market risk indicator relative to the TASI index

0.65

Cost of Equity Minimum required rate of return demanded by shareholders

7.1%

WACC Weighted average cost of total debt and equity funding

7.0%

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

2.7%

Risk Factors

Sumou maintains a conservative financial risk profile, supported by a low-leverage capital structure with total debt of 39.3 million SAR against a cash balance of 54.5 million SAR, leaving the company in a net cash position. Its cost of debt after-tax is low at 2.37%, and its relevered beta of 0.65 reflects lower systemic volatility relative to the broader market. However, the business faces specific operational risks, including substantial outstanding capital commitments of 401.8 million SAR for project development and contingent liabilities of 64.0 million SAR in letters of guarantee. Additionally, the company is exposed to concentration and transaction risks with related parties, such as Sumou Holding Company and various associated real estate funds, which represent a significant portion of its receivables and revenues.

Governance Disclosures

Rating: D

We track 13 key governance and oversight matters for this company in our database.

Significance: 6/10 Info Asymmetry

Concentration of Revenue and Contracting with Related Parties

During the three-month period ended March 31, 2026, the Group generated SR 35,313,752 in revenue from related parties (including SR 15,000,000 from Asmou Real Estate Development Company and SR 18,000,000 from Sumou Dahiet Real Estate Fund) and incurred contracting works costs of SR 22,100,558 with Buna Al Jazira for Contracting Co., an affiliate.

Mitigating Factors: Disclosed as occurring during the normal course of business.

Significance: 4/10 Entrenchment

Overlapping Board Representation in Associate

The Group exercised significant influence over Tanal Real Estate Development and Investment Company through overlapping board members, where the Chairman of Tanal was also the Chairman of Sumou Real Estate, and another Tanal board member served as the Deputy Chairman of Sumou Real Estate.

Mitigating Factors: The investment was treated using the equity method to reflect this influence, and the shareholding was subsequently transferred to Sumou Holding Company in March 2026.

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In-Depth Analysis