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6020

Governance: A

GACO

Al Gassim Investment Holding Co.

11.91 SAR / Share

As of: May 28, 2026

44.8x P/E Ratio Trailing 12 Months

1.1x P/B Ratio Price to Book Value

— Dividend Yield Annual Dividend / Share

357.30M SAR Market Cap Total Valuation

0.65 Beta Systematic Risk Index

90.3% Net Margin Net Profit / Revenue

The Story

Al Gassim Investment Holding Company operates as a debt-free, cash-rich asset lessor facing structural operating losses, heavily reliant on a single major lease counterparty and non-operating finance income to sustain net profitability.

Source: Q1 2026 (2026-05-19)

Value Creation -6.0% 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

-0.7%

Payout Ratio Percent of net profits distributed as dividends

—

Net Margin Net profit margin generated from total operational revenue

90.3%

ROIC Return on Invested Capital

1.1%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

44.8x

P/B Ratio Market capitalization compared to corporate book value

1.1x

EV / EBITDA Operating multiple reflecting core operational leverage

—

EV / SALES Asset pricing multiple relative to total topline revenue

29.3x

Growth Story

GACO's revenue has been on a steady downward trajectory, shrinking from SAR 10.47 million in FY 2023 to SAR 10.05 million in FY 2024, and further to SAR 9.30 million in FY 2025, with TTM revenue landing at SAR 8.83 million. This top-line contraction is mirrored by a negative 5-year average reinvestment rate of -58.11%, indicating that the company is distributing or liquidating capital rather than reinvesting in its business. Consequently, its sustainable growth rate is negative at -0.66%. The long-term growth capacity is severely constrained by this lack of reinvestment and the passive nature of its primary assets, which are locked into a long-term lease with Al Wataniya Poultry Company.

Profitability Dynamics

On an operating level, GACO struggles to generate value, as evidenced by a TTM operating loss of SAR 620,739 and a negative operating margin of -7.03%. This continues a trend of operating volatility, with operating income swinging from a loss of SAR 1.68 million in FY 2023 to a gain of SAR 10.82 million in FY 2024, before falling back to a loss of SAR 4.89 million in FY 2025. The company's 5-year average ROIC of 1.13% fails to clear its WACC of 7.10%, resulting in a value-destructive ROIC-vs-WACC gap of -5.97%. However, net income remains positive at SAR 7.97 million TTM (a 90.26% net profit margin) due to non-operating finance lease interest and installment sales interest, which bypasses operating income but keeps the bottom line afloat.

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

7.1%

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

0.0%

Risk Factors

From a balance sheet perspective, GACO carries zero debt and holds a substantial cash cushion of SAR 98.25 million as of March 31, 2026, giving it an exceptionally low leverage profile. However, its risk profile is dominated by severe asset and legal concentration. The company is heavily exposed to a single counterparty, Al Wataniya Poultry Company, for its lease and installment receivables. More critically, a major legal blow occurred on April 21, 2026, when the Higher Administrative Court rejected GACO's appeal against the Ministry of Environment, Water and Agriculture, forcing the company to derecognize SAR 20.98 million of disputed Shari land assets and its associated government grant. Additionally, a plot of land in Madinah valued at SAR 13.22 million remains registered under a bank's name despite the settlement of all underlying obligations, highlighting ongoing administrative and legal vulnerabilities.

Governance Disclosures

Rating: A

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

Significance: 5/10 Asset Risk

Delay in Re-transfer of Madinah Land Title Deed

A plot of land in Madinah Al-Munawarah valued at SR 13,223,238 remains registered under the name of Al-Rajhi Bank as a guarantee for settled facilities, as the legal formalities to re-transfer ownership to the company have not been completed.

Mitigating Factors: The company has fully settled all its obligations to Al-Rajhi Bank related to the facilities for which the land was pledged.

Significance: 4/10 Tunneling

Board and Committee Remuneration

The Board of Directors approved a lump-sum bonus for board members and subcommittees for the year 2025 totaling SAR 1,685,410. This is in addition to other key management personnel benefits totaling SAR 2,128,982.

Mitigating Factors: The payment was approved based on the recommendation of the Remuneration and Nominations Committee.

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In-Depth Analysis