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6060

Governance: A

SHARQIYAH DEV

Ash-Sharqiyah Development Co.

12.17 SAR / Share

As of: May 28, 2026

— P/E Ratio Trailing 12 Months

1.0x P/B Ratio Price to Book Value

— Dividend Yield Annual Dividend / Share

365.10M SAR Market Cap Total Valuation

0.65 Beta Systematic Risk Index

-8.7% Net Margin Net Profit / Revenue

The Story

A legacy agricultural entity attempting a high-stakes pivot into logistics and construction while navigating significant land-title hurdles and operating losses.

Source: Q3 2025 (2025-12-03)

Value Creation -8.2% 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

-8.7%

ROIC Return on Invested Capital

-0.9%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

—

P/B Ratio Market capitalization compared to corporate book value

1.0x

EV / EBITDA Operating multiple reflecting core operational leverage

—

EV / SALES Asset pricing multiple relative to total topline revenue

1.6x

Growth Story

The company is currently in an aggressive expansion phase, evidenced by a dramatic revenue surge from just 250,000 SAR in fiscal 2023 to a TTM figure of 216.45 million SAR. This growth is driven by the activation of new business lines in sales of goods and logistics services. However, this top-line momentum is not yet self-sustaining; the five-year average ROIC stands at -0.92%, and the sustainable growth rate is effectively zero. While the company is successfully capturing market share in its new segments, it lacks the internal return profile to fund this growth through operations, necessitating a heavy reliance on external capital and strategic reclassification of assets.

Profitability Dynamics

Profitability remains the primary challenge as the company scales. With a TTM operating margin of -5.66% and a net profit margin of -8.68%, the business is currently destroying value, evidenced by a negative ROIC vs. WACC gap of -8.75%. The transition to active operations has brought significant costs, resulting in an EBIT loss of 12.26 million SAR for the TTM period. Furthermore, the company is in a heavy investment cycle, with TTM capital expenditures reaching 40.36 million SAR, which, combined with negative operating income, places significant pressure on cash flow generation.

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

7.2%

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

0.6%

Risk Factors

The risk profile is defined by legal complexities and liquidity needs rather than traditional leverage. While total debt is low at 2.06 million SAR, management has disclosed a material uncertainty regarding the company's ability to continue as a going concern, pending a planned rights issue to secure liquidity. A critical business-specific risk involves 72 million square meters of agricultural land; a 2022 ministerial decision confirmed that a title deed cannot be issued in the company's name due to Saudi Aramco's reservations. While the company retains use of the land, the lack of ownership certainty creates a long-term valuation overhang and complicates the use of the land as collateral.

Governance Disclosures

Rating: A

We track 2 key governance and oversight matters for this company in our database.

Significance: 6/10 Entrenchment

Capital Increase via Rights Issue for Liquidity

Management has identified a need for liquidity to commence planned operations and fulfill obligations. To address this, the company plans to increase its capital through a rights issue, which will impact the existing shareholder structure and control.

Mitigating Factors: The plan is part of an approved future strategy to ensure the company remains a going concern.

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In-Depth Analysis