Saudi Kayan Q1 2021 results beat forecasts: AlJazira Capital

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Saudi Kayan Petrochemical Co.'s Q1 2021 net profit came above AlJazira Capital and consensus estimates of SAR 161.2 million and SAR 98.6 million, respectively.

"We remain positive on the company’s short-term growth prospects, given its operating efficiency amid improving market dynamics," the brokerage firm said in a recent report.

The Tadawul-listed petrochemical producer positively surprised the market by reporting a strong margin improvement, despite plant maintenance and an increase in feedstock cost.

The strong performance is a continuation of a healthy recovery from the impact seen during last few quarters amid the COVID-19 pandemic.

"Going forward, product prices are expected to stabilize around the current level with the pick-up in the global economic activities, and we don’t expect a significant improvement in 2021 due to the expected additional new capacities," AlJazira Capital said.

The firm expects Saudi Kayan to post a net profit of SAR 1.56 billion for 2021, and sales of SAR 10.65 billion, a rise of 33% compared to the year-earlier period.

AlJazira Capital reiterated its ‘Neutral’ recommendation on the stock, with a revised target price of SAR 18.70 a share.