Arqaam capital, a specialist emerging markets financial services company recently published its Initiation Report on Estithmar Holding Q.P.S.C, which operates across five key market segments with a focus on healthcare, hospitality, contracting, services and a wide range of industries.
Estithmar Holding is a direct play on the growing healthcare exposure via its wholly owned and operated healthcare facilities, The View and the Korean Medical Center, while also growing its operational management model via long-term contracts with other facilities in the country and regionally (Iraq, Kazakhstan, Egypt, and Algeria). According to the report it is expected to have higher contribution from Healthcare and Ventures clusters and an increasing focus on cost efficiencies to support an EBITDA margin uplift from 12.2 percent in FY 22 to 19.9 percent in FY 27e.
Read more: Estithmar Holding Q.P.S.C. announces 8 percent increase in H1 net profit
Strong growth
According to arqaam capital report a strong growth runway, 3-yr EBITDA CAGR of 41.1 percent. In addition to a stable and long-term growth derived through higher contributions from multiple segments; key supporting market drivers include low healthcare/hospital penetration and supportive regulation, a strong pipeline of projects in Qatar, Iraq, and Saudi especially red Sea projects through PIF contracts, and increasing exposure to tourism via its venture’s exposure. The company aims to triple its EBITDA by 2025 (ACe 2.8x) and has budgeted QAR 2.1bn in CapEx.
Moreover, the report highlights a strong FCF in FY 24e; potential for dividend commencement in the near-term strong EBITDA growth will lead to improved FCF (as per the estimates highlighted by the report), despite significantly front-loaded CapEx.
Estithmar Holding trades at 11.6x FY 24e EV/EBITDA, in-line with the sector, while offering superior growth prospects and a shift towards higher margin business.
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