沙特证券交易所集团（TADAWULG AB）：减持较弱的交易量尚未在价格中体现

Disclosures & DisclaimerThis report must be read with the disclosures and the analyst certifications inthe Disclosure appendix, and with the Disclaimer, which forms part of it.◆Year-to-date trading volume, down c30% y/y, may lead tonegative earnings surprises in the near term◆We cut net income by 4% and 5% in 2025e and 2026e,respectively. This places us25% below consensus in 2025e◆CutTP to SAR147(fromSAR170).Maintain Reduce rating.Stock tradesat42.4x EPS ‘26eYear-to-date trading volume down 30% y-o-y.We trim our ADTV assumption toSAR5.8bn from SAR6.4bn in 2025e and to SAR6.7bn from SAR8.0bn in 2026e. Thisimplies ADTV would decline 22% y-o-y in 2025e following a 39% y-o-y increase in 2024.Even though revenue sensitivity to ADTVhasreduced, we estimate revenuewoulddecline by7% y-o-yin 2025e.Management’sfocus on investment capexandstaff hiringimplies that EBITDA margins would remain under pressure in the near term.Cost growth above trend.Further staff hiring as well as technology investmentscreatematerial pressure on the EBITDA margin at a time of cyclically weak revenues.Weassume that management will be more rational with costs for the rest of the year. We nowassume a 13% y-o-y increase in costs vs 18% y-o-y previously in 2025e.We expectoperating cost growth toremain inthemid-to-low teens during 2025-27e. With negativeoperating leverage this year, we estimatetheEBITDA margin fallsto 34% from 44.7% in2024.Saudi Tadawul Groupaimsfornormalised EBITDA margins to be at55-60%.Trim net income by 4% in 2025e and 5% in 2026e.We reduceournet incomeestimatesontheback of more conservative ADTV expectations (Exhibit7).Itsongoing focus on non-trading fees and commissions should improve revenue marginto9.8bpin 2025from 8.4bp in 2024. Listing, data & technology, and membershipfees offsetac23% y-o-y decline in trading fees in 2025, we estimate.Valuation.We cutourTP to SAR147from SAR170due toournegative earningsrevisionsandourview that the companywill beunlikely to achieveanormalisedEBITDA margin target until 2032edue to structural limits to higher market velocity,39% as at 1Q 25. Lack ofefficientmarket making, a long lead time for theintroduction of a liquid Saudi equity ETF futures productandaslower offtake in thesecurities borrowingand lendingbusinessare some of the impediments to astructural boost to domestic liquidity and market turnover.The shares trade at42.4xEPS ‘26e.The key upside risk centres on stronger than expected growth in non-trading fees andalower increase in operating coststhan we forecast.Saudi Tadawul Group(TADAWULG AB)Reduce:Weaker trading volumes not priced in 40%5.896.16-4.46.2630.81.922.817.7 2Financial statementsYear to12/2024a12/2025e12/2026e12/2027eP&L summary(SARm)Revenue1,4471,3491,6121,951Capital markets461411493626Trading341262306398Listing fees113134167204Derivatives(1)445Membership8121619Data & Technology220253328394Post-trade658585702843Expenses(877)(991)(1,129)(1,264)Operating profit / EBIT566358483687EBITDA647460593800PBT681443570785Taxation(60)(44)(57)(79)Minorities----Net profit622399513707HSBC net profit622399513707Balance sheet summary(SARm)Total assets9,1419,81110,47811,083Current assets7,4598,0608,6739,262Cash & Investments5,9966,7397,4448,014Fixed assets367397429450Goodwill & other Intangibles422464488488Total liabilities5,6496,0956,5496,863Bank loans----Shareholders' equity3,4923,6513,8574,139Minority interest----ROAA deconstruction, growth and per share analysisYear to12/2024a12/2025e12/2026e12/2027ePer share (SAR)EPS reported5.183.324.285.89HSBC EPS5.183.324.285.89DPS3.351.992.573.53Tangible BVPS25.5826.5628.0830.43y/y change (%)Revenue35(7)2021Capital markets38(11)2027Trading40(23)1730Listing fees27182522Derivatives(21)(612)1012Membership94503020Data & Technology34153020Post-trade31(11)2020Expenses18131412EBITDA61(29)2935Operating profit / EBIT72(37)3542PBT56(35)2938Net profit59(36)2938HSBC EPS (recurring)59(36)2938ROAA deconstruction (%)Revenue17.214.215.918.1Expenses(10.5)(10.5)(11.1)(11.7)EBITDA7.74.95.87.4Operating profit / EBIT6.73.84.86.4PBT8.14.75.67.3Net Profit7.44.25.16.6Financials & valuation:Saudi Tadawul Group Investment case in key charts1: ADTV most recently and our forecastsSource: Company data, Saudi Exchange, HSBC Research estimates; *Excl. Aramco3: Capex to revenueratio remains above 10%Source: Company data, HSBC Research estimates5:Cost breakdown (SARm)Source: Company data, HSBC Research-0.51.01.52.02.53.01819202122231Q 242Q 243Q 244Q 2425e26e27eADTV (USDbn)Growth (RHS, y-o-y)0%10%20%30%40%50%60%19202122232425e26e 27eCapex/Revenue-501001502002501Q 202Q 203Q 204Q 201Q 212Q 213Q 214Q 211Q 222Q 223Q 224Q 221Q 232Q 233Q 234Q 23SalariesCMA feesMaintenanceDepreciationConsultancyOther Risksto our viewUpside risks:1) Bolt-on acquisitions resulting inhigher-than-expected accretion to earnings, 2)increase in foreign ownership limit of listed Saudicorporates to 100%, 3) better-than-expected costcontrol resulting in higher EBITDA margins; and3) sooner-than-expected incre