stc授予Solutions新6.52亿沙特里亚尔合同

Evgenii Annenkov * | Equity Analyst+971 4 4231 6008 | eannenkov@jefferies.comAvishay Mehra * | Equity Analyst+971 4 4231 6009 | avishay.mehra@jefferies.comExcluding smart parking agreements (revenuesharing) the new stc/Oracle award is likely the2nd largest after the contract with Aramco.652444382373329310300stcstcstcstcSource: TadawulExhibit 2 - Timeline of Solutions' publiclydisclosed contract awards, SAR mThe new award adds up to SAR33m quarterlyrevenue and >1pp of Y/Y growth potentially assoon as from 2Q25.050100150200250300350400Source: Tadawul, Jefferies Exhibit 3 - Solutions disclosed contract awards since Oct, 2021SAR6.3bn in awards has been disclosed, out of which SAR1.3bn so far in 2025, vs SAR1.9bn in 2024.DateClientOct 1, 2021stcOct 1, 2021stcDec 1, 2021stcApr 13, 2022stcJul 1, 2022stcDec 1, 2022stcMay 1, 2023stc BankJun 1, 2023National Center forGovernment ResourcesSystemsAug 1, 2023stcSep 1, 2023stcNov 9, 2023stcNov 13, 2023AramcoJan 15, 2024stcJan 24, 2024Remat RiyadhDevelopment CompanyFeb 8, 2024Digital Centers for Dataand TelecommunicationsCompany (Center3)Mar 10, 2024AramcoApr 15, 2024stcOct 16, 2024stcDec 11, 2024stcFeb 13, 2025Sports BoulevardFoundationApr 22, 2025stcMay 19, 2025stcSource: TadawulPlease see important disclosure information on pages 3 - 9 of this report.This report is intended for Jefferies clients only. Unauthorized distribution is prohibited. Company DescriptionSolutions by stcSolutions by stc engages in the provision of information technology consulting and systems integration services. It operates through the followingsegments: Core ICT Services, IT Managed and Operational Services, and Digital Services. The company was founded on January 11, 2003 and isheadquartered in Riyadh, Saudi Arabia.Company Valuation/RisksSolutions by stcWe derive our SAR375 PT based on a DCF model. Our key assumptions include (1) 3.5% PGR, (2) 16.5% terminal EBITDA margin, (3) 1.5% terminalcapex/revenue, and (4) 9.6% WACC. We use transaction valuation to calculate value of a 40% stake in Devoteam Middle East. Key downside risksinclude (1) weaker-than-expected Saudi macro, reliant on oil prices; (2) intensifying competition in the Saudi IT, including with global players; (3) limiteddiversification from stc and legacy services curbing growth potential amidst workloads transition to the cloud; (4) tech talent scarcity and elevatedattrition affecting margins; (5) FCF pressure from unfavourable working capital dynamics; (6) M&A-related execution risks.Oracle CorporationOur PT of $190 is based on a DCF analysis (CoE 10%; TG 5%) and implies a 29x earnings multiple on our FY26 EPS est. Key risks include execution tomigrate customers to cloud-based solutions on the infrastructure side of the business, and incrementally greater competition in applications againstenterprise software peers.Saudi AramcoOur SAR 31/sh PT is derived from the average of a DCF model and sum of the parts. Aside from commodity price volatility, key risks relate to KSA /OPEC imposed production levels, the KSA dominant shareholding position along with Aramco's importance in covering the KSA's budget, as well asthe risk of regional conflicts that could affect the company's operations.Saudi Telecom CompanyWe derive our SAR46.0 PT based on a 50-50 mix of a DCF-based SOTP and target 2025E DY of 4.5%. Our key assumptions include: (1) 2.0% PGR, (2)33.0% terminal EBITDA margin, (3) 15.0% terminal capex/revenue, (4) 8.9% WACC. We use a DCF-based fair valuation to calculate value of a minorityinterest in Solutions. We use transaction values and our 2025E net debt estimate to calculate value of a minority interest in a new TowerCo. We usecurrent market price to calculate value of a minority interest in stc Kuwait and a 9.9% stake in Telefonica. We apply a 5% target discount related toM&A/execution risks. Key downside risks include: (1) weaker than expected KSA macro, reliant on oil prices, (2) bigger than expected pressure at stcEBU, (3) higher for longer losses at new verticals, (4) M&A-related and execution risks.Analyst Certification:I, Evgenii Annenkov, certify that all of the views expressed in this research report accurately reflect my personal views about the subject security(ies) andsubject company(ies). I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or viewsexpressed in this research report.I, Avishay Mehra, certify that all of the views expressed in this research report accurately reflect my personal views about the subject security(ies) and subjectcompany(ies). I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressedin this research report.Registration of non-US analysts:Evgenii Annenkov is employed by Jefferies Int'l Ltd. Dubai, a non-US affiliate of Jefferies LLC and is not registered/qualifiedas a research analyst with FINRA. This analyst(s) may not