Riyadh – Mubasher: Al Rajhi Capital reverted to “Neutral” rating on all Saudi listed healthcare companies as they have an upside potential of less than 10%, according to a report.
“The healthcare has been one of our preferred sectors in the Saudi market due to its high growth potential and defensive nature,” Al Rajhi added.
The healthcare stocks, except Al Hammadi Company, have risen 25% on an average year to date, backed by easing concerns on market liquidity after the Saudi government’s announcement to clear dues of around SAR 100 billion.
National Medical Care Company (NMCC) and Al Hammadi have seen the highest increase in accounts receivables, surging to 66% and 69% of last four quarters’ revenues from 49% and 28% at the end of 2014.
However, both firms also have downside risks if fourth-quarter results do not indicate improvement in receivables.
Dallah Healthcare Holding and Mouwasat Medical Services also have downside risks as they had seen no prior increase in receivables.
