Riyadh: Arqaam Capital maintained its Buy recommendation on the Saudi Reinsurance Company "Saudi Re" share and increased the target price from SAR 11 to SAR 14.7 per share.
"Arqaam Capital" highlighted that the sole Saudi reinsurer is positioned to benefit from growth opportunities in the home market and expected Saudi Re to double premium within 3 years as Saudi Re was named exclusive reinsurer of the new compulsory Inherent Defect Insurance (IDI) for 5 years.
"Arqaam Capital" added that Saudi Re continued to record double-digit premium growth of 30.1% y/y in H1, 2020 benefiting from both its increased credit rating (Moody’s A3) and the woes of its struggling regional competitors.
According to "Arqaam Capital", Saudi Re has an attractive valuation and a compelling growth prospects. The target price represents a growth opportunity of 46% from the current market price, which trades at less than its book value at a rate of book value of 0.9.
Saudi Re is a leading reinsurance company in the MENA region, providing risk transfer solutions to insurance companies in more than 40 markets. The company offers treaty and facultative reinsurance solutions in engineering, property, marine, casualty, motor, life and health.
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