Saudi Tadawul Group Initiation: A Long-Term Opportunity Amid Market Recovery

Following the stock decline in the wake of the outsized Aramco placement, we now see a better-balanced combo of the high multiple and earnings growth, the best within the peer group. Our growth expectations are based on improved outlook for Saudi macro, the rapid market broadening, free float rising on privatization sales and growing equity culture, and surging foreign inflows, up near 200% in 2020-24. We believe that the shares recovery is now on the cards. While volumes volatility remains a risk, we see an attractive risk reward opportunity for patient long-term investors - buy on dips.