Zain KSA Kept at Neutral as Aljazira Capital Notes Q2 Results

04:21 AM EDT, 07/29/2026 (MT Newswires) -- Aljazira Capital on Tuesday kept its neutral investment view and 11.4 Saudi-riyal price target on Mobile Telecommunication Co. Saudi Arabia (SASE:7030), d/b/a Zain KSA, after it took note of the company's second-quarter results. "Zain KSA's normalized Q2-26 results were broadly in line with our expectations. The company continues to witness topline pressure, while revenue mix improvement continues to support a better margin profile. Moreover, the rising 5G contribution in consumer segment is positive. However, we believe margins are partly supported by temporary dip in handset sales due to ongoing supply issues," analysts said. Thanks to one-off gains from a Universal Service Fund income and the sale of a portion of Tamam's previously written-off receivables, the telecommunications company logged a 60.6% annual rise in its second-quarter net income to 204 million Saudi riyals. Revenue, meanwhile, edged down 0.1% year over year to 2.65 billion riyals, which aligned with Aljazira's estimate of 2.69 billion riyals. "Over the medium term, the leverage is expected to stay high amid CAPEX and working capital requirements. Although Zain KSA maintains sector-leading gross margins and benefits from traction in 5G and Tamam, the stock seems to be fairly valued at the current valuation."