QEWS’ 1Q24 revenue growth comes largely in line with consensus, matches U Capital’s estimate
QEWS’ top line increased 4.0% YoY in 1Q24, coming largely in line with the consensus estimate (-4.4% variance). The top line matched our expectations as revenue of both the power and water segments came in line with our estimates (+0.7% variance, and -2.8% variance, respectively) amid capacities remaining stable.
Net income declines on lower other income and exceptional gains booked in 1Q23, coming in below Bloomberg consensus but matching U Capital’s estimate
Despite a higher revenue YoY and healthy gross profit growth, QEWS’ operating profit declined 10.2% YoY mainly due to around 36% YoY decrease in other income to QAR 77.2mn. This partially dragged down the bottom line, which was also impacted by the absence of any one-off income in 1Q24 as compared to the QAR 77.7mn gain booked by the company in 1Q23. Overall, the bottom line fell 20.5% YoY, missing Bloomberg consensus of ~QAR 419mn, but in line with our estimates.
Maintain target price
Considering the largely in-line 1Q24 financial performance, we maintain our QAR 20.50 target price on the stock.
Valuation
At the current market price, the stock is trading at 12.1x P/E, based on our FY’24 estimates, slightly below its 3-year blended daily average forward P/E of 12.5x.