Leejam Margin weakness and LFL cracks overshadow the expansion story; D/g to Underweight

Research evidence excerpt

Leejam Margin weakness and LFL cracks overshadow the expansion story; D/g to Underweight

J P M O R G A N CEEMEA Equity Research

25 June 2026

Leejam ▼Underweight

Previous: Neutral

Margin weakness and LFL cracks overshadow the 1830.SE, LEEJAM AB

Price (24 Jun 26):SRls79.50

expansion story; D/g to Underweight ▼Price Target (Dec-27):SRls72.40

Prior (Dec-27):SRls140.00

We downgrade Leejam to Underweight (from N) and lower our Dec-27 Price Target MENA Consumer and Real Estate

AC(PT) to SAR 72.4/share (-48% vs. prior PT), implying 9% downside to last closing. Taher Safieddine, CFA

Our UW thesis is driven by: 1) An ongoing aggressive center roll-out strategy which (971) 4428-1654

is pressuring utilisation rates, membership yields and operating margins given the taher.safieddine@jpmorgan.com

drag from newly opened centers (c. 18-30 months to reach EBITDA breakeven- J.P. Morgan Securities plc

maturity); 2) Increasing competitive intensity in the market coupled with still- Vardhman Chhajed

challenging consumer behaviour amid wallet pressure and down-trading; 3) Potential (91 22) 6157 5017

vardhman.v.chhajed@jpmchase.com

cannibalisation within the existing network which is weighing on like-for-like (LFL) J.P. Morgan India Private Limited

performance; 4) Our concerns with management's messaging on the Q1 26 results call

around initiatives to fix the core portfolio, which comes at a time where a significant

share of the network remains in ramp-up; and 5) A weaker medium-term fundamental Key Changes (FYE Dec)

profile with FY 25-28E CAGRs 3% on EBITDA and 0% on normalised net profit Prev Cur Δ

(JPMe 15%/20% below BBG consensus on FY 26E/27E EPS), set against a rich Adj. EPS - 26E (SRls) 6.66 4.91 -26.3%

Adj. EPS - 27E (SRls) 8.16 5.36 -34.4%