Pilgrims, premium products, and price potential: Buy

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Pilgrims, premium products, and price potential: Buy

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BinDawood

Pilgrims, premium products, and price

potential: Buy

Reinstating Coverage: BUY | PO: 5.70 SAR | Price: 4.93 SAR

SAR5.70 PO implies 16% upside 02 July 2026

We reinstate coverage on BinDawood at Buy with a DCF-derived PO of SAR5.70, 16% Equity

potential upside. We see: (i) a 7.2% revenue CAGR 2025A-30E in the core grocery business as

it expands selling space by 19% and sales per sqm at a 3.6% CAGR; (ii) 30bps gross margin Mohsen Ameeri >> Research Analyst

expansion 2025A-30E as self-manufacturing of premium food items more than offsets Merrill Lynch KSA Company

challenging pharmacy economics; and (iii) an attractive entry point as the longstanding P/E +966mohsen.ameeri@bofa.com112 993 741

premium to GCC grocer peers has shrunk from 34% to 27% in the last year. Michael Jacks, CFA >>

Research Analyst

Merrill Lynch (South Africa)Multiple avenues for growth in core grocery business +27 113 055 158

BinDawood’s minimal bank debt position (0.5x EBITDA) provides freedom to invest michael.jacks@bofa.com

SAR436mm (15.6% of operating cashflow net of leases), opening 28 supermarkets and Jameel Bakhsh, CFA >>

86 convenience stores from 2026E-30E. Over the same period, we expect 11mm more Research Analyst Merrill Lynch (DIFC)

religious pilgrims to visit its home markets (~17-20% of total revenue) of Mecca and +971 4 425 8252

Medina, generating SAR758mm (12.3% of incremental grocery revenue). BinDawood’s jameel.bakhsh@bofa.com

differentiated e-commerce strategy, leveraging automation and its vast assortment, and See Team Page for List of Analysts

cross-sell potential with pharmacy offer additional support to sales.

Purchase of premium producer = profit progression Stock Data