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When I was a kid, nothing sparked my imagination more than wandering through electronics stores. Browsing the shelves, eyeing the PlayStation games — though my mom never let me get Black Ops 2…
📈The Stock: Extra (4003.SR)
Little did I know back then that this same electronics store would grow to 48 branches across Saudi Arabia, stocking over 12,000 products — far more than just a few game titles 😲.
They Sell:
Home Appliances → Fridges, Washing Machines, Microwaves
Personal Care → Hair Dryers, Trimmers
Computers → Self Explanatory
In Short: Go there If You need to shave your dad’s back and get a new phone at the same time.
💰Show me The Money
Metric | 2022 | 2023 | 2024 |
Profit Margin (%) | 7.2 | 6.2 | 7.7 |
Operating Cash Flow (Millions SAR) | -68.2 | 195.8 | 277.9 |
Profits (Millions Sar) | 440.1 | 390.4 | 527.9 |
Return on Equity (%) | 38.6 | 30.4 | 25.8 |
If you’re holding this stock, you’re pocketing a solid 5.71% dividend yield — which is great. But under the hood, this kind of business runs on thin margins, which we don’t exactly love.
Revenue is steady, but cash balances swing wildly. More importantly, profits look prettier on paper than in the bank: operating cash flow consistently lags behind reported profits.
That’s a red flag — because when a business can’t scale forever, you’d at least want it to print cash like crazy.
For example, in 2024 alone, nearly SAR 250 million in profit didn’t show up as cash (profit minus operating cash flow). Ouch.
On top of that, returns on equity are dropping fast year-over-year. Management seems to be adding more equity (or trimming debt) — good for stability, but bad for juicing returns.
🥱What’s So Special?
Board Members are competent and have had long tenures.
We always want to check for incentives via ownership. The largest Shareholder is the Al Fozan Holding Company with 15% ownership worth 1 billion SAR.
They are a prominent business family. The vice chairman of Extra is from the Fozan Family so we believe his actions will align with the interests of the largest shareholder.
Strong family backing and an experienced board give us some peace of mind — but remember, steady dividends and a good name can’t replace healthy cash flow forever.
So, if you’re holding Extra Electronics… stay Extra Careful.
See You Next Sunday!
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