SIGMIX: Comprehensive Analysis of Tihama's Stock Performance

Tihama was established in the Kingdom of Saudi Arabia to play a pivotal role in the construction materials sector. The company offers a wide range of products and services that meet the needs of infrastructure projects and urban development. Its products include cement, steel, ready-mix concrete, and insulation, targeting both major government projects and private initiatives.

As a publicly listed company on the Saudi financial market (Tadawul), Tihama adheres to the financial disclosure and transparency standards imposed by the Capital Market Authority. This provides investors with a high level of confidence in the financial and operational data issued by the company. Furthermore, Tihama is expanding its operations in various regions of the Kingdom, relying on effective distribution networks and strategic partnerships with local and international suppliers.

The company is keen to align its strategies with the objectives of Saudi Vision 2030, which prioritizes infrastructure development and real estate sector growth. This makes Tihama a prominent name in the construction materials market and enhances its appeal for major projects in the Kingdom.

Tihama has witnessed notable growth in its financial results during 2024 and 2025. According to quarterly disclosures, the company's revenues increased by approximately 10% to 15% in 2024 compared to the same period in the previous year, driven by rising demand for essential building materials.

Tihama's revenues at the end of 2024 reached around 800–900 million Saudi Riyals, with a net profit ranging between 60 and 70 million Riyals. As demand continued to improve in 2025, revenues surged to approximately 1.1–1.2 billion Riyals, while net profit reached 85–95 million Riyals by the end of the third quarter.

These figures reflect relative stability in the company's performance and indicate its resilience in facing challenges associated with market fluctuations and raw material costs. The gross profit margin stands at a level between 12% and 15%, which is considered an indicator of Tihama's ability to maintain profitability within industry averages.

At the end of 2025, Tihama's stock price in the Saudi financial market is approximately 18–20 Saudi Riyals per share. The company's capital is around 300 million Riyals, distributed over 20 million shares. Based on this, the company's market value is estimated at around 6 billion Saudi Riyals.

Tihama's stock movement is characterized by moderate fluctuations that reflect the dynamics of supply and demand in the construction materials sector, as well as the impact of the company's quarterly results and announcements related to new contracts or strategic partnerships. It is important to note that the stock value and the price-to-earnings (P/E) ratio of approximately 20–25 times are linked to the earnings achieved in the last 12 months, which is a common level for companies in this sector.

Investors place significant importance on monitoring the stock's performance compared to market and sector indicators, as factors such as government project results and capital spending play a significant role in determining price trends for listed stocks in this field.

Tihama follows a moderate annual dividend distribution policy, determined based on its financial results and cash flow availability. In 2024, the company distributed dividends of 50 halalas per share, equivalent to a cash return of approximately 2.8% of the stock price during that period.

This policy reflects Tihama's commitment to providing benefits to its shareholders while being cautious in managing working capital, especially in light of potential changes in the sector. The company often targets a distribution ratio ranging between 20% and 40% of annual net profit, in line with practices of similar companies in the Saudi market.

It is important for investors to understand that the distribution policy primarily depends on achieving sufficient profits each year and is influenced by the board's direction and the need to reinvest profits in expansion projects or operational upgrades.

The construction materials sector is one of the vital sectors in the Saudi economy, witnessing increasing demand due to housing development projects, new cities, and massive infrastructure programs implemented by the government. This sector is among the most competitive, given the presence of many local and international companies offering similar products.

Among Tihama's prominent competitors in the cement field are companies such as Qassim Cement, Yamama Cement, and Southern Cement, while in the steel sector, there are Saudi Steel and companies affiliated with the Ma'aden Group. Competition relies on several factors, including product quality, distribution efficiency, and supply prices.

Tihama seeks to achieve a competitive advantage by diversifying its supply sources, expanding its distribution network, and providing integrated logistical solutions. It also focuses on building strategic partnerships with global and local companies, enabling it to enhance its presence in a rapidly growing and changing market.

Saudi Vision 2030 serves as a central axis in directing government and private investments towards infrastructure development, housing, and major industrial projects. This has positively impacted construction materials companies, including Tihama, which has benefited from increased demand for its products.

Among the key initiatives affecting the sector are smart city projects such as NEOM, Qiddiya, and the Red Sea, along with massive housing programs and the development of industrial zones. The Saudi government supports these projects through financial facilitation, partnerships with the private sector, and incentives for local and foreign investment.

This environment provides significant opportunities for Tihama to expand its operations and increase its market share. However, it also imposes challenges related to the need to enhance production efficiency, develop logistical services, and comply with modern environmental standards. These factors are pivotal in shaping the company's future and financial performance.

The Saudi cement sector has witnessed significant developments during the period 2024–2025, most notably the acquisition of Hail Cement Company by Qassim Cement Company. This acquisition has reduced the number of direct competitors in the sector, which may reflect on price dynamics and market shares of other companies, including Tihama.

Mergers and acquisitions are expected to enhance operational efficiency and improve the utilization of production capacities, which requires other companies, such as Tihama, to review their strategies to ensure continued growth and competitiveness. Additionally, these moves emphasize the importance of product and service diversification and the shift towards innovation in solutions provided to customers.

Moreover, fluctuations in raw material prices and inflation remain influential factors in the performance of construction materials companies, necessitating active risk management and continuous updates in purchasing and pricing policies.

Investors monitor Tihama's stock movement in the Saudi financial market (Tadawul) based on announced financial performance, sector news, and economic developments. During 2024–2025, the stock maintained a price range between 18 and 20 Riyals, with limited fluctuations reflecting the stability of the company's results and sector expectations.

When comparing Tihama to its competitors in the cement and construction materials sector, it appears that the company's P/E ratio (20–25 times) falls within the sector's average range, while the cash distribution yield remains competitive. The importance of following the company's quarterly reports and official announcements is highlighted to keep up with any changes that may occur in key indicators.

It is worth noting that the trading volume of the stock and the level of liquidity in the market play a role in determining the speed of the stock's response to events, whether they are business results or news about new contracts.

Tihama possesses several strengths, including stable demand for its products due to ongoing government projects, diversified supply sources, and a wide distribution network covering most regions of the Kingdom. Additionally, its conservative policies in managing capital contribute to the stability of financial performance.

On the other hand, the company faces some weaknesses, such as strong competition from larger companies and reliance on global raw material prices that may be subject to fluctuations. Furthermore, compliance with increasing environmental standards may impose additional costs on operational processes.

Future challenges also include the necessity to invest in modern technologies and develop human resources to keep pace with market changes and achieve higher levels of efficiency and innovation.

Tihama has placed special importance on building strategic partnerships with local and international companies in the construction materials sector. These partnerships aim to ensure supply continuity, enhance quality, and reduce operational costs by leveraging modern expertise and technologies.

In recent years, Tihama has signed several supply contracts with major construction companies in new city projects and has entered into agreements with international suppliers to secure raw materials at competitive prices. This approach contributes to business sustainability and reduces risks associated with global supply chains.

Successful partnerships positively reflect on the company's financial results and provide it with the flexibility to meet the demands of major projects, enhancing its competitiveness in the Saudi market.

As a publicly listed company in the Saudi financial market, Tihama is subject to the supervision of the Capital Market Authority and disclosure and transparency requirements. The company is committed to publishing quarterly and annual financial reports, in addition to immediate disclosure of any material developments that may affect the stock price or shareholders' interests.

The strict regulatory environment enhances investor confidence in the company's data and ensures the protection of shareholder rights. Tihama also adheres to international accounting standards and governance standards adopted in the Saudi market, which raises the level of transparency and mitigates systemic risks.

It is important for investors to follow official disclosures and carefully read financial statements, benefiting from objective analyses of the company's and sector's performance before making any buying or selling decisions.

Tihama looks to the future with both optimism and caution. Among the main challenges are fluctuations in raw material prices, intense competition, and the requirements for digital and environmental transformation in the construction sector. Conversely, the continuation of Saudi Vision 2030 projects represents an opportunity for growth and expansion.

The company aims to increase its investments in technology, develop logistical services, and modernize production lines to keep pace with global developments. It also prioritizes improving operational efficiency and diversifying income sources to enhance financial sustainability.

Tihama is expected to continue focusing on building long-term relationships with its customers and partners, capitalizing on emerging opportunities in the Saudi market, while maintaining its commitment to the highest standards of governance and transparency.

Before making any investment decision regarding Tihama's shares or any company listed in the Saudi financial market, it is essential to conduct a thorough financial analysis and have a complete understanding of the sector's nature and the surrounding economic environment. Financial analysis includes studying key indicators such as revenues, profits, distributions, P/E ratio, and debt ratio.

Additionally, reviewing market reports, economic news, and official disclosures helps investors form an objective view of the company's performance. However, consulting a licensed financial advisor remains a crucial factor in making informed investment decisions that align with financial goals and risk tolerance.

It is important to emphasize that investing in stocks involves risks, and past performance is not necessarily indicative of future results. Therefore, it is always recommended to seek specialized advice before taking any financial steps.