Dubai: The Abu Dhabi mega-corp investment company IHC is more than just about delivering a 5,900 per cent _This is the IHC stock price gain between January 2020 and the end of June 2023) plus an increase in its stock price in the last 3 years. In 2022 alone, the stock was up a heady 160 per cent.
Or about the ADX-listed IHC stock being down 1 per cent in the year-to-date.
These are points International Holding Company’s CEO, Syed Basar Shueb, makes. Quite emphatically so.
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“The stabilization of stock prices is a natural phase for companies that have experienced substantial growth,” said Shueb, CEO.
“The global economy has undoubtedly been affected by the volatility and uncertainty prevailing. However, IHC continues exploring new investment opportunities domestically and internationally.”
In other words, shareholders and market watchers should look to more than how the IHC stock. And IHC sure has been busy through the recent past, picking up stakes across swathes of geography and global/regional/local companies.
In the UAE, the company continues to double down directly or through its array of entities, such as Alpha Dhabi and Multiply Group, among others. IHC has been consistent - and persistent - in what it has been doing.
So, how has the stock performed?
IHC’s stock is at Dh395.1, while the 52-week spread shows a low of Dh290.8 and a high of Dh410. It had, quite literally, soared into the global investor spotlight in 2020-21, with the stock putting on more than 2,000 per cent. And extended that rally - for want of a better word - all through 2022, when ADX was one of the best-performing stock markets in the world.
So far this year, the stock’s been motoring along, even catching a bit of breath.
Shueb says that’s a given in any market circumstances. The IHC stock has ‘reached a size where stabilization of price is expected’, and aligning with the trends observed among other listed companies’.
Plus, the IHC shareholder base shows the ‘prevailing presence’ of investors who are in for the long-term.
A bonafide ‘conglomerate’
A senior market analyst buys into the IHC narrative of looking beyond the current stock price. “Broadly speaking, it’s a conglomerate like Berkshire Hathaway of Warren Buffett,” said Sameer Lakhani, Managing Director at Global Capital Partners.
“Like conglomerates, IHC’s not a dividend play, its financials are transparent, and the stock has been on a tear. With a $200 billion market cap, it cannot be ignored by international players.
“And it still is one of the most - if not the most - traded stock consistently on ADX.”
Check out the other numbers too
In 2022, the IHC delivered a Dh32.6 billion net profit, building on the Dh28 billion plus from 2021. (The 2021 tally came from a 305 per cent increase over 2020, as the company started to pull in the gains from investments made during the year of the Covid and before.) Shueb is particularly cut up that not enough attention is being given to these numbers.
“Drawing comparisons between IHC’s growth trajectory and business model with that of startups would not be an appropriate approach,” he said.
Despite ‘some’ investor skepticism arising from the sort of growth IHC has had over a relatively brief period, the ‘company places great emphasis on its commitment to delivering value and contributing positively to the ADX’.
“IHC has been delivering higher RoA (return on assets) than the market average of 6.1 per cent (for a comparable peers set, including global diversified conglomerates).
“In the midst of a pandemic and economic downturn, IHC remained resilient by showcasing an impressive revenue CAGR of 243 per cent and a net profit CAGR of 301 per cent over the last three years.
“IHC also has healthy balance-sheet ratios such as a low 0.3x debt/equity ratio and a robust quick ratio of 2.2x demonstrating high liquidity, all of which support the performance on the stock exchange.
“IHC has continued to strategically invest its capital in high-yielding assets and companies and efficiently utilize its capital driving IHC’s high return on capital employed of 20 per cent as of Q1-2023.”
Numbers and rations that should be standout features for investors and other stakeholders.
The bottom-line? IHC is more than about its stock price…
