RIYADH – Saudi Telecom Co. (STC) stock's 12-month target price is set at SR54.8, yielding a potential upside of 36.9 percent, based on its strong financial performance for the 2012 fiscal year, spurred by the company's focus on development in the local market, especially in broadband services, a report commissioned by Aljazira Capital said Tuesday. The report pointed out the company's operational efficiency and expansion policy provides an opportunity to capture added value in the long run. The report estimated the dividend at SR2 per share by the end of the 2012 fiscal year, resulting in a dividend yield of about 5 percent, compared to the current price per share. According to the report, STC's commitment to employing the latest technologies such as fiber optics will enhance the company's competitiveness in broadband, and consequently increase revenues from wireless broadband data exchange services by 88 percent during the second quarter of 2012, compared to the same period from last year. The report added that the growth of services in the data sharing sector will continue to be the main factor in the development of STC's operations in the mid and long runs, taking into consideration the company's continuous efforts to introduce innovative solutions, which resulted in increasing the number of its customers by more than 200 percent. The report also predicted that STC will continue to post revenues from its international operations, referring to the growth in the company's international revenue by 57 percent in Q2 2012, compared to the same period from last year, as result of a larger customer base, and expansion of the company's networks in Indonesia and South Africa, in addition to successful operations of its regional subsidiaries like Viva Kuwait and Viva Bahrain. – SG
