Salik (SALIK UH) United Arab Emirates
Industrials
Insight lifts its target price for Salik to AED11 on expectations of new toll gates and the rollout of variable pricing. The Dubai concessionaire continues to deliver strong cash generation and dividend growth, while its unique rights to future gates underline long-term potential. Sensitivity to bond yields and inflation remains a key watchpoint.
Edition: 219
- 05 September, 2025
Salik (SALIK UH) United Arab Emirates
Industrials
High efficiency, asset light, minimal capex, with high wealth & rising population, generating accelerating FCF - Salik is unique in Insight’s Global Toll Road universe as it has the right to operate all future toll gates in Dubai (vs. competitive bidding elsewhere). In Robert Crimes' updated financial model for the stock, 10 toll gates are operational and he adds 4 new value accretive toll gates in 2027-36E (AED2.8 a share). He also considers the introduction of variable pricing (from end Jan 25) as very positive, adding additional net revenues of AED170m (AED0.6 a share), substantially above management's guidance of AED60-110m. As a result, his TP increases by 45% to AED11.0 (100% upside).
Edition: 202
- 10 January, 2025
Salik (SALIK UH) United Arab Emirates
Industrials
Exclusive Dubai toll road concession connecting main economic and tourist hubs - minimal capex, high wealth and rising population to generate strong FCF. Op FCF of AED1.49bn, minus capex of only AED5m, to lead to FCF pre-dividends of AED1.44bn in 2024E. Assuming all capex is maintenance related, implies a recurring FCF yield of 5.9% in 2024E. High operating leverage given mostly fixed opex costs, thus additional traffic and inflation highly accretive to EBITDA. Robert Crimes believes SALIK is substantially undervalued by Sell Side consensus. His DDM based equity valuation of AED46.5bn & TP of AED6.21 (91% upside) implies a relatively high EV/EBITDA of 30.7x in 2024E, but this reduces to 19.4x in 2030E due to +7.7% CAGR in EBITDA in 2023-30E. IRR at current share price of 11.8%, 370bps above Insight’s Ke of 8.0%.
Edition: 171
- 13 October, 2023