Salik Company
Fundamental — what it's worthbottom-up fair value
Built from a free-cash-flow DCF on a measured cost of equity, normalized earnings power, one earnings multiple (with a 100% payout, P/E and dividend yield are the same number) and a dividend-discount floor — what is it worth?
Is it cheap or expensive right now?
Latest price vs our fair value. A comparison, not a recommendation.
What it's worth — four lenses
Four independent valuation methods, blended into one weighted central fair value.
| Valuation lens | Per share (AED) | Bear – bull |
|---|---|---|
| FCFF DCF — primary | 4.49 | 2.86 – 8.15 |
| Normalized earnings | 5.44 | 4.17 – 6.67 |
| Relative — P/E (= 1 / yield) | 4.89 | 4.08 – 5.71 |
| Dividend discount — floor | 3.55 | 2.55 – 6.07 |
| Weighted central fair value | 4.62 | −19.0% vs spot |
The four lenses span AED 3.55 (the dividend a holder actually receives, the floor) to AED 5.44 (normalized through-cycle earnings). Spot at AED 5.70 sits above the central mark of every one of them. The swing factor is the discount rate, not the traffic: Salik’s measured beta was 0.47 before the war and 1.00 during it, and spot implies 0.52 — the study’s scenario panel puts a formal end to the conflict at roughly AED 6.00 and a sustained resident-departure regime break at AED 2.05. Full detail is in the study and the open model.
Technical & price structuretrend, momentum, key levels
Trend, momentum and key levels — what is the price doing now?
What the chart says
In plain terms: Salik trades about 19% above our weighted central fair value of AED 4.62 — and the gap is not the traffic. Our FY2026 earnings are within 1.4% of last year’s actual and above the first-quarter run-rate; we are modelling a recovery, not a collapse. The gap is the discount rate, and this time we measured it rather than assuming it. Regressed weekly against an equal-weighted 14-name UAE market portfolio spanning both exchanges, Salik’s beta is 0.64 (n = 195, t = 6.1) — a regression that clears every usability test. Here is the crux: that beta was 0.47 before the war and 1.00 during it. The same war that cut first-quarter chargeable trips 7.7% also doubled the risk loading in the discount rate. It attacks the numerator and the denominator at once, and at AED 5.70 the market is pricing both to reverse — spot implies a beta of 0.52, which sits inside our measured confidence interval and is almost exactly Salik’s peacetime reading. That is a coherent bet. It is also a demanding one, and on 7 July — three days before this study’s anchor — the truce was declared over, then walked back the next day. Two other things the disclosures give up if you push on them. The eight toll gates the RTA handed Salik at the 2022 IPO earn 32% on the capital paid for them; the two it sold Salik in 2024, for AED 2,734mn, earn 9.5% against an 8.1% cost of capital — so growth by acquiring gates is not free growth, and the grantor is also the vendor, the regulator and the 75.1% shareholder. And 84% of last year’s headline 35% revenue growth came from two events that happen once: the gate count going from eight to ten, and the tariff going from flat to variable. Neither repeats in 2026. What moves the price near-term is the Strait of Hormuz, the second-quarter results (the first full quarter under the war, due mid-August and landing inside our three-month window), and whether the board keeps paying out 100% of profit while owing the RTA AED 455.7mn a year until 2030.
Key levels
Volatility & where the case breaks
| Typical daily moveRoughly how far the price swings in an average day (based on a measure called ATR). Bigger means choppier. | ~1.5% |
Monte Carlo — where could the price go?near-term price paths
50,000 simulated futures — near-term price paths, independent of the fundamental value.
The 5th–95th and 25th–75th percentile bands from the 50,000-path simulation. Static and pre-computed — independent of the fundamental levers above.
The exact percentiles
The 5th / 25th / middle / 75th / 95th outcomesLine up all 50,000 outcomes low to high — these are the values at the 5%, 25%, 50%, 75% and 95% marks., from 50,000 paths.
| Timeframe | Rare low (5%) | 25% | Middle | 75% | Rare high (95%) |
|---|
What drives the odds
50,000 paths, 16 forces: the CBUAE/Fed rate path (the AED is pegged, so US policy IS UAE policy), Dubai traffic normalisation as the ceasefire holds, the resident population and visitor arrivals every revenue line scales with, the 3.9% dividend yield as a floor bid, MSCI UAE index flows against a 24.9% free float, oil at ~US$91, ancillary revenue compounding off a tiny base, and the RTA’s own congestion mandate pulling the other way — plus event forces: the Q2-2026 results (the first full quarter under the war), a Hormuz re-escalation or a formal end to it, an Executive Council tariff decision, a new toll gate (which we price as a NEGATIVE — see the study), a trim to the 100% payout to fund the RTA instalments, and a Fed/CBUAE rate cut. Details in the methodology.
Peer set & risks
Where e& sits in its markets
Salik operates every one of Dubai’s ten electronic toll gates under a 49-year exclusive concession from the Roads and Transport Authority, running to 2071. There is no second toll operator in Dubai and there cannot be one before then — the moat is a document. The only true structural comparable that exists anywhere is Parkin, the RTA’s parking concession: same emirate, same grantor, same 49-year term, same ~100% payout, same government parent. This is a competitive map, not a price table.
| Arena | Salik's position | Comparators |
|---|---|---|
| Dubai toll market share | 100% (contractual monopoly to 2071) | none — and none possible |
| P/E (on our FY26E) | ~27.9× | Parkin ~24.9×; global toll roads 18–24× |
| Dividend yield (spot) | ~3.9% (100% payout) | Parkin ~4.2%; Dubai utilities 5–6.5% |
| EBITDA margin (FY25) | 69.2% | a conventional toll road runs 50–60% |
| Free-cash conversion | ~90% of EBITDA | peers ~50–60% — they resurface their own roads; the RTA resurfaces Salik’s |
| Return on capital | 32% on the 8 IPO gates · 9.5% on the 2 the RTA sold it | vs an 8.1% cost of capital — the crux of the study |
| Net debt / EBITDA | 1.98× (Q1-26) | covenant 5.0×; Fitch A / Moody’s A3 |
The debate is not whether Salik is a good business — sixty people generate two billion dirhams of EBITDA on roads somebody else pays to build and maintain. It is what that business is worth once you notice two things. First, the 32% return on capital is a legacy of a cheap asset transfer at the 2022 IPO, not a repeatable fact: the last capital Salik deployed — AED 2,734mn for two gates in 2024 — earns 9.5%, and the vendor was the RTA, which is also the grantor, the regulator and the 75.1% shareholder. Second, the discount rate. Salik’s measured beta was 0.47 before the war and 1.00 during it, and spot implies 0.52. Competitive map, not advice.
About this series & how we build these
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Edition: 10 Jul 2026. Older editions stay in the Library.