PIF owns 44.16% of ACWA Power and the author works at SALIC, a PIF portfolio company.
The short version
ACWA Power, renamed "Acwa" in January 2026, builds, owns and runs power, water and hydrogen plants under long government contracts. Through a framework agreement with PIF, it is responsible for 70% of the Kingdom's renewable build-out to 2030.
The stock does not price a good utility. It prices a growth platform that earns high returns for a long time. At SAR 153.80 the market pays 63x trailing profit, 3.5x book and 82x the cash that projects and O&M sent to the parent in 2025 (70x on the H1-26 run-rate).
Three things the price leans on are weaker than they look.
The profit base is thinner than the headline. Development fees and one-off receipts were 58% of operating income in FY2025 and 35% in 9M-26, when operating income fell 8.8%. "Adjusted" profit removed a Noor 3 impairment but kept a SAR 423m Noor 3 settlement gain.
The rights money is already spoken for. Acwa still has about SAR 21.5bn of equity to inject, 3x the net rights proceeds. Parent net leverage reached 6.6x parent cash flow by June 2026.
The return promise got softer. The IPO prospectus targeted equity IRRs "above mid-teens". The 2025 rights prospectus says only "over the Cost of Equity by an acceptable margin". Reported ROE has been 7-10% since listing.
The other side is real too. Q3-26 net profit rose to SAR 635m from 371m, and H1-26 distributions to the parent rose 51%. Section 9 tests these and the other bull points.
Key numbers (5 Nov 2026 close, SAR 153.80)
Market cap about SAR 118bn. Book value about SAR 44 a share. Cash dividend yield 0.3%.
TTM to Sep-26: revenue SAR 8.3bn, profit to shareholders SAR 1.86bn. P/E 63x reported, 60x adjusted.
Model value per share: base SAR 57.5, upside 87.9, downside 28.0. Probability-weighted SAR 57.7, 62% below the price.
Project IRR the price needs: 23.0% on every project, old and new, with SAR 8bn a year of new equity after 2030 at a 50% probability (my assumption). If that pipeline were certain, it is 17.6%.
Several key inputs are my estimates, not company disclosures: equity in operating projects (SAR 26bn), the project IRRs, the probabilities and the cost of equity. Section 10 labels each one and shows how far the result moves. Across the cases and grids, value runs from about SAR 13 to 151, and only the most generous corner gets near the price.
This version uses the current model. It fixes how an earlier version of my model treated the platform, which lifts the base from SAR 50.5.
My view: I cannot make the price work with central inputs I can defend from the filings. That is not proof the market is wrong. A buyer at SAR 153.80 is paying for a strategic premium, a very low required return, or IRRs well above what the company now promises. This piece sets out what the price needs, so the reader can judge.
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