Beyout Holding Company (K.P.S.C)

The thesis on Beyout is materially challenged in the near term due to severe margin compression stemming from a sharp drawdown in high-margin U.S. government (USG) defense contracts. While H1 2026 revenue was flat (+1.3% YoY to KWD 42.8M), net profit plummeted 31.3% YoY to KWD 4.0M, missing margin expectations as gross margin contracted 640 bps to 20.3%. The business is decelerating in earnings power: USG business (previously 25–30% of revenue) was downsized to ~20% of its historical size following base evacuations. Although regional expansion (KSA, UAE) is accelerating and offsetting top-line losses, these replacement contracts carry structurally lower margins, creating an earnings air pocket until real estate mega-projects come online in 2027/2028.