Shikun & Binui Energy (TASE:SBEN), Why Is It Drawing Fresh Attention?

Shikun & Binui Energy (TASE:SBEN) has come under fresh scrutiny after its parent group admitted to systematic bribery in Kenya, just as related entities explore large infrastructure projects in Somaliland.

For context, Shikun & Binui Energy's share price has moved to ₪4.141, with a 1-day share price return of 0.83% and a 7-day share price return of 2.50%. The 1-year total shareholder return of 57.09% and 3-year total shareholder return of 58.72% point to stronger longer term momentum than the recent 30-day and 90-day share price gains of 2.15% and 1.50% suggest, as investors now weigh reputational risk from the Kenya bribery admission against the potential upside of new infrastructure projects linked to Somaliland.

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So is this latest move in Shikun & Binui Energy simply sentiment whipsawing around bribery headlines and Somaliland headlines, or does the current price already reflect the underlying cash generation and project mix on the table?

Preferred Price-to-Sales Multiple of 11x: Is it justified?

Valuation on Shikun & Binui Energy is currently being framed around a rich P/S tag. The share price of ₪4.141 effectively bakes in a price-to-sales multiple of 11x, which is far above what peers in the Israeli construction space are trading on.

P/S compares the company's market value to its revenue. For a power and infrastructure operator that is still loss making, investors often fall back on sales as the cleaner reference point, since earnings per share are not yet a reliable anchor.

In this case, SBEN reports revenue of ₪367.294m while posting a net loss of ₪268.84m and a negative return on equity of 14.11% as losses continue. In addition, interest costs are not well covered by earnings and 100% of liabilities rely on higher risk external borrowing instead of lower risk customer deposits. That combination suggests the rich 11x P/S tag is paying up for future project economics and cash generation that are not reflected in current profitability.

The peer comparison sharpens that point. Management is asking the market to accept an 11x P/S multiple when the wider Israeli construction industry and similar peers sit on an average of 1.1x. That is a 10x premium over both sector and peer benchmarks, which is a strong signal that the stock price embeds very optimistic expectations relative to what the financials presently show.