Chapter 3

The Apex Stake

Three-quarters of Ghitha's book value is one associate stake, so it largely determines whether the discount to book is a margin of safety. The AED 4,141.6m carried for associates sits AED 2,761.7m above their underlying net assets — a premium set by marking the Apex holding to its quoted price in January 2024. A March 2026 disposal at that quote valued the stake near 1.7x its carried amount: the book looks conservatively struck, but it rests on one richly-valued ADX quote rather than on the food business.

Where the book value sits

Ghitha's balance sheet does not look like a food company's. Of AED 5,454.4m equity attributable to owners, AED 4,141.6m — 76% — is a single line: investment in associates [1]. The operating assets a reader would expect to underpin the book — property, plant and equipment of AED 2,159.5m — are real, but they are largely financed by liabilities and non-controlling interests; the equity that public shareholders own is dominated by the associate stake [2].

Source: FY2025 Annual Report, Consolidated Statement of Financial Position [3].

The associate line is chiefly one entity: Apex Investment PSC, an Abu Dhabi holding company listed on the ADX (ticker APEX, formerly Ras Al Khaimah Cement, renamed in 2022). Ghitha held 48.5% at the year-end, alongside two much smaller associates — Invictus Investment Company PLC (22.32%) and Anina Culinary Art (45%) [4]. The stake became an associate on 30 January 2024, when Ghitha sold 3% of Apex, lost majority board control, and moved the holding off the consolidated accounts and onto the equity method (the event that produced the FY2024 headline gain covered in Scale and Book Value) [5].

What the AED 4.14bn is made of

The filing quietly discloses how little of the carrying value is backed by the associates' own net assets. Ghitha's share of the associates' net assets is AED 1,379.8m; the amount carried on the balance sheet is AED 4,141.6m [6]. The AED 2,761.7m gap is goodwill and intangibles embedded inside the equity-method line — value that exists only if Apex's earning power and market price justify a premium of roughly three times its underlying book.

Source: FY2025 Annual Report, Note 16 — Group's share of net assets vs carrying amount [7].

That premium was struck once, in January 2024, and has barely moved since. When Ghitha lost control, it recorded the retained 48.5% at AED 3,446.9m — a figure calculated "with reference to the quoted price of the shares of Apex on the date of disposal" [8]. Under the equity method the carrying value is not remarked to Apex's live share price afterwards; it moves only by Ghitha's share of associate profit, less dividends. So the balance rose from AED 4,098.7m at the end of 2024 to AED 4,141.6m at end-2025 — a drift of AED 42.9m against a AED 4.1bn base [9].

Source: FY2025 Annual Report, Notes 16 and 6.7 [10] [11].

The practical consequence: the reported book neither confirms nor denies that Apex is still worth AED 4.1bn. The number is anchored to a January-2024 quote and then carried forward on accrual accounting. Ghitha does not disclose the year-end market value of the listed stake in its annual report, so between transactions an investor cannot see the mark move.

The market test

One transaction does surface the market price. In March 2026 Ghitha disposed of 1.7% of Apex "at the prevailing market value," reducing its holding to 46.8%. The 1.7% slice carried at AED 119.4m; the consideration, set by reference to Apex's quoted price, was AED 204.8m — a 71% premium to carrying value, booked as an AED 85.4m gain [12].

Scaled up, that price implies Apex is worth roughly AED 12.0bn in whole, and the retained 46.8% about AED 5.6bn — against the AED 3.3bn at which the stake is carried. On the only observable market price, the Apex holding carries at about 0.6x its value: a surplus of roughly AED 2.3bn sits outside the AED 5,454.4m book.

Source: carrying value derived from the FY2025 Note 16 balance and the March-2026 disposal ratio; market value from the H1 FY2026 disposal at Apex's quoted price [13].

Marking the stake to that price lifts look-through equity from the reported AED 22.58 a share (AED 5,454.4m over 241.6m shares) to roughly AED 32 a share. Against a share price near AED 11.30, the stock trades at about 0.35x a look-through net asset value — a deeper discount than the ~0.5x reported book established in Scale and Book Value.

Source: derived from FY2025 owners' equity and share count [14] and the March-2026 Apex sale price [15].

For an investor buying assets below a high net asset value, this is the constructive read: the dominant asset is a listed security carried below its last observable market price, not a management estimate that could be quietly written down.

What makes the mark fragile

The same facts carry the counter-case, and it is not small. The whole margin of safety is a bet on one ADX quote, and that quote is demanding. At an implied AED 12.0bn, Apex trades at about 46x its AED 262.8m associate-level profit and 3.3x its own AED 3,624.0m equity [16]. Apex sits in the same Abu Dhabi ownership orbit as Ghitha — the IHC / Two Point Zero group — where listed vehicles carry elevated multiples on thin free floats. A quote struck in that setting can move a long way without a change in the underlying business, and Ghitha's book would follow it in only one direction quickly: down, through an impairment test, since the equity method does not carry unrealised gains.

Three further frictions sit between the mark and a minority shareholder:

The value that has been realised was not paid to public holders. The March-2026 disposal settled loans from related parties, not an open-market sale for cash — Apex shares were transferred to extinguish AED 205.0m of related-party borrowings [17], [18].

Ghitha holds influence, not control — 46.8% and two of Apex's five board seats [19]. It cannot compel a sale or a distribution.

The cash the stake actually yields is trivial. Dividends received from all associates were AED 7.4m in FY2025 against a AED 49.3m equity-accounted share of profit [20]. Most of the reported "earnings" from Apex are not collectible in cash without selling shares.

The stake's value is therefore real on paper and, so far, has been converted at that value — but through the parent-directed machinery of related-party settlement rather than into cash for the float.

The rest of the soft book

Beyond Apex, the assets that carry above their tangible substance are modest and conventional. Goodwill and other intangibles total AED 611.4m — including AED 256.7m of goodwill and AED 224.3m of customer relationships, most of it added through FY2025 acquisitions [21]. Management ran its annual discounted-cash-flow impairment review in Q4 2025 and concluded recoverable amounts exceeded carrying values, so no impairment was taken [22]. Biological assets — dairy cows, camels and poultry — are carried at AED 235.2m and fair-valued each period, a genuine but small operating asset [23].

The one associate that has been tested against a real exit was written down. When Ghitha moved to sell Anina Culinary Art in H1 2026, it measured the holding at fair value less costs to sell and booked a AED 25.9m impairment [24]. Anina is tiny relative to Apex, but it shows the direction impairment runs when an equity-method holding meets a disposal test — a reminder that a carrying value is only as firm as the exit that eventually confirms it.

What would change the read

The margin of safety here is asset-based and quote-dependent, so the facts that would move it are specific and checkable:

• Apex's ADX share price. A sustained fall below the equity-method carrying value (roughly AED 3.3bn for 46.8%, about AED 70m of carrying value per 1% held) would force an impairment test and could turn the hidden surplus into a hidden shortfall. This is the single line most worth tracking.
• A cash, third-party sale of Apex shares. Any disposal to an unrelated buyer for cash — rather than related-party loan settlement — would validate the mark and route value to the balance sheet the float owns.
• A year-end fair-value disclosure of the listed stake. Its continued absence leaves shareholders reliant on occasional transactions to see the mark; its appearance would close the gap.
• Goodwill and customer-relationship impairments at the next annual review, which would signal that the FY2025 acquisitions are underperforming the cash flows used to justify them.

On the evidence, the book is struck conservatively against the only market price available, and the discount to a look-through NAV is real. The claim it rests on is narrow: that one richly-valued, thinly-floated ADX security in the parent's own orbit is worth what it last traded at, and that a minority holder can eventually see that value in cash rather than in the parent's deleveraging.