Banque Saudi Fransi25May16
Banque Saudi Fransi
Price Data (SAR) Current Price
23.00
Target Price
25.50
52 wk High/Low
40.10/20.70
Short-term
Neutral
Long-term
Neutral
Risk Profile
Normal
Market Data Sector
Banks
Market Cap
USD 7.39bn
Primary Market
Saudi Arabia
Other Exchg Reuters
1050.SE
Bloomberg
BSFR AB Equity
Free Float
46%
BSF has underperformed its peers, declining by 15% in the past 1.5 months, while both Tadawul broader index and Saudi Bank index remained flat We maintain our estimates and target price of SAR 25.5/share, while upgrading the stock to ‘Neutral from ‘Sell’ after the correction as per our rating methodology Stock trading fairly at 1.0x-BVPS 2016, while we expect earnings pressure from higher provisioning charges, modest balance sheet growth and lower non-core earnings. Stock price movement: Since our report on Banque Saudi Fransi “BSF: Sell this rally” on 13-April 2016, the stock has corrected by 15%, compared to flat performance by Saudi Banking Index and broader Tadawul Index. Exhibit 1: BSF has considerably underperformed the index BSF
2015A
2016E
P/E x
7.0
7.2
P/BV x
1.0
0.9
15.0
13.6
95%
3.8
4.3
90%
ROE % Div Yld %
105% 100%
85%
Relative Price Performance Tadawul
Saudi Fransi
90 70
May-15 Jun-15 Jul-15 Aug-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16
50
Recommendation: After this correction, we change our recommendation to ‘Neutral’ from ‘Sell’, while maintaining our estimates and price target of SAR 25.5/share. Post correction, the stock is trading at a fair valuation of 1.0x-BVPS/7.5x-EPS 2016, for an ROE expectation of 13.6%. However we continue to see pressure on earnings from higher provisioning charges, modest balance sheet growth and lower non-core earnings.
Restated to 100
SICO Research
1m (13.9)
3m
23-May
Source: Bloomberg
110
Absolute
18-May
1,205.4
13-May
1.2
Issued Shares All in millions
28-Apr
Daily T/o (6M Avg USD)
80%
23-Apr
0.2
18-Apr
Daily Vol (6M Avg)
13-Apr
Trading Data
Performance (%)
Tadawul
110%
Valuation Ratio
GCC Equities
Bank Index
8-May
Banks
Ratings
Upgrade to 'Neutral' post correction
3-May
Company Update
May 25, 2016
12m
(2.6) (42.4)
Relative (8.1) (10.9) (8.9) Source: SICO Research, Bloomberg
Chiradeep Ghosh, CFA +973 1751 5000 ext 5058 [email protected] www.sicobahrain.com © SICO 2016 All Rights Reserved Attention is drawn to the disclaimer and other information in the end
SICO RESEARCH
Banque Saudi Fransi
Valuation Matrix Exhibit 2: Valuation Matrix M. Cap
Curr.
(USD bn)
Price
Upside
Rating
PB
PE
Div. Yld.
ROE
Target
Current
(%)
LT
ST
2015e
2016e
2015e
2016e
2016e
2015e
2016e
60
59
2%
Sell
Neutral
2.1
1.8
13.4
11.7
2.9%
16%
17%
Saudi Banks Al Rajhi
23.7
SAR
ANB
5.1
SAR
24
19
26%
Buy
Positive
0.9
0.8
6.4
6.9
5.2%
14%
12%
BSF
7.5
SAR
25.5
23
9%
Neutral
Neutral
1.0
0.9
7.0
7.2
4.5%
15%
14%
NCB
22.2
SAR
51
42
22%
Buy
Neutral
1.5
1.4
9.2
8.3
4.2%
18%
17%
Riyad
8.9
SAR
12
11
8%
Neutral
Neutral
0.9
0.9
8.3
8.9
6.3%
11%
10%
Samba
11.7
SAR
21
22
-4%
Neutral
Positive
1.1
1.0
8.4
8.0
4.1%
13%
13%
SABB
8.8
SAR
21
22
-5%
Neutral
Positive
1.2
1.1
7.6
7.7
3.9%
16%
14%
ADCB
9.2
AED
8.4
5.8
46%
Buy
Positive
1.2
1.1
6.0
6.2
7.8%
21%
18%
ENBD
12.5
AED
9.0
8.2
10%
Buy
Positive
1.1
1.0
6.9
6.8
4.9%
18%
17%
FGB
14.7
AED
12.9
11.7
10%
Neutral
Neutral
1.7
1.6
8.9
9.0
8.5%
19%
18%
NBAD
11.7
AED
9.0
8.3
8%
Sell
Negative
1.2
1.1
8.8
8.9
4.8%
15%
13%
UNB
2.6
AED
4.2
3.4
24%
Buy
Neutral
0.6
0.6
5.2
6.0
5.9%
12%
10%
CBQ
3.3
QAR
45
37
21%
Buy
Neutral
0.8
0.8
9.5
9.9
8.1%
9%
10%
Doha
2.6
QAR
42
36
18%
Buy
Neutral
1.0
0.9
7.3
7.8
7.0%
15%
14%
QIB
6.1
QAR
120
95
26%
Buy
Positive
1.7
1.6
11.5
11.0
4.7%
15%
14%
QNB
31.0
QAR
150
139
8%
Neutral
Neutral
1.6
1.4
8.6
8.3
4.0%
19%
17%
USD
0.75
0.61
23%
Buy
Positive
1.2
1.1
7.7
7.4
7.4%
16%
15%
22%
Neutral
Neutral
1.7
1.6
11.0
10.6
5.1%
14%
14%
UAE Banks
Qatari banks
Bahraini banks AUB
4.1
NBB 1.6 BHD 0.72 0.59 Source: SICO Research, Company Data, Bloomberg
Exhibit 3: Valuation Matrix; BSF is fairly priced Saudi
UAE
Qatar
Bahrain
Trendline
.
2.1
Expensive
1.9
P-BVPS-2016
1.7 1.5 1.3
1.1 0.9
BSF
0.7
Attractive
0.5
9%
11%
13%
15%
17%
19%
ROE-2016 Source: SICO Research, Bloomberg
2
SICO RESEARCH
Banque Saudi Fransi
Financials Income Statement (SAR mn)
Key Ratios (%)
2015A
2016E
2017E
Interest Income Interest Expense
4,875 (820)
5,608 (1,385)
6,044 (1,232)
Net Interest Income
4,055
4,223
4,812
NPL Coverage
Fees Income
1,328
1,475
1,569
Provisions/ Avg. Loans
Non-Interest Income
2,236
2,274
2,384
Margins
Total Revenue
6,291
6,498
7,196
(2,061)
(2,114)
(2,220)
4,230
4,383
Operating_expenses Pre-Provision Profit
Asset Quality NPL Ratio
2015A
2016E
2017E
0.9
1.2
1.3
207
171
178
(0.15)
(0.35)
(0.50)
Asset Yields
2.7
3.0
2.9
Funding Cost
0.5
0.9
0.7
4,976
NIM
2.3
2.2
2.3
Loan loss charges
(181)
(443)
(668)
Capital Adequacy (%)
Profit Before Tax
4,036
3,915
4,287
Core Tier 1 Ratio
15.0
16.4
17.1
0
0
0
Tier 1 Ratio
15.0
16.4
17.1
4,036
3,915
4,287
CAR
17.2
18.7
19.2
0
0
0
186,855
186,049
196,254
Net Income
4,036
3,915
4,287
Liquidity Ratios (%)
Core Income
1,938
1,938
1,938
Liquid Assets/ Total Assets
34
Zakat Profit After Tax Minority Interest
Total RWA (LCY mn)
30
34
Wholesale funding/ Total Assets
4
3
3
Loans and Advances to Deposit
87
89
90
Loans/Assets
67
63
63
Balance Sheet (SAR mn)
2015A
2016E
2017E
Income statement ratio %
Cash & cash equivalent Interbank
9,768 16,303
23,817 17,118
24,903 17,974
Fees Income/ Total Revenue
21.1
22.7
21.8
Cost to Income Ratio
32.8
32.5
30.9
Investments
28,321
29,737
31,224
123,443
129,984
137,413
106
114
122
Du Pont Analysis (%)
0
0
0
691
719
748
Net Loans Investment in associates Intangible assets Fixed Assets Other Assets
2015A
2016E
2017E
Net Interest Income Fee Income
2.2 0.7
2.2 0.8
2.3 0.7 0.4
5,092
5,295
5,507
Other non-Int Income
0.5
0.4
Total Assets
183,724
206,784
217,891
Total Revenue
3.4
3.3
3.4
Total deposits
141,751
146,004
151,844
Staff Expense
(0.7)
(0.6)
(0.6)
Due to Interbank
1,557
17,404
19,322
Other Overhead Expenses
(0.4)
(0.4)
(0.4)
Debt Securities
6,713
6,713
6,713
Operating Expense
(1.1)
(1.1)
(1.0)
Other liabilities
6,219
6,530
6,857
Pre-provisioning Profit
2.3
2.2
2.3
156,240
176,651
184,736
Loan loss provisioning
(0.1)
(0.2)
(0.3)
Others
0.0
0.0
0.0
Zakat & Minority Interest
0.0
0.0
0.0
ROA
2.2
2.0
2.0
Equity/Assets
14.5
14.8
14.9
15.0
13.6
13.6
Total liabilities Minority Interest Total Equity Total Equity & Liabilities
0
0
0
27,484
30,133
33,155
183,724
206,784
217,891
Valuation (Per Share) EPS
3.3
3.2
3.6
ROE
DPS
1.1
1.1
1.1
Source: Company, SICO Research, Bloomberg
BPS
22.8
25.0
27.5
3
SICO RESEARCH
Banque Saudi Fransi
Price, Target Price and Rating Change History Chart of (BSFR AB) 45.0 N
40.0 35.0
N N
Feb-16
Nov-15
Aug-15
Feb-15
May-15
NN
Nov-14
Feb-14
Closing Price Rating
May-14
Aug-13
20.0
May-13
N N N NN N
S
NN N N N
Nov-13
25.0
A
May-16
NN N
Aug-14
30.0
Feb-13
N N N A N N N N N N N N N N N N N N N N A N S N
Nov-12
Rating Initiation
Aug-12
Target Price 28.8 29.3 29.3 29.3 27.0 27.0 24.8 24.8 24.8 24.8 24.8 24.8 24.8 24.8 27.0 27.0 27.0 31.5 36.0 39.0 33.0 24.0 25.5 25.5
Feb-12
4-Apr-12 15-Apr-12 24-Apr-12 28-Jun-12 12-Jul-12 8-Oct-12 22-Oct-12 15-Jan-13 1-Apr-13 2-Apr-13 15-Apr-13 12-May-13 1-Jul-13 3-Jul-13 1-Sep-13 11-Nov-13 29-Jan-14 3-Apr-14 22-Jul-14 19-May-15 2-Dec-15 21-Feb-16 12-Apr-16 24-May-16
Closing Price 29.5 28.7 29.0 24.7 24.8 23.3 22.0 22.8 22.9 23.2 22.2 22.0 24.7 25.3 25.9 25.3 25.4 30.7 33.7 40.4 27.7 22.4 27.0 23.0
May-12
Date
Target Price Initiation
B=Buy, A=Add, N=Neutral, R=Reduce, S=Sell, U/R = Under Review
Securities & Investment Company BSC Analyst Stock Rating Definitions Time horizon Short term
SICO Research issues a Short term outlook if the analyst feels that there are factors which might affect the short-term performance of the stock during the immediate six months after issuing a rating. This might be due to both quantitative and qualitative factors which the analyst think can affect the price Performance in the short- term. Short term outlook can be different from the long term rating and the estimated up side or down side from the current price based on the Target Price estimate for the company SICO Research’s Long-term rating is based on the Target Price target price (given below) calculated by the Long term analyst. The Target Price is arrived at using both fundamental and comparative valuation methods based on the detailed Financial models developed by analysts incorporating current expectations and analyst's assumptions. Target price for a stock is calculated one year forward from the valuation date Recommendation (Short term) Positive Analyst expect positive triggers in the short term which might affect current price positively (> 10%) Neutral Analyst does not expect any short term triggers/events (+/- 10%) Negative Analyst expect negative triggers in the short term which might affect current price adversely (< 10%) Recommendation (Long term) Buy If Risk profile is “High” Target price estimate offers 20%+ return from the current share price. If Risk profile is “Normal” Target price estimate offers 15%+ return from the current share price. Neutral If Risk profile is “High” Target Price estimate offers 0% to 20% return from the current share price. If Risk profile is “Normal” Target Price estimate offers 5% to 15% return from the current share price Sell If Risk profile is “High” Target price estimate offers less than 0% return from the current share price. If Risk profile is “Normal” Target price estimate offers less than 5% return from the current share price. Risk High Stock volatility (360 days standard deviation) exceeds 2x of S&P GCC market volatility
4
SICO RESEARCH
Banque Saudi Fransi
NOTES Contact Details BMB Centre, 1 Floor P.O Box 1331, Diplomatic Area Manama Kingdom of Bahrain st
Investment Research [email protected]
Head of Research Nishit Lakhotia, CFA, CAIA Tel: (Direct) +973 – 17515021
Brokerage Fadhel Makhlooq Tel: (Direct): +973 – 17515202
Visit us at www.sicobahrain.com
Disclaimer This report does not constitute or form part of, and should not be construed as, any offer for sale or subscription of, or any invitation to offer to buy or subscribe for any securities. The information and opinions contained in this report have been compiled or arrived at from sources believed to be reliable and in good faith, but no representation or warranty, express or implied, is made as to their accuracy, completeness or correctness and are subject to change without notice. Investors must make their own investment decisions. Past performance is not necessarily a guide to future performance. Nothing in this report should be construed as investment or financial advice or as an advice to buy or sell the securities of the company referred to in this report. SICO and/or its clients may have positions in or options on the securities mentioned in this report or any related investments, may affect transactions or may buy, sell or offer to buy or sell such securities or any related investments. The analyst(s) who is (are) responsible for producing the report certifies(y) that he (she) or any of their close relative have no beneficial ownership in the company’s stock at the time of publishing the report. Any other views or forecasts expressed herein accurately reflect their personal view(s) and that no part of their compensation was, is or will be directly or indirectly related to the specific recommendation(s) or views contained in this research report. Additional information on the contents of this report is available on request. Among stocks under our coverage, Ahli United Bank and National Bank of Bahrain owns 11.9% and 12.5% respectively in SICO. SICO does market making in Aluminum Bahrain (ALBA) and Zain Bahrain’s shares.
Copyright Notice © Securities and Investment Company 2016. This report is being supplied to the recipient for information and not for circulation and may not be reproduced, redistributed or passed on to any other person or published, in whole or in part.
5
Price Data (SAR) Current Price
23.00
Target Price
25.50
52 wk High/Low
40.10/20.70
Short-term
Neutral
Long-term
Neutral
Risk Profile
Normal
Market Data Sector
Banks
Market Cap
USD 7.39bn
Primary Market
Saudi Arabia
Other Exchg Reuters
1050.SE
Bloomberg
BSFR AB Equity
Free Float
46%
BSF has underperformed its peers, declining by 15% in the past 1.5 months, while both Tadawul broader index and Saudi Bank index remained flat We maintain our estimates and target price of SAR 25.5/share, while upgrading the stock to ‘Neutral from ‘Sell’ after the correction as per our rating methodology Stock trading fairly at 1.0x-BVPS 2016, while we expect earnings pressure from higher provisioning charges, modest balance sheet growth and lower non-core earnings. Stock price movement: Since our report on Banque Saudi Fransi “BSF: Sell this rally” on 13-April 2016, the stock has corrected by 15%, compared to flat performance by Saudi Banking Index and broader Tadawul Index. Exhibit 1: BSF has considerably underperformed the index BSF
2015A
2016E
P/E x
7.0
7.2
P/BV x
1.0
0.9
15.0
13.6
95%
3.8
4.3
90%
ROE % Div Yld %
105% 100%
85%
Relative Price Performance Tadawul
Saudi Fransi
90 70
May-15 Jun-15 Jul-15 Aug-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16
50
Recommendation: After this correction, we change our recommendation to ‘Neutral’ from ‘Sell’, while maintaining our estimates and price target of SAR 25.5/share. Post correction, the stock is trading at a fair valuation of 1.0x-BVPS/7.5x-EPS 2016, for an ROE expectation of 13.6%. However we continue to see pressure on earnings from higher provisioning charges, modest balance sheet growth and lower non-core earnings.
Restated to 100
SICO Research
1m (13.9)
3m
23-May
Source: Bloomberg
110
Absolute
18-May
1,205.4
13-May
1.2
Issued Shares All in millions
28-Apr
Daily T/o (6M Avg USD)
80%
23-Apr
0.2
18-Apr
Daily Vol (6M Avg)
13-Apr
Trading Data
Performance (%)
Tadawul
110%
Valuation Ratio
GCC Equities
Bank Index
8-May
Banks
Ratings
Upgrade to 'Neutral' post correction
3-May
Company Update
May 25, 2016
12m
(2.6) (42.4)
Relative (8.1) (10.9) (8.9) Source: SICO Research, Bloomberg
Chiradeep Ghosh, CFA +973 1751 5000 ext 5058 [email protected] www.sicobahrain.com © SICO 2016 All Rights Reserved Attention is drawn to the disclaimer and other information in the end
SICO RESEARCH
Banque Saudi Fransi
Valuation Matrix Exhibit 2: Valuation Matrix M. Cap
Curr.
(USD bn)
Price
Upside
Rating
PB
PE
Div. Yld.
ROE
Target
Current
(%)
LT
ST
2015e
2016e
2015e
2016e
2016e
2015e
2016e
60
59
2%
Sell
Neutral
2.1
1.8
13.4
11.7
2.9%
16%
17%
Saudi Banks Al Rajhi
23.7
SAR
ANB
5.1
SAR
24
19
26%
Buy
Positive
0.9
0.8
6.4
6.9
5.2%
14%
12%
BSF
7.5
SAR
25.5
23
9%
Neutral
Neutral
1.0
0.9
7.0
7.2
4.5%
15%
14%
NCB
22.2
SAR
51
42
22%
Buy
Neutral
1.5
1.4
9.2
8.3
4.2%
18%
17%
Riyad
8.9
SAR
12
11
8%
Neutral
Neutral
0.9
0.9
8.3
8.9
6.3%
11%
10%
Samba
11.7
SAR
21
22
-4%
Neutral
Positive
1.1
1.0
8.4
8.0
4.1%
13%
13%
SABB
8.8
SAR
21
22
-5%
Neutral
Positive
1.2
1.1
7.6
7.7
3.9%
16%
14%
ADCB
9.2
AED
8.4
5.8
46%
Buy
Positive
1.2
1.1
6.0
6.2
7.8%
21%
18%
ENBD
12.5
AED
9.0
8.2
10%
Buy
Positive
1.1
1.0
6.9
6.8
4.9%
18%
17%
FGB
14.7
AED
12.9
11.7
10%
Neutral
Neutral
1.7
1.6
8.9
9.0
8.5%
19%
18%
NBAD
11.7
AED
9.0
8.3
8%
Sell
Negative
1.2
1.1
8.8
8.9
4.8%
15%
13%
UNB
2.6
AED
4.2
3.4
24%
Buy
Neutral
0.6
0.6
5.2
6.0
5.9%
12%
10%
CBQ
3.3
QAR
45
37
21%
Buy
Neutral
0.8
0.8
9.5
9.9
8.1%
9%
10%
Doha
2.6
QAR
42
36
18%
Buy
Neutral
1.0
0.9
7.3
7.8
7.0%
15%
14%
QIB
6.1
QAR
120
95
26%
Buy
Positive
1.7
1.6
11.5
11.0
4.7%
15%
14%
QNB
31.0
QAR
150
139
8%
Neutral
Neutral
1.6
1.4
8.6
8.3
4.0%
19%
17%
USD
0.75
0.61
23%
Buy
Positive
1.2
1.1
7.7
7.4
7.4%
16%
15%
22%
Neutral
Neutral
1.7
1.6
11.0
10.6
5.1%
14%
14%
UAE Banks
Qatari banks
Bahraini banks AUB
4.1
NBB 1.6 BHD 0.72 0.59 Source: SICO Research, Company Data, Bloomberg
Exhibit 3: Valuation Matrix; BSF is fairly priced Saudi
UAE
Qatar
Bahrain
Trendline
.
2.1
Expensive
1.9
P-BVPS-2016
1.7 1.5 1.3
1.1 0.9
BSF
0.7
Attractive
0.5
9%
11%
13%
15%
17%
19%
ROE-2016 Source: SICO Research, Bloomberg
2
SICO RESEARCH
Banque Saudi Fransi
Financials Income Statement (SAR mn)
Key Ratios (%)
2015A
2016E
2017E
Interest Income Interest Expense
4,875 (820)
5,608 (1,385)
6,044 (1,232)
Net Interest Income
4,055
4,223
4,812
NPL Coverage
Fees Income
1,328
1,475
1,569
Provisions/ Avg. Loans
Non-Interest Income
2,236
2,274
2,384
Margins
Total Revenue
6,291
6,498
7,196
(2,061)
(2,114)
(2,220)
4,230
4,383
Operating_expenses Pre-Provision Profit
Asset Quality NPL Ratio
2015A
2016E
2017E
0.9
1.2
1.3
207
171
178
(0.15)
(0.35)
(0.50)
Asset Yields
2.7
3.0
2.9
Funding Cost
0.5
0.9
0.7
4,976
NIM
2.3
2.2
2.3
Loan loss charges
(181)
(443)
(668)
Capital Adequacy (%)
Profit Before Tax
4,036
3,915
4,287
Core Tier 1 Ratio
15.0
16.4
17.1
0
0
0
Tier 1 Ratio
15.0
16.4
17.1
4,036
3,915
4,287
CAR
17.2
18.7
19.2
0
0
0
186,855
186,049
196,254
Net Income
4,036
3,915
4,287
Liquidity Ratios (%)
Core Income
1,938
1,938
1,938
Liquid Assets/ Total Assets
34
Zakat Profit After Tax Minority Interest
Total RWA (LCY mn)
30
34
Wholesale funding/ Total Assets
4
3
3
Loans and Advances to Deposit
87
89
90
Loans/Assets
67
63
63
Balance Sheet (SAR mn)
2015A
2016E
2017E
Income statement ratio %
Cash & cash equivalent Interbank
9,768 16,303
23,817 17,118
24,903 17,974
Fees Income/ Total Revenue
21.1
22.7
21.8
Cost to Income Ratio
32.8
32.5
30.9
Investments
28,321
29,737
31,224
123,443
129,984
137,413
106
114
122
Du Pont Analysis (%)
0
0
0
691
719
748
Net Loans Investment in associates Intangible assets Fixed Assets Other Assets
2015A
2016E
2017E
Net Interest Income Fee Income
2.2 0.7
2.2 0.8
2.3 0.7 0.4
5,092
5,295
5,507
Other non-Int Income
0.5
0.4
Total Assets
183,724
206,784
217,891
Total Revenue
3.4
3.3
3.4
Total deposits
141,751
146,004
151,844
Staff Expense
(0.7)
(0.6)
(0.6)
Due to Interbank
1,557
17,404
19,322
Other Overhead Expenses
(0.4)
(0.4)
(0.4)
Debt Securities
6,713
6,713
6,713
Operating Expense
(1.1)
(1.1)
(1.0)
Other liabilities
6,219
6,530
6,857
Pre-provisioning Profit
2.3
2.2
2.3
156,240
176,651
184,736
Loan loss provisioning
(0.1)
(0.2)
(0.3)
Others
0.0
0.0
0.0
Zakat & Minority Interest
0.0
0.0
0.0
ROA
2.2
2.0
2.0
Equity/Assets
14.5
14.8
14.9
15.0
13.6
13.6
Total liabilities Minority Interest Total Equity Total Equity & Liabilities
0
0
0
27,484
30,133
33,155
183,724
206,784
217,891
Valuation (Per Share) EPS
3.3
3.2
3.6
ROE
DPS
1.1
1.1
1.1
Source: Company, SICO Research, Bloomberg
BPS
22.8
25.0
27.5
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SICO RESEARCH
Banque Saudi Fransi
Price, Target Price and Rating Change History Chart of (BSFR AB) 45.0 N
40.0 35.0
N N
Feb-16
Nov-15
Aug-15
Feb-15
May-15
NN
Nov-14
Feb-14
Closing Price Rating
May-14
Aug-13
20.0
May-13
N N N NN N
S
NN N N N
Nov-13
25.0
A
May-16
NN N
Aug-14
30.0
Feb-13
N N N A N N N N N N N N N N N N N N N N A N S N
Nov-12
Rating Initiation
Aug-12
Target Price 28.8 29.3 29.3 29.3 27.0 27.0 24.8 24.8 24.8 24.8 24.8 24.8 24.8 24.8 27.0 27.0 27.0 31.5 36.0 39.0 33.0 24.0 25.5 25.5
Feb-12
4-Apr-12 15-Apr-12 24-Apr-12 28-Jun-12 12-Jul-12 8-Oct-12 22-Oct-12 15-Jan-13 1-Apr-13 2-Apr-13 15-Apr-13 12-May-13 1-Jul-13 3-Jul-13 1-Sep-13 11-Nov-13 29-Jan-14 3-Apr-14 22-Jul-14 19-May-15 2-Dec-15 21-Feb-16 12-Apr-16 24-May-16
Closing Price 29.5 28.7 29.0 24.7 24.8 23.3 22.0 22.8 22.9 23.2 22.2 22.0 24.7 25.3 25.9 25.3 25.4 30.7 33.7 40.4 27.7 22.4 27.0 23.0
May-12
Date
Target Price Initiation
B=Buy, A=Add, N=Neutral, R=Reduce, S=Sell, U/R = Under Review
Securities & Investment Company BSC Analyst Stock Rating Definitions Time horizon Short term
SICO Research issues a Short term outlook if the analyst feels that there are factors which might affect the short-term performance of the stock during the immediate six months after issuing a rating. This might be due to both quantitative and qualitative factors which the analyst think can affect the price Performance in the short- term. Short term outlook can be different from the long term rating and the estimated up side or down side from the current price based on the Target Price estimate for the company SICO Research’s Long-term rating is based on the Target Price target price (given below) calculated by the Long term analyst. The Target Price is arrived at using both fundamental and comparative valuation methods based on the detailed Financial models developed by analysts incorporating current expectations and analyst's assumptions. Target price for a stock is calculated one year forward from the valuation date Recommendation (Short term) Positive Analyst expect positive triggers in the short term which might affect current price positively (> 10%) Neutral Analyst does not expect any short term triggers/events (+/- 10%) Negative Analyst expect negative triggers in the short term which might affect current price adversely (< 10%) Recommendation (Long term) Buy If Risk profile is “High” Target price estimate offers 20%+ return from the current share price. If Risk profile is “Normal” Target price estimate offers 15%+ return from the current share price. Neutral If Risk profile is “High” Target Price estimate offers 0% to 20% return from the current share price. If Risk profile is “Normal” Target Price estimate offers 5% to 15% return from the current share price Sell If Risk profile is “High” Target price estimate offers less than 0% return from the current share price. If Risk profile is “Normal” Target price estimate offers less than 5% return from the current share price. Risk High Stock volatility (360 days standard deviation) exceeds 2x of S&P GCC market volatility
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SICO RESEARCH
Banque Saudi Fransi
NOTES Contact Details BMB Centre, 1 Floor P.O Box 1331, Diplomatic Area Manama Kingdom of Bahrain st
Investment Research [email protected]
Head of Research Nishit Lakhotia, CFA, CAIA Tel: (Direct) +973 – 17515021
Brokerage Fadhel Makhlooq Tel: (Direct): +973 – 17515202
Visit us at www.sicobahrain.com
Disclaimer This report does not constitute or form part of, and should not be construed as, any offer for sale or subscription of, or any invitation to offer to buy or subscribe for any securities. The information and opinions contained in this report have been compiled or arrived at from sources believed to be reliable and in good faith, but no representation or warranty, express or implied, is made as to their accuracy, completeness or correctness and are subject to change without notice. Investors must make their own investment decisions. Past performance is not necessarily a guide to future performance. Nothing in this report should be construed as investment or financial advice or as an advice to buy or sell the securities of the company referred to in this report. SICO and/or its clients may have positions in or options on the securities mentioned in this report or any related investments, may affect transactions or may buy, sell or offer to buy or sell such securities or any related investments. The analyst(s) who is (are) responsible for producing the report certifies(y) that he (she) or any of their close relative have no beneficial ownership in the company’s stock at the time of publishing the report. Any other views or forecasts expressed herein accurately reflect their personal view(s) and that no part of their compensation was, is or will be directly or indirectly related to the specific recommendation(s) or views contained in this research report. Additional information on the contents of this report is available on request. Among stocks under our coverage, Ahli United Bank and National Bank of Bahrain owns 11.9% and 12.5% respectively in SICO. SICO does market making in Aluminum Bahrain (ALBA) and Zain Bahrain’s shares.
Copyright Notice © Securities and Investment Company 2016. This report is being supplied to the recipient for information and not for circulation and may not be reproduced, redistributed or passed on to any other person or published, in whole or in part.
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