Cement Dispatches for December 2017 - Aljazira Capital
Cement Dispatches for December 2017 January 2018 Saudi Cement Sector | Monthly Report | December 2017
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Cement dispatches: Cement dispatches for the month of December-2017 stood at 4.1mn tons, compared to 4.4mn tons in December-2016, depicting a decline of 6.59%YoY, and an increase of 7.4%MoM. Clinker inventory continued to increase and stood at 35.63mn ton, depicting an increase of 26.7%YoY and 0.11%MoM. For 12M-2017, cement dispatches stood at 47.23mn ton compared to 55.65mn ton in 12M-2016, depicting a decline of 15.13%YoY. Change in Cement Dispatches
Source: Yamama Cement, AlJazira Capital
5,000
Change %(RHS)
Dispatches (1000 Ton)(LHS)
80%
4,500
60%
4,000
40%
3,500
20%
Cement dispatches increased by 7.4%MoM, standing at 4.1MT compared to 3.8MT in November 2017.
0%
3,000
Utilization Rate (TTM)
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Feb-17
Jun-17
-60%
May-17
1,500
Apr-17
-40%
Mar-17
2,000
Jan-17
-20%
Dec-16
2,500
Source: Yamama Cement, AlJazira Capital
85.0%
The total Utilization rate of
72.8%
70.0%
to 71.4%
69.2%
69.4%
66.6%
in
December
2017 compared to 79.0% in 68.7%
68.1%
67.6%
Oct-17
74.3%
Sep-17
75.0%
Saudi cement sector declined 75.6%
Aug-17
77.6%
Jul-17
79.0%
Jun-17
80.0%
67.0% 66.6%
December 2016.
65.0%
Change in Clinker Inventories
Dec-17
Nov-17
May-17
Apr-17
Mar-17
Feb-17
Jan-17
55.0%
Dec-16
60.0%
Source: Yamama Cement, AlJazira Capital
36,500
10% 8% 6%
31,000
4% 2% 25,500
0%
Clinker Inventories showed a modest increase of 0.11%MoM and stood at 35.62MT compared to 35.59MT in November 2017.
1
Dec-17
Nov-17
Change %(RHS)
Oct-17
Sep-17
Jul-17
Aug-17
Total Invetories (1000 Ton)(LHS)
Jun-17
May-17
Apr-17
Mar-17
Feb-17
Jan-17
20,000
Dec-16
-2% -4%
Analyst
Waleed Al-jubayr +966 11 2256146 [email protected]
© All rights reserved
Cement Dispatches for December 2017 January 2018 Saudi Cement Sector | Monthly Report | December 2017
Cement Dispatches for December 2017
Please read Disclaimer on the back
Source: Yamama Cement , AlJazira Capital 43.0%
700 600 500 400 200
0.0%
4,500
-10.0% -20.0%
3,000
-30.0%
1,500
Sales / Production for 2017
Hail
Tabuk
Northern
AlJouf
Umm AlQura
YoY Change (%) -RHS
United Cement
AlSafwa
Najran
Eastern
Riyadh
City
Arabian
Qassim
Yamamah
Saudi
Yanbu
-40.0%
Southern
Riyadh of
cement
with
25.1%YoY
and
Source: Yamama Cement , AlJazira Capital
6,000
-50.0%
For 2017, city cement was the only company to show growth (8.7%YoY). While Najran cement and Northern cement showed a decline of 39.0%YoY and 38.2%YoY respectively.
Source: Yamama Cement , AlJazira Capital
Riyadh cement and City
140.0%
cement showed the highest
120.0%
cement
100.0%
sales
/
clinker
production ratio of 128.8%
80.0%
and
60.0%
On the other hand, Hail Hail
Umm AlQura
Northern
AlSafwa
Eastern
Tabuk
Southern
Yanbu
Arabian
AlJouf
Yamamah
Saudi
Qassim
Najran
City
United Cement
Sales / Production
Clinker Inventories
respectively.
170.0% 140.0%
4500
110.0%
3750
80.0%
3000
50.0%
2250
20.0%
1500
-10.0%
© All rights reserved
United Cement
AlSafwa
City
Arabian
AlJouf
Riyadh
Northern
Tabuk
YoY Change (%) -RHS
Umm AlQura
Dec-17- LHS
Qassim
Hail
Eastern
Southern
Najran
Yanbu
Yamamah
Saudi
750
Dec-16- LHS
cement showed a cement sales/
clinker
production
ratio of 54.9% and 70.1% respectively.
Source: Yamama Cement , AlJazira Capital
5250
0
116.7%
cement and Umm AlQura Riyadh
40.0%
2
declined the most by 44.4%YoY,
25.0%YoY, respectively.
10.0%
2017-LHS
and
18.1%YoY. While Yanbu cement
decline
20.0%
2016- LHS
Qassim
an increase of 21.4%YoY and
and
7,500
0
by
Tabuk cement which showed
followed by Yamamah cement
YoY Change (%) -RHS
Cement Dispatches for 2017
the
followed
-57.0%
Hail
Northern
Tabuk
Umm AlQura
AlJouf
AlSafwa
Riyadh
Dec-17 - LHS
United Cement
Dec-16 - LHS
Najran
Eastern
Arabian
Yamamah
City
Qassim
Yanbu
Saudi
Southern
0
showed
3.0%
-37.0%
100
cement
highest increase by 35.6%YoY,
-17.0%
300
Hail
23.0%
-40.0%
AlSafwa cement showed the highest increase of 172.3%YoY in its inventory level, followed by Arabian cement which showed an increase of 146.2%YoY. On the other hand, Riyadh and City cement showed a decline in the inventory level by 25.0%YoY and 22.4%YoY respectively.
Cement Dispatches for December 2017 January 2018 Saudi Cement Sector | Monthly Report | December 2017
Market Share – December 2017
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Source: Yamama Cement , AlJazira Capital Southern and Saudi cement
Tabuk
AlJouf
AlSafwa
Najran
Yamamah
City
Yanbu
Market Share December-16- LHS
recorded the highest market share, in December 2017, of 12.0% and 11.7%, respectively. While Hail cement, recorded the lowest market share of 2.4%. Qassim cement increased its market share from 7.1% to 9.0%, while Yanbu market share decline from 17.4% to 10.2%.
YoY Change - RHS
Market Share December-17- LHS
Market Share TTM
Hail
-8.0%
Northern
-6.0%
1.0%
Umm AlQura
4.0%
United Cement
-4.0%
Riyadh
-2.0%
7.0%
Eastern
0.0%
10.0%
Arabian
13.0%
Qassim
2.0%
Saudi
4.0%
16.0%
Southern
19.0%
Source: Yamama Cement , AlJazira Capital 2.3%
Yanbu
Southern
Saudi
Yamamah
Qassim
Arabian
City
Riyadh
Eastern
AlSafwa
Najran
United Cement
AlJouf
Northern
Umm AlQura
Tabuk
2.6%
3.0%
2.2%
2.4%
On TTM basis, Southern and
11.8%
Yanbu
3.7% 3.7%
cement
recorded
the highest market share of
11.3%
11.8% and 11.3% respectively,
3.7% 4.7%
followed by Saudi cement
10.7%
with market share of 10.7%.
5.9% 7.2%
Hail
9.0% 7.5%
EV / Ton (in ‘000 SAR)
8.2%
Source: Bloomberg, Yamama Cement , AlJazira Capital
1300.0 1150.0
Aljouf cement recorded the
1000.0
850.0
highest EV/Ton of SAR 1204.6,
700.0
followed by Tabuk cement
550.0
with EV/Ton of SAR 1117.6
400.0 250.0
P/E & P/BV
EV/Ton
AlJouf
Tabuk
Arabian
Northern
Saudi
Southern
Qassim
Yanbu
Umm AlQura
Eastern
Hail
Yamamah
City
On the other hand, Najran Najran
100.0
Source: TADAWUL , AlJazira Capital. *Najran and Tabuk cement P/E were omitted.
Saudi Cement recorded the
35.00 25.00
2.50
lowest P/E of 14.05x, followed
2.00
by Qassim cement with P/E
1.50
15.00
© All rights reserved
P/BV (RHS)
Najran
Tabuk
Northern
AlJouf
Umm AlQura
Hail
Yamamah
City
Arabian
Southern
Yanbu
Eastern
Qassim
Saudi
1.00
P/E (LHS)
3
EV/Ton of SAR 432.2.
Sector EV/Ton
45.00
5.00
cement recorded the lowest
0.50
of 14.86x. On the other hand, Najran cement recorded the highest P/E of 360.3x. Najran cement recorded the lowest P/BV of 0.82x, while Saudi cement recorded the highest P/BV of 2.70x.
Cement Dispatches for December 2017 January 2018 Saudi Cement Sector | Monthly Report | December 2017
Please read Disclaimer on the back
Dispatches & Change Yamama Cement
-4%
1,000
-6%
0
Dec-17
500
Nov-17
-80%
1,500
Oct-17
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
Feb-17
Jan-17
-60%
-2%
0%
Sep-17
100
2,000
Aug-17
-40%
2%
2,500
Jul-17
-20%
200
3,000
Jun-17
0%
300
4%
3,500
Apr-17
20%
8% 6%
4,000
May-17
400
Change %(RHS)
4,500
Mar-17
40%
Clinker Inventories('000 Ton)(LHS)
5,000
Feb-17
60%
500
0
80%
Jan-17
Change %(RHS)
Dec-16
Dispatches ('000 Ton)(LHS)
600
-8%
Saudi Co SaudiCement Cement Change %(RHS)
5,100 5,000 4,900 4,800 4,700 4,600
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
1,800
Jun-17
80%
May-17
4,400
Apr-17
4,500
-60%
Mar-17
Dec-17
Mar-17
0
Nov-17
-40%
Oct-17
100
Sep-17
-20%
Aug-17
200
Jul-17
0%
Jun-17
300
May-17
20%
Apr-17
400
Feb-17
40%
Jan-17
500
Clinker Inventories('000 Ton)(LHS)
5,200
Feb-17
60%
Jan-17
Change %(RHS)
Dec-16
Dispatches ('000 Ton)(LHS)
600
6% 5% 4% 3% 2% 1% 0% -1% -2% -3% -4%
Qassim Cement
0%
400
-5%
Dec-17
0
Nov-17
200
Oct-17
-60%
5%
600
Sep-17
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
Feb-17
Jan-17
0
-40%
800
Aug-17
-20%
100
10%
1,000
Jul-17
0%
200
15%
1,200
Jun-17
20%
25% 20%
May-17
300
Change %(RHS)
1,400
Apr-17
40%
Mar-17
400
Clinker Inventories('000 Ton)(LHS)
1,600
Feb-17
60%
Jan-17
Change %(RHS)
Dec-16
Dispatches ('000 Ton)(LHS)
500
-10%
Souhtern Cement
-5%
Dec-17
0
Nov-17
500
Oct-17
-100%
Aug-17
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
Feb-17
0
Jan-17
100
0%
1,000
Sep-17
-50%
Jul-17
200
5%
1,500
Jun-17
0%
10%
2,000
May-17
300
20% 15%
2,500
Apr-17
400
Change %(RHS)
3,000
Mar-17
50%
Clinker Inventories('000 Ton)(LHS)
3,500
Feb-17
500
100%
Jan-17
Change %(RHS)
Dec-16
Dispatches ('000 Ton)(LHS)
600
-10%
Yanbu Cement Dispatches ('000 Ton)(LHS)
700
Change %(RHS)
%100
600 %50
500
%0
300 200
%50-
100
4
Change %(RHS)
4,000
15% 10%
2,500
5%
2,000
0%
1,500
-5%
1,000
-10%
Nov-17
Dec-17
Oct-17
Sep-17
Jul-17
Aug-17
Jun-17
May-17
Apr-17
Mar-17
Feb-17
Jan-17
0
Dec-16
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
Feb-17
Jan-17
500
%100-
25% 20%
3,500 3,000
400
0
Clinker Inventories('000 Ton)(LHS)
4,500
-15%
Source: Yamamah Cement Company, AlJazira Research
© All rights reserved
Cement Dispatches for December 2017 January 2018 Saudi Cement Sector | Monthly Report | December 2017
Please read Disclaimer on the back
Dispatches & Change Arabian Cement
20% 10%
400
%0 -10%
200
Dec-17
Nov-17
Oct-17
Sep-17
-20%
Aug-17
0
Jul-17
-100%
30%
600
Jun-17
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
Feb-17
Jan-17
-50%
40%
800
May-17
100
60% 50%
Apr-17
0%
Change %(RHS)
1,000
Mar-17
50%
200
Clinker Inventories('000 Ton)(LHS)
1,200
Jan-17
100%
300
0
150%
Feb-17
Change %(RHS)
Dec-16
Dispatches ('000 Ton)(LHS)
400
-30%
Eastern Co EasternCement Cement Dispatches ('000 Ton)(LHS)
Change %(RHS)
Clinker Inventories('000 Ton)(LHS)
Change %(RHS)
60%
3,000
40%
2,500
20%
2,000
0%
1,500
2%
-20%
1,000
0%
50
-40%
500
0
-60%
0
4%
-2%
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
-4%
Mar-17
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
Feb-17
Jan-17
100
6%
Feb-17
150
10% 8%
Jan-17
200
Dec-16
250
-6%
Najran Cement Dispatches ('000 Ton)(LHS)
Change %(RHS)
Clinker Inventories('000 Ton)(LHS)
Change %(RHS)
80%
3,300
60%
3,200
40%
3,100
150
20%
3,000
100
0%
2,900
-20%
2,800
-40%
2,700
-60%
2,600
-4%
-80%
2,500
-6%
4% 2% 0%
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
-2%
Feb-17
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
Jan-17
0
Feb-17
50
8% 6%
Jan-17
200
Dec-16
250
Northern Cement Dispatches ('000 Ton)(LHS)
150
Change %(RHS)
100% 50%
100
0% 50
-50%
Clinker Inventories('000 Ton)(LHS)
1,400
Change %(RHS)
1,200
30%
1,000
20%
800
10%
600
0%
400
-10%
Dec-17
Oct-17
Nov-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
Feb-17
0
Jan-17
-100%
Dec-16
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
Feb-17
Jan-17
200 0
40%
-20%
AlJouf Cement Change %(RHS) 100% 50% 0%
5
6% 4%
1,150
2%
1,100
0%
1,050
-2%
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
-6%
Jul-17
900
Jun-17
-4%
-100%
May-17
950
Apr-17
1,000
Mar-17
-50%
Feb-17
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
Feb-17
0
Jan-17
50
Change %(RHS)
1,200
Jan-17
100
Clinker Inventories('000 Ton)(LHS)
1,250
Dec-16
Dispatches ('000 Ton)(LHS)
150
Source: Yamamah Cement Company, AlJazira Research
© All rights reserved
Cement Dispatches for December 2017 January 2018 Saudi Cement Sector | Monthly Report | December 2017
Please read Disclaimer on the back
Dispatches & Change Tabuk Cement Dispatches ('000 Ton)(LHS)
700
Change %(RHS)
600
50%
500
Clinker Inventories('000 Ton)(LHS)
1,600
Change %(RHS)
0%
300
8%
1,200
6% 4%
800
2%
600
200
-50%
100
0%
400
-2%
Dec-17
Nov-17
Oct-17
Aug-17
Sep-17
Jul-17
Jun-17
May-17
Apr-17
1,400
Mar-17
100%
Feb-17
0
Jan-17
-4%
-100%
Dec-16
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
Feb-17
200
Jan-17
12% 10%
1,400 1,000
400
0
100%
-6%
City Co CityCement Cement
Nov-17
Dec-17
-15%
Oct-17
-10%
0
Sep-17
-5%
200
Aug-17
-100%
0%
400
Jul-17
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
Feb-17
0
Jan-17
100
5%
600
Jun-17
-50%
10%
800
May-17
0%
200
15%
Apr-17
300
20%
1,000
Mar-17
50%
Change %(RHS)
1,200
Feb-17
400
Clinker Inventories('000 Ton)(LHS)
Jan-17
Change %(RHS)
Dec-16
Dispatches ('000 Ton)(LHS)
500
Hail Cement 3,000
100%
2,500
0%
Dec-17
0
Nov-17
-100%
Oct-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Dec-16
0
2%
500
Sep-17
-50%
20
4%
1,000
Aug-17
40
6%
1,500
Jul-17
0%
Jun-17
60
12% 8%
2,000
May-17
50%
Change %(RHS)
10%
Apr-17
80
Clinker Inventories('000 Ton)(LHS)
Mar-17
100
150%
Feb-17
120
Jan-17
Change %(RHS)
Dec-16
Dispatches ('000 Ton)(LHS)
140
-2%
Riyadh Cement Change %(RHS)
1,600
0%
1,200 1,000
-2%
800
-4%
600 400
-6%
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
200 0
4% 2%
1,400
Mar-17
Dec-17
0
-60%
Nov-17
-40%
Oct-17
50
Sep-17
-20%
Aug-17
100
Jul-17
0%
Jun-17
150
May-17
20%
Apr-17
200
Mar-17
40%
Feb-17
60%
250
Jan-17
300
Clinker Inventories('000 Ton)(LHS)
1,800
Feb-17
80%
Jan-17
Change %(RHS)
Dec-16
Dispatches ('000 Ton)(LHS)
350
-8%
Safwa Cement
800
20%
500
15%
400
10%
300
5%
200
0%
100
Dec-17
Nov-17
Oct-17
Sep-17
-5%
Aug-17
0
Jul-17
-60%
35% 25%
600
Jun-17
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
Feb-17
Jan-17
-40%
40% 30%
May-17
50
Change %(RHS)
700
Apr-17
-20%
Clinker Inventories('000 Ton)(LHS)
900
Mar-17
0%
100
6
40% 20%
150
0
1,000
Jan-17
200
60%
Feb-17
Change %(RHS)
Dec-16
Dispatches ('000 Ton)(LHS)
250
-10%
Source: Yamamah Cement Company, AlJazira Research
© All rights reserved
RESEARCH DIVISION
Head of Research
RESEARCH DIVISION
BROKERAGE AND INVESTMENT CENTERS DIVISION
Talha Nazar
Sultan Al Kadi, CAIA
Analyst
Jassim Al-Jubran
+966 11 2256250 [email protected]
+966 11 2256374 [email protected]
Analyst
Analyst
Waleed Al-jubayr
Muhanad Al-Odan
+966 11 2256146 [email protected]
+966 11 2256115 [email protected]
General Manager – Brokerage Services &
AGM-Head of international and institutional
AGM- Head of Western and Southern Region Investment
sales
brokerage
Centers
Alaa Al-Yousef
Luay Jawad Al-Motawa
Mansour Hamad Al-shuaibi
+966 11 2256060 [email protected]
+966 11 2256277 [email protected]
AGM-Head of Sales And Investment Centers
AGM-Head of Qassim & Eastern Province
+966 11 2256248 [email protected]
+966 12 6618443 [email protected]
Central Region
Sultan Ibrahim AL-Mutawa
Abdullah Al-Rahit
+966 11 2256364 [email protected]
+966 16 3617547 [email protected]
AlJazira Capital, the investment arm of Bank AlJazira, is a Shariaa Compliant Saudi Closed Joint Stock company and operating under the regulatory supervision of the Capital Market Authority. AlJazira Capital is licensed to conduct securities business in all securities business as authorized by CMA, including dealing, managing, arranging, advisory, and custody. AlJazira Capital is the continuation of a long success story in the Saudi Tadawul market, having occupied the market leadership position for several years. With an objective to maintain its market leadership position, AlJazira Capital is expanding its brokerage capabilities to offer further value-added services, brokerage across MENA and International markets, as well as offering a full suite of securities business. 1.
RATING TERMINOLOGY
Analyst
2. 3. 4.
Overweight: This rating implies that the stock is currently trading at a discount to its 12 months price target. Stocks rated “Overweight” will typically provide an upside potential of over 10% from the current price levels over next twelve months. Underweight: This rating implies that the stock is currently trading at a premium to its 12 months price target. Stocks rated “Underweight” would typically decline by over 10% from the current price levels over next twelve months. Neutral: The rating implies that the stock is trading in the proximate range of its 12 months price target. Stocks rated “Neutral” is expected to stagnate within +/- 10% range from the current price levels over next twelve months. Suspension of rating or rating on hold (SR/RH): This basically implies suspension of a rating pending further analysis of a material change in the fundamentals of the company.
Disclaimer The purpose of producing this report is to present a general view on the company/economic sector/economic subject under research, and not to recommend a buy/sell/hold for any security or any other assets. Based on that, this report does not take into consideration the specific financial position of every investor and/or his/her risk appetite in relation to investing in the security or any other assets, and hence, may not be suitable for all clients depending on their financial position and their ability and willingness to undertake risks. It is advised that every potential investor seek professional advice from several sources concerning investment decision and should study the impact of such decisions on his/her financial/legal/tax position and other concerns before getting into such investments or liquidate them partially or fully. The market of stocks, bonds, macroeconomic or microeconomic variables are of a volatile nature and could witness sudden changes without any prior warning, therefore, the investor in securities or other assets might face some unexpected risks and fluctuations. All the information, views and expectations and fair values or target prices contained in this report have been compiled or arrived at by Aljazira Capital from sources believed to be reliable, but Aljazira Capital has not independently verified the contents obtained from these sources and such information may be condensed or incomplete. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on the fairness, accuracy, completeness or correctness of the information and opinions contained in this report. Aljazira Capital shall not be liable for any loss as that may arise from the use of this report or its contents or otherwise arising in connection therewith. The past performance of any investment is not an indicator of future performance. Any financial projections, fair value estimates or price targets and statements regarding future prospects contained in this document may not be realized. The value of the security or any other assets or the return from them might increase or decrease. Any change in currency rates may have a positive or negative impact on the value/return on the stock or securities mentioned in the report. The investor might get an amount less than the amount invested in some cases. Some stocks or securities maybe, by nature, of low volume/trades or may become like that unexpectedly in special circumstances and this might increase the risk on the investor. Some fees might be levied on some investments in securities. This report has been written by professional employees in Aljazira Capital, and they undertake that neither them, nor their wives or children hold positions directly in any listed shares or securities contained in this report during the time of publication of this report, however, The authors and/or their wives/children of this document may own securities in funds open to the public that invest in the securities mentioned in this document as part of a diversified portfolio over which they have no discretion. This report has been produced independently and separately by the Research Division at Aljazira Capital and no party (in-house or outside) who might have interest whether direct or indirect have seen the contents of this report before its publishing, except for those whom corporate positions allow them to do so, and/or third-party persons/institutions who signed a non-disclosure agreement with Aljazira Capital. Funds managed by Aljazira Capital and its subsidiaries for third parties may own the securities that are the subject of this document. Aljazira Capital or its subsidiaries may own securities in one or more of the aforementioned companies, and/or indirectly through funds managed by third parties. The Investment Banking division of Aljazira Capital maybe in the process of soliciting or executing fee earning mandates for companies that is either the subject of this document or is mentioned in this document. One or more of Aljazira Capital board members or executive managers could be also a board member or member of the executive management at the company or companies mentioned in this report, or their associated companies. No part of this report may be reproduced whether inside or outside the Kingdom of Saudi Arabia without the written permission of Aljazira Capital. Persons who receive this report should make themselves aware, of and adhere to, any such restrictions. By accepting this report, the recipient agrees to be bound by the foregoing limitations.
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Aljazira Capital is a Saudi Investment Company licensed by the Capital Market Authority (CMA), license No. 07076-37
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Cement dispatches: Cement dispatches for the month of December-2017 stood at 4.1mn tons, compared to 4.4mn tons in December-2016, depicting a decline of 6.59%YoY, and an increase of 7.4%MoM. Clinker inventory continued to increase and stood at 35.63mn ton, depicting an increase of 26.7%YoY and 0.11%MoM. For 12M-2017, cement dispatches stood at 47.23mn ton compared to 55.65mn ton in 12M-2016, depicting a decline of 15.13%YoY. Change in Cement Dispatches
Source: Yamama Cement, AlJazira Capital
5,000
Change %(RHS)
Dispatches (1000 Ton)(LHS)
80%
4,500
60%
4,000
40%
3,500
20%
Cement dispatches increased by 7.4%MoM, standing at 4.1MT compared to 3.8MT in November 2017.
0%
3,000
Utilization Rate (TTM)
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Feb-17
Jun-17
-60%
May-17
1,500
Apr-17
-40%
Mar-17
2,000
Jan-17
-20%
Dec-16
2,500
Source: Yamama Cement, AlJazira Capital
85.0%
The total Utilization rate of
72.8%
70.0%
to 71.4%
69.2%
69.4%
66.6%
in
December
2017 compared to 79.0% in 68.7%
68.1%
67.6%
Oct-17
74.3%
Sep-17
75.0%
Saudi cement sector declined 75.6%
Aug-17
77.6%
Jul-17
79.0%
Jun-17
80.0%
67.0% 66.6%
December 2016.
65.0%
Change in Clinker Inventories
Dec-17
Nov-17
May-17
Apr-17
Mar-17
Feb-17
Jan-17
55.0%
Dec-16
60.0%
Source: Yamama Cement, AlJazira Capital
36,500
10% 8% 6%
31,000
4% 2% 25,500
0%
Clinker Inventories showed a modest increase of 0.11%MoM and stood at 35.62MT compared to 35.59MT in November 2017.
1
Dec-17
Nov-17
Change %(RHS)
Oct-17
Sep-17
Jul-17
Aug-17
Total Invetories (1000 Ton)(LHS)
Jun-17
May-17
Apr-17
Mar-17
Feb-17
Jan-17
20,000
Dec-16
-2% -4%
Analyst
Waleed Al-jubayr +966 11 2256146 [email protected]
© All rights reserved
Cement Dispatches for December 2017 January 2018 Saudi Cement Sector | Monthly Report | December 2017
Cement Dispatches for December 2017
Please read Disclaimer on the back
Source: Yamama Cement , AlJazira Capital 43.0%
700 600 500 400 200
0.0%
4,500
-10.0% -20.0%
3,000
-30.0%
1,500
Sales / Production for 2017
Hail
Tabuk
Northern
AlJouf
Umm AlQura
YoY Change (%) -RHS
United Cement
AlSafwa
Najran
Eastern
Riyadh
City
Arabian
Qassim
Yamamah
Saudi
Yanbu
-40.0%
Southern
Riyadh of
cement
with
25.1%YoY
and
Source: Yamama Cement , AlJazira Capital
6,000
-50.0%
For 2017, city cement was the only company to show growth (8.7%YoY). While Najran cement and Northern cement showed a decline of 39.0%YoY and 38.2%YoY respectively.
Source: Yamama Cement , AlJazira Capital
Riyadh cement and City
140.0%
cement showed the highest
120.0%
cement
100.0%
sales
/
clinker
production ratio of 128.8%
80.0%
and
60.0%
On the other hand, Hail Hail
Umm AlQura
Northern
AlSafwa
Eastern
Tabuk
Southern
Yanbu
Arabian
AlJouf
Yamamah
Saudi
Qassim
Najran
City
United Cement
Sales / Production
Clinker Inventories
respectively.
170.0% 140.0%
4500
110.0%
3750
80.0%
3000
50.0%
2250
20.0%
1500
-10.0%
© All rights reserved
United Cement
AlSafwa
City
Arabian
AlJouf
Riyadh
Northern
Tabuk
YoY Change (%) -RHS
Umm AlQura
Dec-17- LHS
Qassim
Hail
Eastern
Southern
Najran
Yanbu
Yamamah
Saudi
750
Dec-16- LHS
cement showed a cement sales/
clinker
production
ratio of 54.9% and 70.1% respectively.
Source: Yamama Cement , AlJazira Capital
5250
0
116.7%
cement and Umm AlQura Riyadh
40.0%
2
declined the most by 44.4%YoY,
25.0%YoY, respectively.
10.0%
2017-LHS
and
18.1%YoY. While Yanbu cement
decline
20.0%
2016- LHS
Qassim
an increase of 21.4%YoY and
and
7,500
0
by
Tabuk cement which showed
followed by Yamamah cement
YoY Change (%) -RHS
Cement Dispatches for 2017
the
followed
-57.0%
Hail
Northern
Tabuk
Umm AlQura
AlJouf
AlSafwa
Riyadh
Dec-17 - LHS
United Cement
Dec-16 - LHS
Najran
Eastern
Arabian
Yamamah
City
Qassim
Yanbu
Saudi
Southern
0
showed
3.0%
-37.0%
100
cement
highest increase by 35.6%YoY,
-17.0%
300
Hail
23.0%
-40.0%
AlSafwa cement showed the highest increase of 172.3%YoY in its inventory level, followed by Arabian cement which showed an increase of 146.2%YoY. On the other hand, Riyadh and City cement showed a decline in the inventory level by 25.0%YoY and 22.4%YoY respectively.
Cement Dispatches for December 2017 January 2018 Saudi Cement Sector | Monthly Report | December 2017
Market Share – December 2017
Please read Disclaimer on the back
Source: Yamama Cement , AlJazira Capital Southern and Saudi cement
Tabuk
AlJouf
AlSafwa
Najran
Yamamah
City
Yanbu
Market Share December-16- LHS
recorded the highest market share, in December 2017, of 12.0% and 11.7%, respectively. While Hail cement, recorded the lowest market share of 2.4%. Qassim cement increased its market share from 7.1% to 9.0%, while Yanbu market share decline from 17.4% to 10.2%.
YoY Change - RHS
Market Share December-17- LHS
Market Share TTM
Hail
-8.0%
Northern
-6.0%
1.0%
Umm AlQura
4.0%
United Cement
-4.0%
Riyadh
-2.0%
7.0%
Eastern
0.0%
10.0%
Arabian
13.0%
Qassim
2.0%
Saudi
4.0%
16.0%
Southern
19.0%
Source: Yamama Cement , AlJazira Capital 2.3%
Yanbu
Southern
Saudi
Yamamah
Qassim
Arabian
City
Riyadh
Eastern
AlSafwa
Najran
United Cement
AlJouf
Northern
Umm AlQura
Tabuk
2.6%
3.0%
2.2%
2.4%
On TTM basis, Southern and
11.8%
Yanbu
3.7% 3.7%
cement
recorded
the highest market share of
11.3%
11.8% and 11.3% respectively,
3.7% 4.7%
followed by Saudi cement
10.7%
with market share of 10.7%.
5.9% 7.2%
Hail
9.0% 7.5%
EV / Ton (in ‘000 SAR)
8.2%
Source: Bloomberg, Yamama Cement , AlJazira Capital
1300.0 1150.0
Aljouf cement recorded the
1000.0
850.0
highest EV/Ton of SAR 1204.6,
700.0
followed by Tabuk cement
550.0
with EV/Ton of SAR 1117.6
400.0 250.0
P/E & P/BV
EV/Ton
AlJouf
Tabuk
Arabian
Northern
Saudi
Southern
Qassim
Yanbu
Umm AlQura
Eastern
Hail
Yamamah
City
On the other hand, Najran Najran
100.0
Source: TADAWUL , AlJazira Capital. *Najran and Tabuk cement P/E were omitted.
Saudi Cement recorded the
35.00 25.00
2.50
lowest P/E of 14.05x, followed
2.00
by Qassim cement with P/E
1.50
15.00
© All rights reserved
P/BV (RHS)
Najran
Tabuk
Northern
AlJouf
Umm AlQura
Hail
Yamamah
City
Arabian
Southern
Yanbu
Eastern
Qassim
Saudi
1.00
P/E (LHS)
3
EV/Ton of SAR 432.2.
Sector EV/Ton
45.00
5.00
cement recorded the lowest
0.50
of 14.86x. On the other hand, Najran cement recorded the highest P/E of 360.3x. Najran cement recorded the lowest P/BV of 0.82x, while Saudi cement recorded the highest P/BV of 2.70x.
Cement Dispatches for December 2017 January 2018 Saudi Cement Sector | Monthly Report | December 2017
Please read Disclaimer on the back
Dispatches & Change Yamama Cement
-4%
1,000
-6%
0
Dec-17
500
Nov-17
-80%
1,500
Oct-17
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
Feb-17
Jan-17
-60%
-2%
0%
Sep-17
100
2,000
Aug-17
-40%
2%
2,500
Jul-17
-20%
200
3,000
Jun-17
0%
300
4%
3,500
Apr-17
20%
8% 6%
4,000
May-17
400
Change %(RHS)
4,500
Mar-17
40%
Clinker Inventories('000 Ton)(LHS)
5,000
Feb-17
60%
500
0
80%
Jan-17
Change %(RHS)
Dec-16
Dispatches ('000 Ton)(LHS)
600
-8%
Saudi Co SaudiCement Cement Change %(RHS)
5,100 5,000 4,900 4,800 4,700 4,600
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
1,800
Jun-17
80%
May-17
4,400
Apr-17
4,500
-60%
Mar-17
Dec-17
Mar-17
0
Nov-17
-40%
Oct-17
100
Sep-17
-20%
Aug-17
200
Jul-17
0%
Jun-17
300
May-17
20%
Apr-17
400
Feb-17
40%
Jan-17
500
Clinker Inventories('000 Ton)(LHS)
5,200
Feb-17
60%
Jan-17
Change %(RHS)
Dec-16
Dispatches ('000 Ton)(LHS)
600
6% 5% 4% 3% 2% 1% 0% -1% -2% -3% -4%
Qassim Cement
0%
400
-5%
Dec-17
0
Nov-17
200
Oct-17
-60%
5%
600
Sep-17
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
Feb-17
Jan-17
0
-40%
800
Aug-17
-20%
100
10%
1,000
Jul-17
0%
200
15%
1,200
Jun-17
20%
25% 20%
May-17
300
Change %(RHS)
1,400
Apr-17
40%
Mar-17
400
Clinker Inventories('000 Ton)(LHS)
1,600
Feb-17
60%
Jan-17
Change %(RHS)
Dec-16
Dispatches ('000 Ton)(LHS)
500
-10%
Souhtern Cement
-5%
Dec-17
0
Nov-17
500
Oct-17
-100%
Aug-17
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
Feb-17
0
Jan-17
100
0%
1,000
Sep-17
-50%
Jul-17
200
5%
1,500
Jun-17
0%
10%
2,000
May-17
300
20% 15%
2,500
Apr-17
400
Change %(RHS)
3,000
Mar-17
50%
Clinker Inventories('000 Ton)(LHS)
3,500
Feb-17
500
100%
Jan-17
Change %(RHS)
Dec-16
Dispatches ('000 Ton)(LHS)
600
-10%
Yanbu Cement Dispatches ('000 Ton)(LHS)
700
Change %(RHS)
%100
600 %50
500
%0
300 200
%50-
100
4
Change %(RHS)
4,000
15% 10%
2,500
5%
2,000
0%
1,500
-5%
1,000
-10%
Nov-17
Dec-17
Oct-17
Sep-17
Jul-17
Aug-17
Jun-17
May-17
Apr-17
Mar-17
Feb-17
Jan-17
0
Dec-16
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
Feb-17
Jan-17
500
%100-
25% 20%
3,500 3,000
400
0
Clinker Inventories('000 Ton)(LHS)
4,500
-15%
Source: Yamamah Cement Company, AlJazira Research
© All rights reserved
Cement Dispatches for December 2017 January 2018 Saudi Cement Sector | Monthly Report | December 2017
Please read Disclaimer on the back
Dispatches & Change Arabian Cement
20% 10%
400
%0 -10%
200
Dec-17
Nov-17
Oct-17
Sep-17
-20%
Aug-17
0
Jul-17
-100%
30%
600
Jun-17
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
Feb-17
Jan-17
-50%
40%
800
May-17
100
60% 50%
Apr-17
0%
Change %(RHS)
1,000
Mar-17
50%
200
Clinker Inventories('000 Ton)(LHS)
1,200
Jan-17
100%
300
0
150%
Feb-17
Change %(RHS)
Dec-16
Dispatches ('000 Ton)(LHS)
400
-30%
Eastern Co EasternCement Cement Dispatches ('000 Ton)(LHS)
Change %(RHS)
Clinker Inventories('000 Ton)(LHS)
Change %(RHS)
60%
3,000
40%
2,500
20%
2,000
0%
1,500
2%
-20%
1,000
0%
50
-40%
500
0
-60%
0
4%
-2%
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
-4%
Mar-17
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
Feb-17
Jan-17
100
6%
Feb-17
150
10% 8%
Jan-17
200
Dec-16
250
-6%
Najran Cement Dispatches ('000 Ton)(LHS)
Change %(RHS)
Clinker Inventories('000 Ton)(LHS)
Change %(RHS)
80%
3,300
60%
3,200
40%
3,100
150
20%
3,000
100
0%
2,900
-20%
2,800
-40%
2,700
-60%
2,600
-4%
-80%
2,500
-6%
4% 2% 0%
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
-2%
Feb-17
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
Jan-17
0
Feb-17
50
8% 6%
Jan-17
200
Dec-16
250
Northern Cement Dispatches ('000 Ton)(LHS)
150
Change %(RHS)
100% 50%
100
0% 50
-50%
Clinker Inventories('000 Ton)(LHS)
1,400
Change %(RHS)
1,200
30%
1,000
20%
800
10%
600
0%
400
-10%
Dec-17
Oct-17
Nov-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
Feb-17
0
Jan-17
-100%
Dec-16
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
Feb-17
Jan-17
200 0
40%
-20%
AlJouf Cement Change %(RHS) 100% 50% 0%
5
6% 4%
1,150
2%
1,100
0%
1,050
-2%
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
-6%
Jul-17
900
Jun-17
-4%
-100%
May-17
950
Apr-17
1,000
Mar-17
-50%
Feb-17
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
Feb-17
0
Jan-17
50
Change %(RHS)
1,200
Jan-17
100
Clinker Inventories('000 Ton)(LHS)
1,250
Dec-16
Dispatches ('000 Ton)(LHS)
150
Source: Yamamah Cement Company, AlJazira Research
© All rights reserved
Cement Dispatches for December 2017 January 2018 Saudi Cement Sector | Monthly Report | December 2017
Please read Disclaimer on the back
Dispatches & Change Tabuk Cement Dispatches ('000 Ton)(LHS)
700
Change %(RHS)
600
50%
500
Clinker Inventories('000 Ton)(LHS)
1,600
Change %(RHS)
0%
300
8%
1,200
6% 4%
800
2%
600
200
-50%
100
0%
400
-2%
Dec-17
Nov-17
Oct-17
Aug-17
Sep-17
Jul-17
Jun-17
May-17
Apr-17
1,400
Mar-17
100%
Feb-17
0
Jan-17
-4%
-100%
Dec-16
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
Feb-17
200
Jan-17
12% 10%
1,400 1,000
400
0
100%
-6%
City Co CityCement Cement
Nov-17
Dec-17
-15%
Oct-17
-10%
0
Sep-17
-5%
200
Aug-17
-100%
0%
400
Jul-17
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
Feb-17
0
Jan-17
100
5%
600
Jun-17
-50%
10%
800
May-17
0%
200
15%
Apr-17
300
20%
1,000
Mar-17
50%
Change %(RHS)
1,200
Feb-17
400
Clinker Inventories('000 Ton)(LHS)
Jan-17
Change %(RHS)
Dec-16
Dispatches ('000 Ton)(LHS)
500
Hail Cement 3,000
100%
2,500
0%
Dec-17
0
Nov-17
-100%
Oct-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Dec-16
0
2%
500
Sep-17
-50%
20
4%
1,000
Aug-17
40
6%
1,500
Jul-17
0%
Jun-17
60
12% 8%
2,000
May-17
50%
Change %(RHS)
10%
Apr-17
80
Clinker Inventories('000 Ton)(LHS)
Mar-17
100
150%
Feb-17
120
Jan-17
Change %(RHS)
Dec-16
Dispatches ('000 Ton)(LHS)
140
-2%
Riyadh Cement Change %(RHS)
1,600
0%
1,200 1,000
-2%
800
-4%
600 400
-6%
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
200 0
4% 2%
1,400
Mar-17
Dec-17
0
-60%
Nov-17
-40%
Oct-17
50
Sep-17
-20%
Aug-17
100
Jul-17
0%
Jun-17
150
May-17
20%
Apr-17
200
Mar-17
40%
Feb-17
60%
250
Jan-17
300
Clinker Inventories('000 Ton)(LHS)
1,800
Feb-17
80%
Jan-17
Change %(RHS)
Dec-16
Dispatches ('000 Ton)(LHS)
350
-8%
Safwa Cement
800
20%
500
15%
400
10%
300
5%
200
0%
100
Dec-17
Nov-17
Oct-17
Sep-17
-5%
Aug-17
0
Jul-17
-60%
35% 25%
600
Jun-17
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
Feb-17
Jan-17
-40%
40% 30%
May-17
50
Change %(RHS)
700
Apr-17
-20%
Clinker Inventories('000 Ton)(LHS)
900
Mar-17
0%
100
6
40% 20%
150
0
1,000
Jan-17
200
60%
Feb-17
Change %(RHS)
Dec-16
Dispatches ('000 Ton)(LHS)
250
-10%
Source: Yamamah Cement Company, AlJazira Research
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RESEARCH DIVISION
Head of Research
RESEARCH DIVISION
BROKERAGE AND INVESTMENT CENTERS DIVISION
Talha Nazar
Sultan Al Kadi, CAIA
Analyst
Jassim Al-Jubran
+966 11 2256250 [email protected]
+966 11 2256374 [email protected]
Analyst
Analyst
Waleed Al-jubayr
Muhanad Al-Odan
+966 11 2256146 [email protected]
+966 11 2256115 [email protected]
General Manager – Brokerage Services &
AGM-Head of international and institutional
AGM- Head of Western and Southern Region Investment
sales
brokerage
Centers
Alaa Al-Yousef
Luay Jawad Al-Motawa
Mansour Hamad Al-shuaibi
+966 11 2256060 [email protected]
+966 11 2256277 [email protected]
AGM-Head of Sales And Investment Centers
AGM-Head of Qassim & Eastern Province
+966 11 2256248 [email protected]
+966 12 6618443 [email protected]
Central Region
Sultan Ibrahim AL-Mutawa
Abdullah Al-Rahit
+966 11 2256364 [email protected]
+966 16 3617547 [email protected]
AlJazira Capital, the investment arm of Bank AlJazira, is a Shariaa Compliant Saudi Closed Joint Stock company and operating under the regulatory supervision of the Capital Market Authority. AlJazira Capital is licensed to conduct securities business in all securities business as authorized by CMA, including dealing, managing, arranging, advisory, and custody. AlJazira Capital is the continuation of a long success story in the Saudi Tadawul market, having occupied the market leadership position for several years. With an objective to maintain its market leadership position, AlJazira Capital is expanding its brokerage capabilities to offer further value-added services, brokerage across MENA and International markets, as well as offering a full suite of securities business. 1.
RATING TERMINOLOGY
Analyst
2. 3. 4.
Overweight: This rating implies that the stock is currently trading at a discount to its 12 months price target. Stocks rated “Overweight” will typically provide an upside potential of over 10% from the current price levels over next twelve months. Underweight: This rating implies that the stock is currently trading at a premium to its 12 months price target. Stocks rated “Underweight” would typically decline by over 10% from the current price levels over next twelve months. Neutral: The rating implies that the stock is trading in the proximate range of its 12 months price target. Stocks rated “Neutral” is expected to stagnate within +/- 10% range from the current price levels over next twelve months. Suspension of rating or rating on hold (SR/RH): This basically implies suspension of a rating pending further analysis of a material change in the fundamentals of the company.
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