Cement Dispatches for February 2018 - Aljazira Capital
Cement Dispatches for February 2018 March 2018 Saudi Cement Sector | Monthly Report | February 2018
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Cement dispatches: Cement dispatches for the month of February-2018 stood at 3.63mn tons, compared to 4.09mn tons in February-2017, depicting a decline of 11.1%YoY. Clinker inventory showed an increase of 1.29% MoM, and 23.7%YoY. For 2M-2018, Cement dispatches stood at 7.71mn tons compared to 8.93mn tons in 2017, depicting a decline of 13.7%. Sales / clinker production ratio stood at 109.4% for the month, where Riyadh cement registered the highest ratio at 214.4%. Change in Cement Dispatches
Source: Yamama Cement, AlJazira Capital
5,000
Change %(RHS)
Dispatches (1000 Ton)(LHS)
80%
-40%
1,500
-60%
Oct-17
Sep-17
Utilization Rate (TTM)
Feb-18
2,000
Jan-18
-20%
Dec-17
2,500
Nov-17
0%
Aug-17
3,000
Jul-17
20%
Jun-17
3,500
May-17
40%
Apr-17
4,000
Mar-17
60%
Feb-17
4,500
11.1%YoY.
The total Utilization rate of Saudi
70.0%
cement sector declined to 65.5% in February 2018 compared to
71.4%
69.2%
69.4%
68.7%
68.1%
75.6% in February 2017.
67.6%
67.0%
66.6%
Dec-17
72.8%
Nov-17
74.3%
Oct-17
75.6%
a decline of 11.0% MoM, and
Source: Yamama Cement, AlJazira Capital
80.0% 75.0%
Cement dispatches showed
65.0%
65.5%
65.5%
Change in Clinker Inventories
Feb-18
Jan-18
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
55.0%
Feb-17
60.0%
Source: Yamama Cement, AlJazira Capital
36,500
10.0% 8.0% 6.0%
31,000
25,500
Clinker Inventories showed an increase of 1.29%MoM and stood
4.0%
at 35.63MT compared to 35.18MT
2.0%
in January 2018.
0.0%
1
Jan-18
Feb-18
Change %(RHS)
Dec-17
Oct-17
Nov-17
Total Invetories (1000 Ton)(LHS)
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
20,000
Feb-17
-2.0% -4.0%
Analyst
Waleed Al-jubayr +966 11 2256146 [email protected]
© All rights reserved
Cement Dispatches for February 2018 March 2018 Saudi Cement Sector | Monthly Report | February 2018
Cement Dispatches for February 2018
Please read Disclaimer on the back
Source: Yamama Cement , AlJazira Capital 25.0%
500
15.0%
400
5.0%
300
100
of 74.0%YoY and 17.9%YoY,
-25.0%
Riyadh cement showed the
Feb-17 - LHS
Feb-18 - LHS
Hail
AlJouf
Tabuk
Northern
United
Umm AlQura
AlSafwa
Riyadh
Najran
Eastern
City
Yamamah
Qassim
Arabian
Southern
Yanbu
Saudi
-35.0%
0
-45.0%
20.0% 10.0%
800
0.0%
600
-10.0% -20.0%
400
-30.0%
200
Hail
Tabuk
AlJouf
Northern
United
AlSafwa
Umm AlQura
2M-2018-LHS
Najran
Riyadh
Eastern
City
Yamamah
Qassim
Arabian
Southern
Yanbu
Saudi
-40.0% -50.0%
Source: Yamama Cement , AlJazira Capital
Riyadh and Najran cement showed
220.0%
the highest cement sales / clinker
180.0%
production ratio of 214.4% and
140.0%
192.9% respectively. On the other
100.0%
hand, Hail cement and Tabuk cement showed a cement sales/
60.0%
Clinker Inventories – February 2018
Hail
Tabuk
Southern
Umm AlQura
Yamamah
Qassim
Eastern
United
Saudi
AlSafwa
Yanbu
Arabian
AlJouf
Northern
City
Najran
Riyadh
clinker production ratio of 60.8%
Sales / Production
400.0%
350.0%
4500
300.0%
3750
250.0%
3000
200.0% 150.0%
2250
100.0%
1500
50.0%
750
© All rights reserved
United
AlSafwa
City
Arabian
Riyadh
Northern
YoY Change (%) -RHS
Umm AlQura
Feb-18 - LHS
AlJouf
Tabuk
Qassim
Eastern
Hail
Najran
Southern
Yanbu
Yamamah
Saudi
0.0%
Feb-17 - LHS
and 71.9% respectively.
Source: Yamama Cement , AlJazira Capital
5250
2
For 2M-2018, Umm AlQura cement showed the highest increase of 27.1%, followed by Hail cement with increase of 15.2%. While Riyadh cement and Yamama cement showed a decline of 39.7%YoY and 32.3%YoY respectively.
YoY Change (%) -RHS
Sales / Production for 2M-2018
0
followed by Yamama cement with decline of 36.4%YoY.
30.0%
1,000
20.0%
highest decline of 40.8%YoY,
Source: Yamama Cement , AlJazira Capital
1,200
2M-2017- LHS
respectively. On the other hand,
YoY Change (%) -RHS
Cement Dispatches for 2M-2018
0
showed the highest increase
-5.0%
-15.0%
200
Umm AlQura and Hail cement
-50.0%
Arabian cement showed the highest increase of 207.6%YoY in its inventory level, followed by Umm AlQura cement which showed an increase of 200.7%YoY. On the other hand, Riyadh and City cement showed a decline in the inventory level by 35.1%YoY and 20.3%YoY respectively.
Cement Dispatches for February 2018 March 2018 Saudi Cement Sector | Monthly Report | February 2018
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Market Share – February 2018
Source: Yamama Cement , AlJazira Capital Yamama and Saudi cement
14.0% 12.0% 10.0% 8.0% 6.0% 4.0%
Market Share TTM
United
Hail
AlSafwa
AlJouf
Northern
City
Najran
Riyadh
Market Share February-18 - LHS
Umm AlQura
Market Share February-17 - LHS
Tabuk
Southern
Arabian
Yanbu
Qassim
Eastern
Saudi
0.0%
Yamamah
2.0%
2.5% 2.0% 1.5% 1.0% 0.5% 0.0% -0.5% -1.0% -1.5% -2.0% -2.5% -3.0%
YoY Change - RHS
recorded the highest market share, in February 2018, of 12.7% and 12.5%, respectively. While United cement, recorded the lowest market share of 2.7%. Saudi cement increased its market share from 10.5% to 12.5%YoY, while Arabian cement market share decline from 7.6% to 6.2%YoY.
Source: Yamama Cement , AlJazira Capital
Yanbu
Southern
Saudi
Yamamah
Qassim
Arabian
City
Riyadh
Eastern
AlSafwa
Najran
United
AlJouf
Northern
Umm AlQura
Tabuk
2.6%
2.3%
2.3%
2.8%
2.9%
On TTM basis, Southern and
11.8%
Yanbu cement recorded the
3.7%
highest market share of 11.8%
11.2%
3.8%
and 11.2% followed by Saudi
3.8% 4.7%
7.0%
Hail
11.0%
8.7% 7.6%
EV / Ton (in ‘000 SAR)
cement with market share of
11.0%
5.6%
8.1%
Source: Bloomberg, Yamama Cement , AlJazira Capital
1300.0 1150.0
AlJouf cement recorded the
1000.0
850.0
highest EV/Ton of SAR 1230.8,
700.0
followed by Saudi cement with
550.0
EV/Ton of SAR 996.7; whereas
400.0 250.0
P/E & P/BV
EV/Ton
Source: TADAWUL , AlJazira Capital. *Najran and Tabuk cement P/E were omitted. 3.00
35.00
2.50
30.00 25.00
2.00
20.00
1.50
15.00
1.00
© All rights reserved
Najran
Tabuk
Northern
AlJouf
Hail
P/BV (RHS)
Umm AlQura
P/E (LHS)
Yamamah
Arabian
City
Southern
Yanbu
Qassim
Saudi
Eastern
10.00 5.00
lowest EV/Ton of SAR 387.5.
Sector EV/Ton
40.00
3
AlJouf
Saudi
Tabuk
Arabian
Northern
Southern
Qassim
Yanbu
Umm AlQura
Hail
Eastern
Yamamah
City
Najran cement recorded the Najran
100.0
0.50
Eastern Cement recorded the lowest P/E of 14.07x, followed by Saudi cement with P/E of 14.33x. On the other hand, Najran cement recorded the highest P/E of 343.62. Furthermore, Najran cement recorded the lowest P/ BV of 0.78x, while Saudi cement recorded the highest P/BV of 2.75x.
Cement Dispatches for February 2018 March 2018 Saudi Cement Sector | Monthly Report | February 2018
Please read Disclaimer on the back
Dispatches & Change Yamama Cement 6,000
55%
5,000
-4%
Feb-18
Jan-18
Dec-17
Nov-17
-6%
Oct-17
Feb-18
Jan-18
Dec-17
Nov-17
Jun-17
Oct-17
0
Sep-17
-65%
Aug-17
0
Jul-17
1,000
May-17
-45%
Apr-17
100
Mar-17
-2%
2,000
Sep-17
-25%
0%
Aug-17
200
2%
3,000
Jul-17
-5%
8% 4%
4,000
Jun-17
15%
300
Change %(RHS)
6%
May-17
35%
400
Clinker Inventories('000 Ton)(LHS)
Apr-17
500
75%
Mar-17
Change %(RHS)
Feb-17
Dispatches ('000 Ton)(LHS)
600
-8%
Saudi Co SaudiCement Cement
-15%
4,700 4,600
Feb-18
Jan-18
1,800
Dec-17
80%
Nov-17
4,400
Oct-17
4,500
-55%
Sep-17
Feb-18
Jan-18
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
4,800
Aug-17
-35%
100 0
4,900
Jul-17
200
5,000
5%
Jun-17
300
Change %(RHS)
5,100
May-17
25%
400
Clinker Inventories('000 Ton)(LHS)
5,200
Apr-17
500
45%
Mar-17
Change %(RHS)
Feb-17
Dispatches ('000 Ton)(LHS)
600
6% 5% 4% 3% 2% 1% 0% -1% -2% -3% -4% -5%
Qassim Cement
0%
200 0
Feb-18
-60%
400
Jan-18
Feb-18
Jan-18
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
0
5%
600
Dec-17
-40%
50
10%
800
Oct-17
-20%
100
1,000
Nov-17
0%
150
15%
1,200
Sep-17
20%
200
25% 20%
Aug-17
250
Change %(RHS)
1,400
Jul-17
40%
Jun-17
300
May-17
60%
Apr-17
350
Clinker Inventories('000 Ton)(LHS)
1,600
Mar-17
Change %(RHS)
Feb-17
Dispatches ('000 Ton)(LHS)
400
-5%
Souhtern Cement Dispatches ('000 Ton)(LHS)
600
Change %(RHS)
90%
Change %(RHS)
3,000
500 40%
400 300
-10%
200 100
10%
2,000
5%
1,500
0%
1,000
-5%
Feb-18
Jan-18
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
3,500
Jun-17
50%
May-17
4,500
Apr-17
90%
Mar-17
0
Feb-17
Feb-18
Jan-18
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
-60%
20% 15%
2,500
500
Mar-17
0
Clinker Inventories('000 Ton)(LHS)
3,500
-10%
Yanbu Cement
4
1,000
-5%
Feb-18
Jan-18
0
Dec-17
500
Nov-17
-70%
0%
1,500
Oct-17
Feb-18
Jan-18
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
0
Mar-17
100
5%
2,000
Sep-17
-30%
2,500
Aug-17
200
20%
10%
3,000
Jul-17
10%
Jun-17
300
Apr-17
400
Change %(RHS)
15%
May-17
500
Clinker Inventories('000 Ton)(LHS)
4,000
Mar-17
Change %(RHS)
Feb-17
Dispatches ('000 Ton)(LHS)
600
-10%
Source: Yamamah Cement Company, AlJazira Research
© All rights reserved
Cement Dispatches for February 2018 March 2018 Saudi Cement Sector | Monthly Report | February 2018
Please read Disclaimer on the back
Dispatches & Change Arabian Cement
40%
800
30%
600
20% 10%
400
0%
200
Feb-18
Jan-18
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
-10%
Jul-17
0
60% 50%
Jun-17
-75%
Change %(RHS)
1,000
Apr-17
Feb-18
Jan-18
Dec-17
Nov-17
Oct-17
Sep-17
0
Aug-17
-25%
Jul-17
100
Jun-17
25%
May-17
200
Apr-17
75%
Mar-17
300
Clinker Inventories('000 Ton)(LHS)
1,200
May-17
125%
Mar-17
Change %(RHS)
Feb-17
Dispatches ('000 Ton)(LHS)
400
-20%
Eastern Co EasternCement Cement Change %(RHS)
6%
2,000
4%
1,500
2% 0%
1,000
-2%
500
Feb-18
Jan-18
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
-4%
Jun-17
0
10% 8%
2,500
May-17
Feb-18
Jan-18
Dec-17
-50%
Nov-17
0
Oct-17
-30%
Sep-17
50
Aug-17
-10%
Jul-17
100
Jun-17
10%
May-17
150
Apr-17
30%
Mar-17
200
Clinker Inventories('000 Ton)(LHS)
3,000
Apr-17
50%
Mar-17
Change %(RHS)
Feb-17
Dispatches ('000 Ton)(LHS)
250
-6%
Najran Cement 55%
3,200
-2%
2,700
Feb-18
-6%
Jan-18
-4%
2,500
Dec-17
2,600
Nov-17
-65%
0%
2,800
Oct-17
Feb-18
Jan-18
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
-45%
2%
2,900
Sep-17
50
4%
3,000
Aug-17
-25%
8% 6%
Jul-17
-5%
100
Change %(RHS)
3,100
Jun-17
15%
Clinker Inventories('000 Ton)(LHS)
May-17
35%
150
0
3,300
Apr-17
200
75%
Mar-17
Change %(RHS)
Feb-17
Dispatches ('000 Ton)(LHS)
250
Northern Cement 60%
1,200
40%
1,000
20%
800
20%
0%
600
-20%
400
10%
-40%
200
-60%
0
40% 35% 30% 25% 15% 5% 0%
Feb-18
Jan-18
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
-5%
Apr-17
Feb-18
Jan-18
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
0
Mar-17
50
Change %(RHS)
1,400
May-17
100
Clinker Inventories('000 Ton)(LHS)
80%
Mar-17
Change %(RHS)
Feb-17
Dispatches ('000 Ton)(LHS)
150
-10%
AlJouf Cement
1,150
0%
1,050
-2%
1,000
Feb-18
Jan-18
Dec-17
900
Nov-17
-40%
-4%
Oct-17
950
Sep-17
-20%
6%
2%
1,100
Aug-17
Feb-18
Jan-18
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
20
Change %(RHS)
4%
Jul-17
0%
40
5
40% 20%
60
0
1,200
Jun-17
80
60%
Apr-17
100
Clinker Inventories('000 Ton)(LHS)
1,250
May-17
120
80%
Mar-17
Change %(RHS)
140
Feb-17
Dispatches ('000 Ton)(LHS)
160
-6%
Source: Yamamah Cement Company, AlJazira Research
© All rights reserved
Cement Dispatches for February 2018 March 2018 Saudi Cement Sector | Monthly Report | February 2018
Please read Disclaimer on the back
Dispatches & Change Tabuk Cement
0
-4%
Feb-18
-100%
-2%
200
Jan-18
Feb-18
Jan-18
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
0
0%
400
Dec-17
-50%
20
2%
600
Nov-17
40
4%
Oct-17
0%
Sep-17
60
6%
800
Aug-17
80
8%
1,000
Jul-17
50%
12% 10%
1,200
Jun-17
100
Change %(RHS)
1,400
Apr-17
100%
Clinker Inventories('000 Ton)(LHS)
1,600
May-17
120
150%
Mar-17
Change %(RHS)
Feb-17
Dispatches ('000 Ton)(LHS)
140
-6%
City Co CityCement Cement 50%
15% 10%
-10%
0
-15%
Sep-17
-70%
Feb-18
-5%
200
Jan-18
400
Dec-17
0%
-30%
Nov-17
5%
600
Oct-17
800
Aug-17
10%
Jul-17
Feb-18
Jan-18
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
0
Mar-17
100
20%
1,000
Jun-17
200
Change %(RHS)
1,200
Apr-17
300
Clinker Inventories('000 Ton)(LHS)
1,400
May-17
400
90%
Mar-17
Change %(RHS)
Feb-17
Dispatches ('000 Ton)(LHS)
500
Hail Cement
0%
-1%
Feb-18
0
Jan-18
-60%
1%
500
Dec-17
Feb-18
Jan-18
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
-40%
2%
1,000
Nov-17
20
3%
Oct-17
-20%
4%
1,500
Sep-17
40
5%
Aug-17
0%
6%
2,000
Jul-17
20%
60
8% 7%
Jun-17
80
Change %(RHS)
2,500
May-17
40%
Clinker Inventories('000 Ton)(LHS)
3,000
Apr-17
60%
100
0
100% 80%
120
Mar-17
Change %(RHS)
Feb-17
Dispatches ('000 Ton)(LHS)
140
-2%
Riyadh Cement
-4%
600
-6%
400
-8%
Feb-18
Jan-18
Dec-17
0
Nov-17
200
Oct-17
Feb-18
Jan-18
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
-55%
May-17
0
Apr-17
-35%
Mar-17
50
800
Sep-17
-15%
100
-2%
1,000
Aug-17
5%
150
0%
1,200
Jul-17
25%
200
4% 2%
1,400
Jun-17
250
Change %(RHS)
1,600
Apr-17
45%
Clinker Inventories('000 Ton)(LHS)
1,800
May-17
300
65%
Mar-17
Change %(RHS)
Feb-17
Dispatches ('000 Ton)(LHS)
350
-10%
Safwa Cement
700
25% 20% 15%
500
10%
400
5%
300
0%
200
Feb-18
Jan-18
Dec-17
Nov-17
Oct-17
Sep-17
-5%
Aug-17
-60%
30%
600
100 0
40% 35%
Jul-17
Feb-18
Jan-18
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
-40%
Change %(RHS)
800
Jun-17
-20%
50
6
20% 0%
100
0
40%
900
May-17
150
Clinker Inventories('000 Ton)(LHS)
1,000
Apr-17
200
60%
Mar-17
Change %(RHS)
Feb-17
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 February-2018 stood at 3.63mn tons, compared to 4.09mn tons in February-2017, depicting a decline of 11.1%YoY. Clinker inventory showed an increase of 1.29% MoM, and 23.7%YoY. For 2M-2018, Cement dispatches stood at 7.71mn tons compared to 8.93mn tons in 2017, depicting a decline of 13.7%. Sales / clinker production ratio stood at 109.4% for the month, where Riyadh cement registered the highest ratio at 214.4%. Change in Cement Dispatches
Source: Yamama Cement, AlJazira Capital
5,000
Change %(RHS)
Dispatches (1000 Ton)(LHS)
80%
-40%
1,500
-60%
Oct-17
Sep-17
Utilization Rate (TTM)
Feb-18
2,000
Jan-18
-20%
Dec-17
2,500
Nov-17
0%
Aug-17
3,000
Jul-17
20%
Jun-17
3,500
May-17
40%
Apr-17
4,000
Mar-17
60%
Feb-17
4,500
11.1%YoY.
The total Utilization rate of Saudi
70.0%
cement sector declined to 65.5% in February 2018 compared to
71.4%
69.2%
69.4%
68.7%
68.1%
75.6% in February 2017.
67.6%
67.0%
66.6%
Dec-17
72.8%
Nov-17
74.3%
Oct-17
75.6%
a decline of 11.0% MoM, and
Source: Yamama Cement, AlJazira Capital
80.0% 75.0%
Cement dispatches showed
65.0%
65.5%
65.5%
Change in Clinker Inventories
Feb-18
Jan-18
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
55.0%
Feb-17
60.0%
Source: Yamama Cement, AlJazira Capital
36,500
10.0% 8.0% 6.0%
31,000
25,500
Clinker Inventories showed an increase of 1.29%MoM and stood
4.0%
at 35.63MT compared to 35.18MT
2.0%
in January 2018.
0.0%
1
Jan-18
Feb-18
Change %(RHS)
Dec-17
Oct-17
Nov-17
Total Invetories (1000 Ton)(LHS)
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
20,000
Feb-17
-2.0% -4.0%
Analyst
Waleed Al-jubayr +966 11 2256146 [email protected]
© All rights reserved
Cement Dispatches for February 2018 March 2018 Saudi Cement Sector | Monthly Report | February 2018
Cement Dispatches for February 2018
Please read Disclaimer on the back
Source: Yamama Cement , AlJazira Capital 25.0%
500
15.0%
400
5.0%
300
100
of 74.0%YoY and 17.9%YoY,
-25.0%
Riyadh cement showed the
Feb-17 - LHS
Feb-18 - LHS
Hail
AlJouf
Tabuk
Northern
United
Umm AlQura
AlSafwa
Riyadh
Najran
Eastern
City
Yamamah
Qassim
Arabian
Southern
Yanbu
Saudi
-35.0%
0
-45.0%
20.0% 10.0%
800
0.0%
600
-10.0% -20.0%
400
-30.0%
200
Hail
Tabuk
AlJouf
Northern
United
AlSafwa
Umm AlQura
2M-2018-LHS
Najran
Riyadh
Eastern
City
Yamamah
Qassim
Arabian
Southern
Yanbu
Saudi
-40.0% -50.0%
Source: Yamama Cement , AlJazira Capital
Riyadh and Najran cement showed
220.0%
the highest cement sales / clinker
180.0%
production ratio of 214.4% and
140.0%
192.9% respectively. On the other
100.0%
hand, Hail cement and Tabuk cement showed a cement sales/
60.0%
Clinker Inventories – February 2018
Hail
Tabuk
Southern
Umm AlQura
Yamamah
Qassim
Eastern
United
Saudi
AlSafwa
Yanbu
Arabian
AlJouf
Northern
City
Najran
Riyadh
clinker production ratio of 60.8%
Sales / Production
400.0%
350.0%
4500
300.0%
3750
250.0%
3000
200.0% 150.0%
2250
100.0%
1500
50.0%
750
© All rights reserved
United
AlSafwa
City
Arabian
Riyadh
Northern
YoY Change (%) -RHS
Umm AlQura
Feb-18 - LHS
AlJouf
Tabuk
Qassim
Eastern
Hail
Najran
Southern
Yanbu
Yamamah
Saudi
0.0%
Feb-17 - LHS
and 71.9% respectively.
Source: Yamama Cement , AlJazira Capital
5250
2
For 2M-2018, Umm AlQura cement showed the highest increase of 27.1%, followed by Hail cement with increase of 15.2%. While Riyadh cement and Yamama cement showed a decline of 39.7%YoY and 32.3%YoY respectively.
YoY Change (%) -RHS
Sales / Production for 2M-2018
0
followed by Yamama cement with decline of 36.4%YoY.
30.0%
1,000
20.0%
highest decline of 40.8%YoY,
Source: Yamama Cement , AlJazira Capital
1,200
2M-2017- LHS
respectively. On the other hand,
YoY Change (%) -RHS
Cement Dispatches for 2M-2018
0
showed the highest increase
-5.0%
-15.0%
200
Umm AlQura and Hail cement
-50.0%
Arabian cement showed the highest increase of 207.6%YoY in its inventory level, followed by Umm AlQura cement which showed an increase of 200.7%YoY. On the other hand, Riyadh and City cement showed a decline in the inventory level by 35.1%YoY and 20.3%YoY respectively.
Cement Dispatches for February 2018 March 2018 Saudi Cement Sector | Monthly Report | February 2018
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Market Share – February 2018
Source: Yamama Cement , AlJazira Capital Yamama and Saudi cement
14.0% 12.0% 10.0% 8.0% 6.0% 4.0%
Market Share TTM
United
Hail
AlSafwa
AlJouf
Northern
City
Najran
Riyadh
Market Share February-18 - LHS
Umm AlQura
Market Share February-17 - LHS
Tabuk
Southern
Arabian
Yanbu
Qassim
Eastern
Saudi
0.0%
Yamamah
2.0%
2.5% 2.0% 1.5% 1.0% 0.5% 0.0% -0.5% -1.0% -1.5% -2.0% -2.5% -3.0%
YoY Change - RHS
recorded the highest market share, in February 2018, of 12.7% and 12.5%, respectively. While United cement, recorded the lowest market share of 2.7%. Saudi cement increased its market share from 10.5% to 12.5%YoY, while Arabian cement market share decline from 7.6% to 6.2%YoY.
Source: Yamama Cement , AlJazira Capital
Yanbu
Southern
Saudi
Yamamah
Qassim
Arabian
City
Riyadh
Eastern
AlSafwa
Najran
United
AlJouf
Northern
Umm AlQura
Tabuk
2.6%
2.3%
2.3%
2.8%
2.9%
On TTM basis, Southern and
11.8%
Yanbu cement recorded the
3.7%
highest market share of 11.8%
11.2%
3.8%
and 11.2% followed by Saudi
3.8% 4.7%
7.0%
Hail
11.0%
8.7% 7.6%
EV / Ton (in ‘000 SAR)
cement with market share of
11.0%
5.6%
8.1%
Source: Bloomberg, Yamama Cement , AlJazira Capital
1300.0 1150.0
AlJouf cement recorded the
1000.0
850.0
highest EV/Ton of SAR 1230.8,
700.0
followed by Saudi cement with
550.0
EV/Ton of SAR 996.7; whereas
400.0 250.0
P/E & P/BV
EV/Ton
Source: TADAWUL , AlJazira Capital. *Najran and Tabuk cement P/E were omitted. 3.00
35.00
2.50
30.00 25.00
2.00
20.00
1.50
15.00
1.00
© All rights reserved
Najran
Tabuk
Northern
AlJouf
Hail
P/BV (RHS)
Umm AlQura
P/E (LHS)
Yamamah
Arabian
City
Southern
Yanbu
Qassim
Saudi
Eastern
10.00 5.00
lowest EV/Ton of SAR 387.5.
Sector EV/Ton
40.00
3
AlJouf
Saudi
Tabuk
Arabian
Northern
Southern
Qassim
Yanbu
Umm AlQura
Hail
Eastern
Yamamah
City
Najran cement recorded the Najran
100.0
0.50
Eastern Cement recorded the lowest P/E of 14.07x, followed by Saudi cement with P/E of 14.33x. On the other hand, Najran cement recorded the highest P/E of 343.62. Furthermore, Najran cement recorded the lowest P/ BV of 0.78x, while Saudi cement recorded the highest P/BV of 2.75x.
Cement Dispatches for February 2018 March 2018 Saudi Cement Sector | Monthly Report | February 2018
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Dispatches & Change Yamama Cement 6,000
55%
5,000
-4%
Feb-18
Jan-18
Dec-17
Nov-17
-6%
Oct-17
Feb-18
Jan-18
Dec-17
Nov-17
Jun-17
Oct-17
0
Sep-17
-65%
Aug-17
0
Jul-17
1,000
May-17
-45%
Apr-17
100
Mar-17
-2%
2,000
Sep-17
-25%
0%
Aug-17
200
2%
3,000
Jul-17
-5%
8% 4%
4,000
Jun-17
15%
300
Change %(RHS)
6%
May-17
35%
400
Clinker Inventories('000 Ton)(LHS)
Apr-17
500
75%
Mar-17
Change %(RHS)
Feb-17
Dispatches ('000 Ton)(LHS)
600
-8%
Saudi Co SaudiCement Cement
-15%
4,700 4,600
Feb-18
Jan-18
1,800
Dec-17
80%
Nov-17
4,400
Oct-17
4,500
-55%
Sep-17
Feb-18
Jan-18
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
4,800
Aug-17
-35%
100 0
4,900
Jul-17
200
5,000
5%
Jun-17
300
Change %(RHS)
5,100
May-17
25%
400
Clinker Inventories('000 Ton)(LHS)
5,200
Apr-17
500
45%
Mar-17
Change %(RHS)
Feb-17
Dispatches ('000 Ton)(LHS)
600
6% 5% 4% 3% 2% 1% 0% -1% -2% -3% -4% -5%
Qassim Cement
0%
200 0
Feb-18
-60%
400
Jan-18
Feb-18
Jan-18
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
0
5%
600
Dec-17
-40%
50
10%
800
Oct-17
-20%
100
1,000
Nov-17
0%
150
15%
1,200
Sep-17
20%
200
25% 20%
Aug-17
250
Change %(RHS)
1,400
Jul-17
40%
Jun-17
300
May-17
60%
Apr-17
350
Clinker Inventories('000 Ton)(LHS)
1,600
Mar-17
Change %(RHS)
Feb-17
Dispatches ('000 Ton)(LHS)
400
-5%
Souhtern Cement Dispatches ('000 Ton)(LHS)
600
Change %(RHS)
90%
Change %(RHS)
3,000
500 40%
400 300
-10%
200 100
10%
2,000
5%
1,500
0%
1,000
-5%
Feb-18
Jan-18
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
3,500
Jun-17
50%
May-17
4,500
Apr-17
90%
Mar-17
0
Feb-17
Feb-18
Jan-18
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
-60%
20% 15%
2,500
500
Mar-17
0
Clinker Inventories('000 Ton)(LHS)
3,500
-10%
Yanbu Cement
4
1,000
-5%
Feb-18
Jan-18
0
Dec-17
500
Nov-17
-70%
0%
1,500
Oct-17
Feb-18
Jan-18
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
0
Mar-17
100
5%
2,000
Sep-17
-30%
2,500
Aug-17
200
20%
10%
3,000
Jul-17
10%
Jun-17
300
Apr-17
400
Change %(RHS)
15%
May-17
500
Clinker Inventories('000 Ton)(LHS)
4,000
Mar-17
Change %(RHS)
Feb-17
Dispatches ('000 Ton)(LHS)
600
-10%
Source: Yamamah Cement Company, AlJazira Research
© All rights reserved
Cement Dispatches for February 2018 March 2018 Saudi Cement Sector | Monthly Report | February 2018
Please read Disclaimer on the back
Dispatches & Change Arabian Cement
40%
800
30%
600
20% 10%
400
0%
200
Feb-18
Jan-18
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
-10%
Jul-17
0
60% 50%
Jun-17
-75%
Change %(RHS)
1,000
Apr-17
Feb-18
Jan-18
Dec-17
Nov-17
Oct-17
Sep-17
0
Aug-17
-25%
Jul-17
100
Jun-17
25%
May-17
200
Apr-17
75%
Mar-17
300
Clinker Inventories('000 Ton)(LHS)
1,200
May-17
125%
Mar-17
Change %(RHS)
Feb-17
Dispatches ('000 Ton)(LHS)
400
-20%
Eastern Co EasternCement Cement Change %(RHS)
6%
2,000
4%
1,500
2% 0%
1,000
-2%
500
Feb-18
Jan-18
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
-4%
Jun-17
0
10% 8%
2,500
May-17
Feb-18
Jan-18
Dec-17
-50%
Nov-17
0
Oct-17
-30%
Sep-17
50
Aug-17
-10%
Jul-17
100
Jun-17
10%
May-17
150
Apr-17
30%
Mar-17
200
Clinker Inventories('000 Ton)(LHS)
3,000
Apr-17
50%
Mar-17
Change %(RHS)
Feb-17
Dispatches ('000 Ton)(LHS)
250
-6%
Najran Cement 55%
3,200
-2%
2,700
Feb-18
-6%
Jan-18
-4%
2,500
Dec-17
2,600
Nov-17
-65%
0%
2,800
Oct-17
Feb-18
Jan-18
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
-45%
2%
2,900
Sep-17
50
4%
3,000
Aug-17
-25%
8% 6%
Jul-17
-5%
100
Change %(RHS)
3,100
Jun-17
15%
Clinker Inventories('000 Ton)(LHS)
May-17
35%
150
0
3,300
Apr-17
200
75%
Mar-17
Change %(RHS)
Feb-17
Dispatches ('000 Ton)(LHS)
250
Northern Cement 60%
1,200
40%
1,000
20%
800
20%
0%
600
-20%
400
10%
-40%
200
-60%
0
40% 35% 30% 25% 15% 5% 0%
Feb-18
Jan-18
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
-5%
Apr-17
Feb-18
Jan-18
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
0
Mar-17
50
Change %(RHS)
1,400
May-17
100
Clinker Inventories('000 Ton)(LHS)
80%
Mar-17
Change %(RHS)
Feb-17
Dispatches ('000 Ton)(LHS)
150
-10%
AlJouf Cement
1,150
0%
1,050
-2%
1,000
Feb-18
Jan-18
Dec-17
900
Nov-17
-40%
-4%
Oct-17
950
Sep-17
-20%
6%
2%
1,100
Aug-17
Feb-18
Jan-18
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
20
Change %(RHS)
4%
Jul-17
0%
40
5
40% 20%
60
0
1,200
Jun-17
80
60%
Apr-17
100
Clinker Inventories('000 Ton)(LHS)
1,250
May-17
120
80%
Mar-17
Change %(RHS)
140
Feb-17
Dispatches ('000 Ton)(LHS)
160
-6%
Source: Yamamah Cement Company, AlJazira Research
© All rights reserved
Cement Dispatches for February 2018 March 2018 Saudi Cement Sector | Monthly Report | February 2018
Please read Disclaimer on the back
Dispatches & Change Tabuk Cement
0
-4%
Feb-18
-100%
-2%
200
Jan-18
Feb-18
Jan-18
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
0
0%
400
Dec-17
-50%
20
2%
600
Nov-17
40
4%
Oct-17
0%
Sep-17
60
6%
800
Aug-17
80
8%
1,000
Jul-17
50%
12% 10%
1,200
Jun-17
100
Change %(RHS)
1,400
Apr-17
100%
Clinker Inventories('000 Ton)(LHS)
1,600
May-17
120
150%
Mar-17
Change %(RHS)
Feb-17
Dispatches ('000 Ton)(LHS)
140
-6%
City Co CityCement Cement 50%
15% 10%
-10%
0
-15%
Sep-17
-70%
Feb-18
-5%
200
Jan-18
400
Dec-17
0%
-30%
Nov-17
5%
600
Oct-17
800
Aug-17
10%
Jul-17
Feb-18
Jan-18
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
0
Mar-17
100
20%
1,000
Jun-17
200
Change %(RHS)
1,200
Apr-17
300
Clinker Inventories('000 Ton)(LHS)
1,400
May-17
400
90%
Mar-17
Change %(RHS)
Feb-17
Dispatches ('000 Ton)(LHS)
500
Hail Cement
0%
-1%
Feb-18
0
Jan-18
-60%
1%
500
Dec-17
Feb-18
Jan-18
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
-40%
2%
1,000
Nov-17
20
3%
Oct-17
-20%
4%
1,500
Sep-17
40
5%
Aug-17
0%
6%
2,000
Jul-17
20%
60
8% 7%
Jun-17
80
Change %(RHS)
2,500
May-17
40%
Clinker Inventories('000 Ton)(LHS)
3,000
Apr-17
60%
100
0
100% 80%
120
Mar-17
Change %(RHS)
Feb-17
Dispatches ('000 Ton)(LHS)
140
-2%
Riyadh Cement
-4%
600
-6%
400
-8%
Feb-18
Jan-18
Dec-17
0
Nov-17
200
Oct-17
Feb-18
Jan-18
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
-55%
May-17
0
Apr-17
-35%
Mar-17
50
800
Sep-17
-15%
100
-2%
1,000
Aug-17
5%
150
0%
1,200
Jul-17
25%
200
4% 2%
1,400
Jun-17
250
Change %(RHS)
1,600
Apr-17
45%
Clinker Inventories('000 Ton)(LHS)
1,800
May-17
300
65%
Mar-17
Change %(RHS)
Feb-17
Dispatches ('000 Ton)(LHS)
350
-10%
Safwa Cement
700
25% 20% 15%
500
10%
400
5%
300
0%
200
Feb-18
Jan-18
Dec-17
Nov-17
Oct-17
Sep-17
-5%
Aug-17
-60%
30%
600
100 0
40% 35%
Jul-17
Feb-18
Jan-18
Dec-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
-40%
Change %(RHS)
800
Jun-17
-20%
50
6
20% 0%
100
0
40%
900
May-17
150
Clinker Inventories('000 Ton)(LHS)
1,000
Apr-17
200
60%
Mar-17
Change %(RHS)
Feb-17
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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