Cement Dispatches for November 2017 - Aljazira Capital
Cement Dispatches for November 2017 December 2017 Saudi Cement Sector | Monthly Report | November 2017
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Cement dispatches: Cement dispatches for the month of November-2017 stood at 3.80mn tons, compared to 4.22mn tons in November-2016, depicting a decline of 9.87%YoY, and a decline of 7.43%MoM. Clinker inventory continued to increase and stood at 35.59mn ton, depicting an increase of 28.6%YoY and 1.32%MoM. For 11M-2017, cement dispatches stood at 43.15mn ton compared to 51.29mn ton in 11M-2016, depicting a decline of 15.86%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%
by 7.43%MoM, standing at 3.80MT compared to 4.10MT in October 2017.
0%
3,000
Utilization Rate (TTM)
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
Dec-16
May-17
-60%
Apr-17
1,500
Mar-17
-40%
Feb-17
2,000
Jan-17
-20%
Nov-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%
67.0%
in
November
2017 compared to 80.9% in 68.7%
68.1%
67.6%
67.0%
Nov-17
74.3%
Oct-17
75.0%
Saudi cement sector declined 75.6%
Sep-17
77.6%
Aug-17
79.0%
Jul-17
80.9%
Jun-17
80.0%
Cement dispatches declined
November 2016.
65.0%
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Dec-16
55.0%
Nov-16
60.0%
Change in Clinker Inventories
Source: Yamama Cement, AlJazira Capital
36,500
10% 8% 6%
31,000
4% 2%
25,500
0%
Clinker Inventories showed an increase of 1.32%MoM and stood at 35.59MT compared to 35.13MT in October 2017.
1
Oct-17
Nov-17
Change %(RHS)
Sep-17
Aug-17
Jul-17
Jun-17
Total Invetories (1000 Ton)(LHS)
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Dec-16
20,000
Nov-16
-2% -4%
Analyst
Waleed Al-jubayr +966 11 2256146 [email protected]
© All rights reserved
Cement Dispatches for November 2017 December 2017 Saudi Cement Sector | Monthly Report | November 2017
Cement Dispatches for November 2017
Please read Disclaimer on the back
Source: Yamama Cement , AlJazira Capital
700
23.0%
600 500 400 300 200
3.0%
highest increase by 16.8%YoY,
-17.0%
and
-37.0% -57.0%
Northern
Tabuk
Hail
Umm AlQura
AlJouf
AlSafwa
Najran
Nov-17 - LHS
United Cement
Nov-16 - LHS
Riyadh
Eastern
Arabian
City
Yamamah
Qassim
Yanbu
Southern
0
Saudi
100
Hail
Tabuk
Northern
Yamamah
Umm AlQura
YoY Change (%) -RHS
AlJouf
-50.0%
Najran
-40.0%
0
United Cement
1,000
AlSafwa
-30.0%
Eastern
2,000
Riyadh
-20.0%
City
-10.0%
3,000
Arabian
0.0%
4,000
Qassim
5,000
Saudi
10.0%
Yanbu
While Yanbu cement declined the
most
by
48.0%YoY,
26.3%YoY, respectively.
20.0%
Southern
by
7.1%YoY.
Source: Yamama Cement , AlJazira Capital
Sales / Production for 11M-2017
For 11M-2017, city cement was the only company to show growth (10.6%YoY). While Najran cement and Northern cement showed a decline of 42.3%YoY and 40.7%YoY respectively.
Source: Yamama Cement , AlJazira Capital
Riyadh cement and United
140.0%
cement showed the highest
120.0%
cement
100.0%
sales
/
clinker
production ratio of 131.0%
80.0%
and
60.0%
On the other hand, Hail
116.8%
respectively.
Hail
Umm AlQura
Northern
AlSafwa
Eastern
Tabuk
Southern
Yanbu
Najran
Arabian
Yamamah
Saudi
Qassim
AlJouf
City
United Cement
cement and Umm AlQura Riyadh
40.0%
Sales / Production
Clinker Inventories
cement showed a cement sales/
clinker
production
ratio of 54.7% and 66.0% respectively.
Source: Yamama Cement , AlJazira Capital
5250
170.0%
4500
140.0%
AlSafwa cement showed the
3750
110.0%
highest increase of 171.1%YoY in
3000
80.0%
2250
50.0%
its inventory level, followed by
1500
20.0%
© All rights reserved
United Cement
Arabian
AlSafwa
City
AlJouf
Riyadh
YoY Change (%) -RHS
Umm AlQura
November-17- LHS
Northern
Tabuk
Qassim
Hail
Eastern
Southern
Najran
-40.0%
Yanbu
0
Yamamah
-10.0%
Saudi
750
November-16- LHS
2
cement and
decline of 29.0%YoY and
6,000
11M-17- LHS
Tabuk
12.7%YoY
and Yamamah cement with
7,000
11M-16- LHS
followed by Qassim cement
followed by Riyadh cement
YoY Change (%) -RHS
Cement Dispatches for 11M-2017
Hail cement showed the
Southern cement which showed an increase of 84.6%YoY. On the other hand, Riyadh and City cement showed a decline in the inventory level by 24.8%YoY and 12.7%YoY respectively.
Cement Dispatches for November 2017 December 2017 Saudi Cement Sector | Monthly Report | November 2017
Market Share – November 2017
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Source: Yamama Cement , AlJazira Capital Southern and Saudi cement
17.0%
4.5%
15.0%
2.5%
13.0%
0.5%
11.0% 9.0%
-1.5%
7.0%
-3.5%
5.0%
-5.5%
Northern
-7.5%
YoY Change - RHS
Market Share November-17- LHS
Market Share TTM
Tabuk
Hail
Umm AlQura
AlJouf
AlSafwa
Najran
United Cement
Market Share November-16- LHS
Riyadh
Eastern
Arabian
City
Yamamah
Qassim
Yanbu
Saudi
1.0%
Southern
3.0%
recorded the highest market share, in November 2017, of 12.6% and 10.2% (decline from 12.3%), respectively. While Northern cement, recorded the lowest market share of 2.7%. City cement increased its market share from 5.6% to 7.5%, while Yanbu market share decline from 16.4% to 9.4%.
Source: Yamama Cement , AlJazira Capital 2.4%
Yanbu
Southern
Saudi
Yamamah
Qassim
Arabian
City
Riyadh
Eastern
AlSafwa
Najran
United Cement
AlJouf
Northern
Umm AlQura
Tabuk
3.0%
2.3% 2.2%
2.4%
On TTM basis, Yanbu and
11.9%
3.4%
Southern cement recorded
3.7%
the highest market share of
11.6%
3.8%
11.9% and 11.6% followed
4.7%
7.2%
Hail
by Saudi cement with market
10.8%
6.0%
9.1% 7.6%
EV / Ton (in ‘000 SAR)
share of 10.8%
8.0%
Source: Bloomberg, Yamama Cement , AlJazira Capital
1150.0 1000.0
Aljouf cement recorded the
850.0
EV/Ton
AlJouf
Tabuk
Northern
Arabian
Southern
Saudi
Qassim
Umm AlQura
Hail
Yanbu
On the other hand, Najran
100.0
Eastern
with EV/Ton of SAR 1109.7.
250.0
Yamamah
followed by Tabuk cement
400.0
City
highest EV/Ton of SAR 1153.2,
550.0
Najran
700.0
Source: TADAWUL , AlJazira Capital
45.00
Saudi Cement recorded the
35.00 25.00
2.50
lowest P/E of 11.52x, followed
2.00
by Eastern 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
Qassim
Yanbu
Eastern
Saudi
1.00
P/E (LHS)
3
EV/Ton of SAR 420.0.
Sector EV/Ton
P/E & P/BV
5.00
cement recorded the lowest
0.50
of 12.82x. On the other hand, Najran cement recorded the highest P/E of 346.5. Najran cement recorded the lowest P/BV of 0.79x, while Qassim cement recorded the highest P/BV of 2.29x.
Cement Dispatches for November 2017 December 2017 Saudi Cement Sector | Monthly Report | November 2017
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Dispatches & Change Yamama Cement
-4%
Nov-17
Oct-17
Sep-17
Aug-17
-6%
Jul-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
-60%
Jun-17
-40%
100
0% -2%
May-17
-20%
200
2%
Apr-17
0%
300
8% 4%
Mar-17
5,200
20%
Change %(RHS)
6%
Feb-17
60%
40%
400
Clinker Inventories('000 Ton)(LHS)
Jan-17
-80%
5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0
60%
500
0
80%
Dec-16
Change %(RHS)
Nov-16
Dispatches ('000 Ton)(LHS)
600
-8%
Saudi Co SaudiCement Cement 4% 3%
4,900
2%
4,800
1%
4,700
0%
4,600
-1%
4,500
-2%
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
4,400 4,300
6% 5%
Feb-17
-60%
Change %(RHS)
5,000
Jan-17
Nov-17
Oct-17
Sep-17
0
Aug-17
-40%
Jul-17
100
Jun-17
200
-20%
May-17
0%
Apr-17
300
Mar-17
20%
Feb-17
400
Jan-17
40%
Dec-16
500
Clinker Inventories('000 Ton)(LHS)
5,100
Dec-16
Change %(RHS)
Nov-16
Dispatches ('000 Ton)(LHS)
600
-3% -4%
Qassim Cement
-60%
0%
400
-5%
200 0
Nov-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
-40%
Oct-17
100
5%
600
Aug-17
-20%
10%
800
Sep-17
0%
1,000
Jul-17
200
15%
1,200
Jun-17
20%
May-17
300
20%
1,400
Apr-17
40%
Change %(RHS) 25%
1,600
Mar-17
400
Clinker Inventories('000 Ton)(LHS)
1,800
Feb-17
60%
Jan-17
80%
Dec-16
Change %(RHS)
Nov-16
Dispatches ('000 Ton)(LHS)
500
-10%
Souhtern Cement
-10%
Nov-17
0
Oct-17
-5%
Sep-17
0%
500
Aug-17
-100%
1,000
Jul-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
5%
Jun-17
-50%
100
10%
1,500
May-17
200
2,000
Apr-17
0%
300
20% 15%
Mar-17
400
Change %(RHS)
2,500
Feb-17
50%
Clinker Inventories('000 Ton)(LHS)
3,000
Jan-17
500
100%
Dec-16
Change %(RHS)
Nov-16
Dispatches ('000 Ton)(LHS)
600
Yanbu Cement
4
100%
4,500
600
50%
3,500
400
0%
Change %(RHS)
15%
3,000
10%
2,500
5%
2,000
0%
1,500
-5%
1,000
-10%
Nov-17
Oct-17
Sep-17
Jul-17
Aug-17
Jun-17
May-17
Apr-17
Mar-17
Feb-17
500 0
25% 20%
Jan-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
-100%
Feb-17
0
Jan-17
-50%
Dec-16
200
Clinker Inventories('000 Ton)(LHS)
4,000
Dec-16
Change %(RHS)
Nov-16
Dispatches ('000 Ton)(LHS)
800
-15%
Source: Yamamah Cement Company, AlJazira Research
© All rights reserved
Cement Dispatches for November 2017 December 2017 Saudi Cement Sector | Monthly Report | November 2017
Please read Disclaimer on the back
Dispatches & Change Arabian Cement 800
50%
600
0%
400
-50%
200
-10%
0
-30%
40% 30% 20% 10% 0%
Nov-17
Oct-17
Aug-17
Sep-17
Jul-17
Jun-17
Apr-17
-20%
May-17
-100%
60% 50%
Mar-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
Feb-17
Jan-17
0
Dec-16
100
100%
Feb-17
200
Change %(RHS)
1,000
Jan-17
300
Clinker Inventories('000 Ton)(LHS)
150%
Dec-16
Change %(RHS)
Nov-16
Dispatches ('000 Ton)(LHS)
400
Eastern Co EasternCement Cement
Nov-17
Oct-17
Sep-17
Aug-17
Jan-17
Dec-16
-4%
Jul-17
0
0% -2%
Jun-17
500
-60%
2%
May-17
-40%
0
4%
Apr-17
50
10% 6%
Mar-17
1,000
Change %(RHS)
8%
Feb-17
-20%
Clinker Inventories('000 Ton)(LHS)
Jan-17
100
Nov-17
1,500
Oct-17
0%
Sep-17
150
Aug-17
2,000
Jul-17
20%
Jun-17
200
May-17
2,500
Apr-17
250
Mar-17
3,000
40%
Feb-17
60%
Dec-16
Change %(RHS)
Nov-16
Dispatches ('000 Ton)(LHS)
300
-6%
Najran Cement 3,300
60%
3,200
40%
3,100
-6%
Nov-17
-4%
2,500
Oct-17
2,600
Sep-17
-80%
2,700
Aug-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
-60%
-2%
Jul-17
50
0%
2,800
Jun-17
-40%
2%
2,900
May-17
-20%
0%
Apr-17
100
8% 4%
3,000
Mar-17
20%
Change %(RHS)
6%
Feb-17
150
Clinker Inventories('000 Ton)(LHS)
Jan-17
200
80%
Dec-16
Change %(RHS)
Nov-16
Dispatches ('000 Ton)(LHS)
250
Northern Cement
Nov-17
Oct-17
-20%
Sep-17
-10%
0
Aug-17
200
Jul-17
-100%
0%
400
Jun-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
-50%
10%
600
May-17
50
20%
800
Apr-17
0%
40% 30%
1,000
Mar-17
100
Change %(RHS)
1,200
Feb-17
50%
Clinker Inventories('000 Ton)(LHS)
1,400
Jan-17
100%
Dec-16
Change %(RHS)
Nov-16
Dispatches ('000 Ton)(LHS)
150
AlJouf Cement
5
950
-40%
900
-6% -8%
Nov-17
-20%
-4%
Oct-17
1,000
Sep-17
0%
0% -2%
Aug-17
1,050
Jul-17
20%
6% 2%
Jun-17
1,100
May-17
40%
Change %(RHS)
4%
Apr-17
1,150
Mar-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
Feb-17
Jan-17
0
Dec-16
50
60%
Clinker Inventories('000 Ton)(LHS)
Feb-17
100
1,200
Jan-17
150
80%
Dec-16
Change %(RHS)
Nov-16
Dispatches ('000 Ton)(LHS)
200
-10%
Source: Yamamah Cement Company, AlJazira Research
© All rights reserved
Cement Dispatches for November 2017 December 2017 Saudi Cement Sector | Monthly Report | November 2017
Please read Disclaimer on the back
Dispatches & Change Tabuk Cement
0%
600
4%
800
2% 0%
400
-2%
200
Nov-17
Oct-17
1,400
Aug-17
100%
-4%
Sep-17
0
Jul-17
-100%
Jun-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
20
6%
May-17
-50%
8%
Apr-17
40
50%
1,000
12% 10%
1,200
Mar-17
60
Change %(RHS)
1,400
Feb-17
80
Clinker Inventories('000 Ton)(LHS)
1,600
Jan-17
100%
100
0
150%
Dec-16
Change %(RHS)
120
Nov-16
Dispatches ('000 Ton)(LHS)
140
-6%
City Co CityCement Cement
-15%
Aug-17
Oct-17
-10%
0
Nov-17
200
Sep-17
-5%
Jul-17
-100%
0%
400
Jun-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
Feb-17
Jan-17
0
Dec-16
100
5%
600
Apr-17
-50%
10%
800
May-17
0%
200
15%
Mar-17
300
20%
1,000
Feb-17
50%
Change %(RHS)
1,200
Jan-17
400
Clinker Inventories('000 Ton)(LHS)
Dec-16
Change %(RHS)
Nov-16
Dispatches ('000 Ton)(LHS)
500
Hail Cement
2%
Nov-17
Oct-17
-2%
Aug-17
0%
0
-100%
Sep-17
500
Jul-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
4%
1,000
Jun-17
-50%
20
6%
1,500
May-17
0%
40
12%
8%
2,000
Apr-17
60
Change %(RHS)
10%
Mar-17
50%
80
0
100%
2,500
Clinker Inventories('000 Ton)(LHS)
Feb-17
100
3,000
Jan-17
120
150%
Dec-16
Change %(RHS)
Nov-16
Dispatches ('000 Ton)(LHS)
140
Riyadh Cement Change %(RHS)
1,600
0%
1,200 1,000
-2%
800
-4%
600 400
-6%
Nov-17
Oct-17
Sep-17
Jul-17
Aug-17
Jun-17
May-17
Apr-17
-60%
Mar-17
200 0
4% 2%
1,400
Feb-17
0
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
250
Jan-17
60%
Dec-16
300
Clinker Inventories('000 Ton)(LHS)
1,800
Jan-17
80%
Dec-16
Change %(RHS)
Nov-16
Dispatches ('000 Ton)(LHS)
350
-8%
Safwa Cement
20% 15%
500
10%
400
5%
300 200
-60%
0
35% 25%
600
-40%
40% 30%
0%
-5%
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
100
Apr-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
50
Change %(RHS)
700
Mar-17
-20%
Clinker Inventories('000 Ton)(LHS)
900
Jan-17
0%
100
6
800
20%
150
0
1,000
40%
Feb-17
200
60%
Dec-16
Change %(RHS)
Nov-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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Cement dispatches: Cement dispatches for the month of November-2017 stood at 3.80mn tons, compared to 4.22mn tons in November-2016, depicting a decline of 9.87%YoY, and a decline of 7.43%MoM. Clinker inventory continued to increase and stood at 35.59mn ton, depicting an increase of 28.6%YoY and 1.32%MoM. For 11M-2017, cement dispatches stood at 43.15mn ton compared to 51.29mn ton in 11M-2016, depicting a decline of 15.86%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%
by 7.43%MoM, standing at 3.80MT compared to 4.10MT in October 2017.
0%
3,000
Utilization Rate (TTM)
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
Dec-16
May-17
-60%
Apr-17
1,500
Mar-17
-40%
Feb-17
2,000
Jan-17
-20%
Nov-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%
67.0%
in
November
2017 compared to 80.9% in 68.7%
68.1%
67.6%
67.0%
Nov-17
74.3%
Oct-17
75.0%
Saudi cement sector declined 75.6%
Sep-17
77.6%
Aug-17
79.0%
Jul-17
80.9%
Jun-17
80.0%
Cement dispatches declined
November 2016.
65.0%
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Dec-16
55.0%
Nov-16
60.0%
Change in Clinker Inventories
Source: Yamama Cement, AlJazira Capital
36,500
10% 8% 6%
31,000
4% 2%
25,500
0%
Clinker Inventories showed an increase of 1.32%MoM and stood at 35.59MT compared to 35.13MT in October 2017.
1
Oct-17
Nov-17
Change %(RHS)
Sep-17
Aug-17
Jul-17
Jun-17
Total Invetories (1000 Ton)(LHS)
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Dec-16
20,000
Nov-16
-2% -4%
Analyst
Waleed Al-jubayr +966 11 2256146 [email protected]
© All rights reserved
Cement Dispatches for November 2017 December 2017 Saudi Cement Sector | Monthly Report | November 2017
Cement Dispatches for November 2017
Please read Disclaimer on the back
Source: Yamama Cement , AlJazira Capital
700
23.0%
600 500 400 300 200
3.0%
highest increase by 16.8%YoY,
-17.0%
and
-37.0% -57.0%
Northern
Tabuk
Hail
Umm AlQura
AlJouf
AlSafwa
Najran
Nov-17 - LHS
United Cement
Nov-16 - LHS
Riyadh
Eastern
Arabian
City
Yamamah
Qassim
Yanbu
Southern
0
Saudi
100
Hail
Tabuk
Northern
Yamamah
Umm AlQura
YoY Change (%) -RHS
AlJouf
-50.0%
Najran
-40.0%
0
United Cement
1,000
AlSafwa
-30.0%
Eastern
2,000
Riyadh
-20.0%
City
-10.0%
3,000
Arabian
0.0%
4,000
Qassim
5,000
Saudi
10.0%
Yanbu
While Yanbu cement declined the
most
by
48.0%YoY,
26.3%YoY, respectively.
20.0%
Southern
by
7.1%YoY.
Source: Yamama Cement , AlJazira Capital
Sales / Production for 11M-2017
For 11M-2017, city cement was the only company to show growth (10.6%YoY). While Najran cement and Northern cement showed a decline of 42.3%YoY and 40.7%YoY respectively.
Source: Yamama Cement , AlJazira Capital
Riyadh cement and United
140.0%
cement showed the highest
120.0%
cement
100.0%
sales
/
clinker
production ratio of 131.0%
80.0%
and
60.0%
On the other hand, Hail
116.8%
respectively.
Hail
Umm AlQura
Northern
AlSafwa
Eastern
Tabuk
Southern
Yanbu
Najran
Arabian
Yamamah
Saudi
Qassim
AlJouf
City
United Cement
cement and Umm AlQura Riyadh
40.0%
Sales / Production
Clinker Inventories
cement showed a cement sales/
clinker
production
ratio of 54.7% and 66.0% respectively.
Source: Yamama Cement , AlJazira Capital
5250
170.0%
4500
140.0%
AlSafwa cement showed the
3750
110.0%
highest increase of 171.1%YoY in
3000
80.0%
2250
50.0%
its inventory level, followed by
1500
20.0%
© All rights reserved
United Cement
Arabian
AlSafwa
City
AlJouf
Riyadh
YoY Change (%) -RHS
Umm AlQura
November-17- LHS
Northern
Tabuk
Qassim
Hail
Eastern
Southern
Najran
-40.0%
Yanbu
0
Yamamah
-10.0%
Saudi
750
November-16- LHS
2
cement and
decline of 29.0%YoY and
6,000
11M-17- LHS
Tabuk
12.7%YoY
and Yamamah cement with
7,000
11M-16- LHS
followed by Qassim cement
followed by Riyadh cement
YoY Change (%) -RHS
Cement Dispatches for 11M-2017
Hail cement showed the
Southern cement which showed an increase of 84.6%YoY. On the other hand, Riyadh and City cement showed a decline in the inventory level by 24.8%YoY and 12.7%YoY respectively.
Cement Dispatches for November 2017 December 2017 Saudi Cement Sector | Monthly Report | November 2017
Market Share – November 2017
Please read Disclaimer on the back
Source: Yamama Cement , AlJazira Capital Southern and Saudi cement
17.0%
4.5%
15.0%
2.5%
13.0%
0.5%
11.0% 9.0%
-1.5%
7.0%
-3.5%
5.0%
-5.5%
Northern
-7.5%
YoY Change - RHS
Market Share November-17- LHS
Market Share TTM
Tabuk
Hail
Umm AlQura
AlJouf
AlSafwa
Najran
United Cement
Market Share November-16- LHS
Riyadh
Eastern
Arabian
City
Yamamah
Qassim
Yanbu
Saudi
1.0%
Southern
3.0%
recorded the highest market share, in November 2017, of 12.6% and 10.2% (decline from 12.3%), respectively. While Northern cement, recorded the lowest market share of 2.7%. City cement increased its market share from 5.6% to 7.5%, while Yanbu market share decline from 16.4% to 9.4%.
Source: Yamama Cement , AlJazira Capital 2.4%
Yanbu
Southern
Saudi
Yamamah
Qassim
Arabian
City
Riyadh
Eastern
AlSafwa
Najran
United Cement
AlJouf
Northern
Umm AlQura
Tabuk
3.0%
2.3% 2.2%
2.4%
On TTM basis, Yanbu and
11.9%
3.4%
Southern cement recorded
3.7%
the highest market share of
11.6%
3.8%
11.9% and 11.6% followed
4.7%
7.2%
Hail
by Saudi cement with market
10.8%
6.0%
9.1% 7.6%
EV / Ton (in ‘000 SAR)
share of 10.8%
8.0%
Source: Bloomberg, Yamama Cement , AlJazira Capital
1150.0 1000.0
Aljouf cement recorded the
850.0
EV/Ton
AlJouf
Tabuk
Northern
Arabian
Southern
Saudi
Qassim
Umm AlQura
Hail
Yanbu
On the other hand, Najran
100.0
Eastern
with EV/Ton of SAR 1109.7.
250.0
Yamamah
followed by Tabuk cement
400.0
City
highest EV/Ton of SAR 1153.2,
550.0
Najran
700.0
Source: TADAWUL , AlJazira Capital
45.00
Saudi Cement recorded the
35.00 25.00
2.50
lowest P/E of 11.52x, followed
2.00
by Eastern 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
Qassim
Yanbu
Eastern
Saudi
1.00
P/E (LHS)
3
EV/Ton of SAR 420.0.
Sector EV/Ton
P/E & P/BV
5.00
cement recorded the lowest
0.50
of 12.82x. On the other hand, Najran cement recorded the highest P/E of 346.5. Najran cement recorded the lowest P/BV of 0.79x, while Qassim cement recorded the highest P/BV of 2.29x.
Cement Dispatches for November 2017 December 2017 Saudi Cement Sector | Monthly Report | November 2017
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Dispatches & Change Yamama Cement
-4%
Nov-17
Oct-17
Sep-17
Aug-17
-6%
Jul-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
-60%
Jun-17
-40%
100
0% -2%
May-17
-20%
200
2%
Apr-17
0%
300
8% 4%
Mar-17
5,200
20%
Change %(RHS)
6%
Feb-17
60%
40%
400
Clinker Inventories('000 Ton)(LHS)
Jan-17
-80%
5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0
60%
500
0
80%
Dec-16
Change %(RHS)
Nov-16
Dispatches ('000 Ton)(LHS)
600
-8%
Saudi Co SaudiCement Cement 4% 3%
4,900
2%
4,800
1%
4,700
0%
4,600
-1%
4,500
-2%
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
4,400 4,300
6% 5%
Feb-17
-60%
Change %(RHS)
5,000
Jan-17
Nov-17
Oct-17
Sep-17
0
Aug-17
-40%
Jul-17
100
Jun-17
200
-20%
May-17
0%
Apr-17
300
Mar-17
20%
Feb-17
400
Jan-17
40%
Dec-16
500
Clinker Inventories('000 Ton)(LHS)
5,100
Dec-16
Change %(RHS)
Nov-16
Dispatches ('000 Ton)(LHS)
600
-3% -4%
Qassim Cement
-60%
0%
400
-5%
200 0
Nov-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
-40%
Oct-17
100
5%
600
Aug-17
-20%
10%
800
Sep-17
0%
1,000
Jul-17
200
15%
1,200
Jun-17
20%
May-17
300
20%
1,400
Apr-17
40%
Change %(RHS) 25%
1,600
Mar-17
400
Clinker Inventories('000 Ton)(LHS)
1,800
Feb-17
60%
Jan-17
80%
Dec-16
Change %(RHS)
Nov-16
Dispatches ('000 Ton)(LHS)
500
-10%
Souhtern Cement
-10%
Nov-17
0
Oct-17
-5%
Sep-17
0%
500
Aug-17
-100%
1,000
Jul-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
5%
Jun-17
-50%
100
10%
1,500
May-17
200
2,000
Apr-17
0%
300
20% 15%
Mar-17
400
Change %(RHS)
2,500
Feb-17
50%
Clinker Inventories('000 Ton)(LHS)
3,000
Jan-17
500
100%
Dec-16
Change %(RHS)
Nov-16
Dispatches ('000 Ton)(LHS)
600
Yanbu Cement
4
100%
4,500
600
50%
3,500
400
0%
Change %(RHS)
15%
3,000
10%
2,500
5%
2,000
0%
1,500
-5%
1,000
-10%
Nov-17
Oct-17
Sep-17
Jul-17
Aug-17
Jun-17
May-17
Apr-17
Mar-17
Feb-17
500 0
25% 20%
Jan-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
-100%
Feb-17
0
Jan-17
-50%
Dec-16
200
Clinker Inventories('000 Ton)(LHS)
4,000
Dec-16
Change %(RHS)
Nov-16
Dispatches ('000 Ton)(LHS)
800
-15%
Source: Yamamah Cement Company, AlJazira Research
© All rights reserved
Cement Dispatches for November 2017 December 2017 Saudi Cement Sector | Monthly Report | November 2017
Please read Disclaimer on the back
Dispatches & Change Arabian Cement 800
50%
600
0%
400
-50%
200
-10%
0
-30%
40% 30% 20% 10% 0%
Nov-17
Oct-17
Aug-17
Sep-17
Jul-17
Jun-17
Apr-17
-20%
May-17
-100%
60% 50%
Mar-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
Feb-17
Jan-17
0
Dec-16
100
100%
Feb-17
200
Change %(RHS)
1,000
Jan-17
300
Clinker Inventories('000 Ton)(LHS)
150%
Dec-16
Change %(RHS)
Nov-16
Dispatches ('000 Ton)(LHS)
400
Eastern Co EasternCement Cement
Nov-17
Oct-17
Sep-17
Aug-17
Jan-17
Dec-16
-4%
Jul-17
0
0% -2%
Jun-17
500
-60%
2%
May-17
-40%
0
4%
Apr-17
50
10% 6%
Mar-17
1,000
Change %(RHS)
8%
Feb-17
-20%
Clinker Inventories('000 Ton)(LHS)
Jan-17
100
Nov-17
1,500
Oct-17
0%
Sep-17
150
Aug-17
2,000
Jul-17
20%
Jun-17
200
May-17
2,500
Apr-17
250
Mar-17
3,000
40%
Feb-17
60%
Dec-16
Change %(RHS)
Nov-16
Dispatches ('000 Ton)(LHS)
300
-6%
Najran Cement 3,300
60%
3,200
40%
3,100
-6%
Nov-17
-4%
2,500
Oct-17
2,600
Sep-17
-80%
2,700
Aug-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
-60%
-2%
Jul-17
50
0%
2,800
Jun-17
-40%
2%
2,900
May-17
-20%
0%
Apr-17
100
8% 4%
3,000
Mar-17
20%
Change %(RHS)
6%
Feb-17
150
Clinker Inventories('000 Ton)(LHS)
Jan-17
200
80%
Dec-16
Change %(RHS)
Nov-16
Dispatches ('000 Ton)(LHS)
250
Northern Cement
Nov-17
Oct-17
-20%
Sep-17
-10%
0
Aug-17
200
Jul-17
-100%
0%
400
Jun-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
-50%
10%
600
May-17
50
20%
800
Apr-17
0%
40% 30%
1,000
Mar-17
100
Change %(RHS)
1,200
Feb-17
50%
Clinker Inventories('000 Ton)(LHS)
1,400
Jan-17
100%
Dec-16
Change %(RHS)
Nov-16
Dispatches ('000 Ton)(LHS)
150
AlJouf Cement
5
950
-40%
900
-6% -8%
Nov-17
-20%
-4%
Oct-17
1,000
Sep-17
0%
0% -2%
Aug-17
1,050
Jul-17
20%
6% 2%
Jun-17
1,100
May-17
40%
Change %(RHS)
4%
Apr-17
1,150
Mar-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
Feb-17
Jan-17
0
Dec-16
50
60%
Clinker Inventories('000 Ton)(LHS)
Feb-17
100
1,200
Jan-17
150
80%
Dec-16
Change %(RHS)
Nov-16
Dispatches ('000 Ton)(LHS)
200
-10%
Source: Yamamah Cement Company, AlJazira Research
© All rights reserved
Cement Dispatches for November 2017 December 2017 Saudi Cement Sector | Monthly Report | November 2017
Please read Disclaimer on the back
Dispatches & Change Tabuk Cement
0%
600
4%
800
2% 0%
400
-2%
200
Nov-17
Oct-17
1,400
Aug-17
100%
-4%
Sep-17
0
Jul-17
-100%
Jun-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
20
6%
May-17
-50%
8%
Apr-17
40
50%
1,000
12% 10%
1,200
Mar-17
60
Change %(RHS)
1,400
Feb-17
80
Clinker Inventories('000 Ton)(LHS)
1,600
Jan-17
100%
100
0
150%
Dec-16
Change %(RHS)
120
Nov-16
Dispatches ('000 Ton)(LHS)
140
-6%
City Co CityCement Cement
-15%
Aug-17
Oct-17
-10%
0
Nov-17
200
Sep-17
-5%
Jul-17
-100%
0%
400
Jun-17
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Mar-17
Feb-17
Jan-17
0
Dec-16
100
5%
600
Apr-17
-50%
10%
800
May-17
0%
200
15%
Mar-17
300
20%
1,000
Feb-17
50%
Change %(RHS)
1,200
Jan-17
400
Clinker Inventories('000 Ton)(LHS)
Dec-16
Change %(RHS)
Nov-16
Dispatches ('000 Ton)(LHS)
500
Hail Cement
2%
Nov-17
Oct-17
-2%
Aug-17
0%
0
-100%
Sep-17
500
Jul-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
4%
1,000
Jun-17
-50%
20
6%
1,500
May-17
0%
40
12%
8%
2,000
Apr-17
60
Change %(RHS)
10%
Mar-17
50%
80
0
100%
2,500
Clinker Inventories('000 Ton)(LHS)
Feb-17
100
3,000
Jan-17
120
150%
Dec-16
Change %(RHS)
Nov-16
Dispatches ('000 Ton)(LHS)
140
Riyadh Cement Change %(RHS)
1,600
0%
1,200 1,000
-2%
800
-4%
600 400
-6%
Nov-17
Oct-17
Sep-17
Jul-17
Aug-17
Jun-17
May-17
Apr-17
-60%
Mar-17
200 0
4% 2%
1,400
Feb-17
0
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
250
Jan-17
60%
Dec-16
300
Clinker Inventories('000 Ton)(LHS)
1,800
Jan-17
80%
Dec-16
Change %(RHS)
Nov-16
Dispatches ('000 Ton)(LHS)
350
-8%
Safwa Cement
20% 15%
500
10%
400
5%
300 200
-60%
0
35% 25%
600
-40%
40% 30%
0%
-5%
Nov-17
Oct-17
Sep-17
Aug-17
Jul-17
Jun-17
May-17
100
Apr-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
50
Change %(RHS)
700
Mar-17
-20%
Clinker Inventories('000 Ton)(LHS)
900
Jan-17
0%
100
6
800
20%
150
0
1,000
40%
Feb-17
200
60%
Dec-16
Change %(RHS)
Nov-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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