Cement Dispatches for May 2017 - Aljazira Capital
Cement Dispatches for May 2017 June 2017 Saudi Cement Sector | Monthly Report | May 2017
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Cement dispatches: a decline of 21.4%YoY for the month of May 2017 standing at 4.51mn tons comparing to 5.74 in May 2016. Inventory levels showed a modest increase of 0.3%MoM. For 5M-2017 cement dispatches stood at 22.80mn ton compared to 28.21mn ton in 5M-2016, depicting a decline of 19.2%YoY. We expect the downtrend in sales to continues during the next few months on the back of weak demand fundamentals.
Change in Cement Dispatches
Source: Yamama Cement, AlJazira Capital Change %(RHS)
Dispatches (1000 Ton)(LHS)
6,000
35%
5,000
15%
4,000
Utilization Rate (TTM)
2017.
May-17
2017 compared to 85.7% in May 81.3%
79.6%
2016. 77.6%
Dec-16
Nov-16
Oct-16
Sep-16
Aug-16
Jul-16
76.4%
74.5%
Change in Clinker Inventories
72.9%
71.8%
70.1%
May-17
82.3%
Apr-17
83.6%
Jun-16
May-16
Apr-17
sector declined to 70.1% in May
Mar-17
85.7%
Utilization rate of Saudi cement 88.4%
Feb-17
90.6%
75.0%
Source: Yamama Cement, AlJazira Capital 15%
29,000
10%
Clinker Inventories showed
23,000
5%
39.3%YoY standing at 28.54MT
20,000
0%
2017
17,000
-5%
Clinker Inventories(1000 Ton)(LHS)
© All rights reserved
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Dec-16
Nov-16
Oct-16
Sep-16
Aug-16
Jul-16
Jun-16
May-16
26,000
1
compared to 4.64MT in April
Source: Yamama Cement, AlJazira Capital
Jan-17
95.0%
Mar-17
Feb-17
Jan-17
Dec-16
Nov-16
Oct-16
Sep-16
Aug-16
-45%
Jul-16
1,000
Jun-16
-25%
May-16
2,000
65.0%
2.8%MoM, standing at 4.51MT
-5%
3,000
85.0%
Cement dispatches declined by
an increase of 0.3%MoM and compared to 28.47MT in April
Change %(RHS) Analyst
Analyst
Jassim Al-Jubran
Waleed Al-jubayr
+966 11 2256248 [email protected]
+966 11 2256146 [email protected]
Cement Dispatches for May 2017 June 2017 Saudi Cement Sector | Monthly Report | May 2017
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Cement Dispatches for May 2017
Source: Yamama Cement , AlJazira Capital
1000 800 600
AlSafwa cement was the only
0.0%
company to show YoY growth,
-20.0%
400
-40.0%
May-16
May-17
6.0%
3400 2850
-14.0%
2300 1750 1200
-34.0%
100
-54.0%
Sales / Production for 5M-2017
United Cement
Hail
AlSafwa
AlJouf
Northern
City
YoY Change (%) -RHS
Umm AlQura
5M-17
Najran
Riyadh
Tabuk
Southern
Arabian
Yanbu
Qassim
Eastern
650
Saudi
showed a decline of 47.3%YoY.
Source: Yamama Cement , AlJazira Capital
3950
Yamamah
the other hand, Najran cement
YoY Change (%) -RHS
Cement Dispatches for 5M-2017
5M-16
recording growth of 12.6%. On
-60.0%
United Cement
Umm AlQura
Hail
AlSafwa
AlJouf
Northern
City
Najran
Riyadh
Tabuk
Southern
Arabian
Yanbu
Qassim
Eastern
Saudi
Yamamah
200 0
20.0%
For 5M-2017, city cement was the only company to show YoY growth of 8.4%. While Northern cement and Najran cement showed a decline of 50.8%YoY and 43.4%YoY respectively.
Source: Yamama Cement , AlJazira Capital
104.0% 102.0% 100.0%
Yamama
and
Clinker Inventories
sales
/
production
AlJouf cement showed a sales/ production ratio of 96.1%.
Source: Yamama Cement , AlJazira Capital
Saudi and Yamama cement
5000 4000 3000 2000
© All rights reserved
Hail
United Cement
YoY Change (%) -RHS
AlSafwa
AlJouf
Northern
City
Najran
Riyadh
Tabuk
May-17
Umm AlQura
May-16
Southern
Arabian
Yanbu
Qassim
Eastern
Saudi
Yamamah
1000 0
United Cement
Umm AlQura
Hail
AlSafwa
AlJouf
Northern
City
Najran
Riyadh
Tabuk
Southern
Arabian
respectively. On the other hand,
Yanbu
92.0%
Qassim
ratio of 102.3% and 102.2% Eastern
highest
94.0%
Saudi
96.0%
Yamamah
Northern cement showed the
Sales / Production
2
cement
98.0%
460.0% 400.0% 340.0% 280.0% 220.0% 160.0% 100.0% 40.0% -20.0%
recorded the highest levels of inventories of 4.70MT and 3.90MT, respectively. AlSafwa cement showed the highest increase of 486.2%YoY in its inventories level, while Yanbu and Riyadh cement showed a decline of 5.7%YoY and 3.7%YoY respectively
Cement Dispatches for May 2017 June 2017 Saudi Cement Sector | Monthly Report | May 2017
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Market share
Source: Yamama Cement , AlJazira Capital
Southern and Yamama cement
market share from 3.0% to 4.3%,
Market Share May-17
AlSafwa
Northern
Southern
Yanbu
Market Share May-16
YoY Change
Market Share TTM
United Cement
-40.0%
Umm AlQura
showed the highest increase in its
1.0%
Hail
share of 1.8%. AlSafwa cement
-25.0%
AlJouf
-10.0%
3.0%
City
5.0%
Najran
5.0%
Riyadh
7.0%
Tabuk
20.0%
Arabian
9.0%
Qassim
35.0%
Eastern
11.0%
Saudi
50.0%
Yamamah
13.0%
recorded the highest market share of 11.4% in May 2017, while Hail cement, recorded the lowest market
while Najran cement showed a decline in its market share standing at 3.4% from 5.1% in May 2016.
Source: Yamama Cement , AlJazira Capital 2%
Southern
Saudi
Yanbu
Yamamah
Arabian
Qassim
Riyadh
City
Eastern
Najran
AlSafwa
AlJouf
Northern
Tabuk
Hail
United Cement
3%
1%
2% 1%
3%
12%
On TTM
4%
4%
basis,
Saudi
and
Southern cement recorded the
12%
highest market share of 12.3%
5%
each followed by Yanbu cement
7%
12%
with market share of 12.1%
7%
Umm AlQura
8%
EV / Ton (in ‘000 SAR)
10%
8%
Source: Bloomberg, Yamama Cement , AlJazira Capital
1200.0 1000.0
Tabuk cement recorded the
Sector EV/Ton
EV/Ton
P/E & P/BV
15.00
P/E
© All rights reserved
P/BV
Umm AlQura
Hail
AlJouf
Northern
City
Najran
Tabuk
Arabian
Yanbu
Qassim
Eastern
Saudi
5.00
Southern
10.00
Yamamah
of SAR 405.6. Sector’s EV/Ton stood at SAR 664.2/ton
Source: TADAWUL , AlJazira Capital
20.00
3
Umm AlQura
Hail
AlJouf
Northern
City
Najran
Tabuk
Southern
Arabian
recorded the lowest EV/Ton
Yanbu
other hand, Yamama cement
0.0
Qassim
EV/Ton of SAR 969.6. on the
200.0
Eastern
followed by AlJouf cement with
400.0
Saudi
highest EV/Ton of SAR 978.3 ,
600.0
Yamamah
800.0
2.50
Saudi Cement recorded the
2.00
lowest P/E of 9.60x,followed by
1.50
Arabian cement with P/E of 9.75x.
1.00
on the other hand Tabuk cement
0.50
recorded the highest P/E of
0.00
21.94x. AlJouf cement recorded the lowest P/BV of 0.63x, while Qassim cement recorded the highest P/BV of 2.29
Cement Dispatches for May 2017 June 2017 Saudi Cement Sector | Monthly Report | May 2017
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Company News & Events Company Name
Date of Announcement
Corporate Event & Announcement Najran Cement’s board of directors approved to put on hold plans for setting up limited liability companies for mining and transport services. The establishment of
Najran Cement
25-05-2017
the mining firm was postponed as the ministry of mineral resources has suspended issuance of new mining licenses until law amendments are finalized. Plans for the transport company were also shelved due to the current market conditions.
Hail Cement
16-05-2017
Hail Cement Co. has received a new cement export license, valid for one year, from Saudi Arabia’s Ministry of Commerce and Investment.
Najran Cement mentioned that cement export license received earlier this year is Najran Cement
11-05-2017
not expected to have a positive impact on its financial statements due to the high export fees imposed on the company. The company said the export is not feasible at the moment despite its proximity to targeted markets.
Saudi Cement
24-05-2017
Qassim Cement
20-04-2017
Najran Cement
30-03-2017
Saudi Cement Co. board of directors recommended cash dividend of SAR 2.25 per share for the first half of 2017.
Qassim Cement Co.’s board of directors has recommended cash dividend of SAR 0.85 per share for the first quarter of 2017.
Najran Cement announced that it expects to incur fixed costs of SAR 19.4mn in fiscal year 2017, due to the temporary halt of its second production line.
Tabuk Cement
14-03-2017
Tabuk Cement has received an export license, valid for one year, from Saudi Arabia’s ministry of commerce and investment.
Source: The Saudi Stock Exchange - Tadawul
4
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Cement Dispatches for May 2017 June 2017 Saudi Cement Sector | Monthly Report | May 2017
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Dispatches & Change Yamama Cement 60% 50% 40% 30% 20% 10% 0% -10% -20% -30% -40% -50%
5,000
30%
6,000
20%
5,000
10%
4,000
0%
3,000
-10%
2,000
100
-20%
1,000
0
-30%
0
2%
2,500
0%
2,000
-2%
1,500
-4%
1,000
-6%
May-17
Apr-17
Mar-17
Feb-17
Jan-17
0
Dec-16
500
Nov-16
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Nov-16
Dec-16
Oct-16
Sep-16
Aug-16
Jul-16
0
Jun-16
100
4%
3,000
Oct-16
200
6%
3,500
Aug-16
300
10% 8%
Sep-16
400
Change %(RHS)
4,000
Jul-16
500
Clinker Inventories('000 Ton)(LHS)
4,500
Jun-16
Change %(RHS)
May-16
Dispatches ('000 Ton)(LHS)
600
-8%
Saudi Co SaudiCement Cement Change %(RHS)
0%
-2% -4%
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Dec-16
Nov-16
-6%
Oct-16
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Nov-16
Dec-16
Oct-16
Sep-16
Aug-16
Jul-16
Jun-16
200
2%
Aug-16
300
4%
Sep-16
400
6%
Jul-16
500
Change %(RHS) 8%
Jun-16
600
Clinker Inventories('000 Ton)(LHS)
May-16
Dispatches ('000 Ton)(LHS) 700
-8%
Qassim Cement Dispatches ('000 Ton)(LHS)
Change %(RHS)
450
Clinker Inventories('000 Ton)(LHS)
Change %(RHS)
0
-15%
700
60%
3,000
600
40%
2,500
20%
2,000
0%
1,500
-20%
1,000
100
-40%
500
0
-60%
0
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Nov-16
Dec-16
Oct-16
Sep-16
Aug-16
Jul-16
Jun-16
0
May-17
-10%
-60%
50
Apr-17
200
Mar-17
-5%
-40%
100
Feb-17
400
150
Jan-17
0%
-20%
200
Dec-16
600
Nov-16
5%
0%
250
Oct-16
800
300
Aug-16
10%
20%
350
Sep-16
1,000
Jul-16
15%
40%
400
Jun-16
1,200
May-16
60%
Souhtern Cement Change %(RHS)
10% 5% 0%
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Dec-16
Nov-16
Oct-16
-5%
Aug-16
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Nov-16
Dec-16
Oct-16
Sep-16
Aug-16
Jul-16
Jun-16
200
15%
Sep-16
300
30% 20%
Jul-16
400
Change %(RHS)
25%
Jun-16
500
Clinker Inventories('000 Ton)(LHS)
May-16
Dispatches ('000 Ton)(LHS)
-10%
Yanbu Cement
5
1,000
-10%
May-17
Apr-17
Mar-17
0
Feb-17
500
Jan-17
-60%
-5%
1,500
Dec-16
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Nov-16
Dec-16
Oct-16
Sep-16
Aug-16
Jul-16
Jun-16
-40%
0%
2,000
Nov-16
-20%
200
2,500
Oct-16
0%
10% 5%
3,000
Aug-16
20%
400
Change %(RHS)
3,500
Sep-16
40%
Clinker Inventories('000 Ton)(LHS)
4,000
Jul-16
60%
600
0
80%
Jun-16
Change %(RHS)
May-16
Dispatches ('000 Ton)(LHS)
800
-15%
Source: Yamamah Cement Company, AlJazira Research
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Cement Dispatches for May 2017 June 2017 Saudi Cement Sector | Monthly Report | May 2017
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Dispatches & Change Arabian Cement Change %(RHS)
Clinker Inventories('000 Ton)(LHS)
20% 0%
200
May-17
Apr-17
Mar-17
Feb-17
Jan-17
-20%
0
Dec-16
-100%
40%
Nov-16
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Dec-16
Nov-16
Oct-16
Aug-16
Sep-16
Jul-16
0
Jun-16
100
60%
400
Oct-16
-50%
80%
600
Aug-16
200
100%
Sep-16
0%
Change %(RHS)
800
Jul-16
300
Jun-16
50%
May-16
Dispatches ('000 Ton)(LHS) 400
-40%
Eastern Co EasternCement Cement
May-17
Apr-17
0
Mar-17
0%
Feb-17
-40%
2%
500
Jan-17
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Dec-16
Nov-16
Oct-16
Sep-16
Aug-16
Jul-16
0
Jun-16
-20%
Dec-16
100
4%
1,000
Nov-16
0%
6%
1,500
Oct-16
20%
8%
Sep-16
200
Change %(RHS)
2,000
Aug-16
40%
Clinker Inventories('000 Ton)(LHS) 2,500
Jul-16
60%
Jun-16
Change %(RHS)
May-16
Dispatches ('000 Ton)(LHS)
300
-2%
Najran Cement
May-17
Apr-17
0
Mar-17
-5%
Feb-17
1,000
Jan-17
-100%
0%
Dec-16
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Dec-16
Nov-16
Oct-16
Sep-16
Aug-16
Jul-16
0
Jun-16
50
2,000
Nov-16
-50%
5%
Oct-16
0%
100
3,000
Sep-16
150
Change %(RHS) 10%
Aug-16
50%
Clinker Inventories('000 Ton)(LHS) 4,000
Jul-16
200
100%
Jun-16
Change %(RHS)
May-16
Dispatches ('000 Ton)(LHS)
250
-10%
Northern Cement
May-17
Apr-17
Mar-17
Feb-17
-40%
Jan-17
-20%
0
Dec-16
0%
200
Nov-16
20%
400
Oct-16
-40%
40%
600
Sep-16
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Dec-16
Nov-16
Oct-16
Sep-16
Aug-16
Jul-16
0
-20%
Jun-16
50
60%
800
Aug-16
0%
Change %(RHS)
1,000
Jul-16
100
Clinker Inventories('000 Ton)(LHS)
20%
Jun-16
Change %(RHS)
May-16
Dispatches ('000 Ton)(LHS)
150
AlJouf Cement Dispatches ('000 Ton)(LHS)
Change %(RHS)
Clinker Inventories('000 Ton)(LHS) 50%
200
250%
1,000 0%
100
200%
800
150%
600
100%
400
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Dec-16
Nov-16
Oct-16
Sep-16
Aug-16
0%
Jul-16
0
Jun-16
-50%
50%
200
May-16
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Dec-16
Nov-16
Oct-16
Sep-16
Aug-16
Jul-16
Jun-16
50
6
300%
1,200
150
0
Change %(RHS)
1,400
-50%
Source: Yamamah Cement Company, AlJazira Research
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Cement Dispatches for May 2017 June 2017 Saudi Cement Sector | Monthly Report | May 2017
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Dispatches & Change Tabuk Cement Change %(RHS)
May-17
Apr-17
Feb-17
Mar-17
-50%
0
Jan-17
0%
200
Nov-16
50%
400
Dec-16
-100%
100%
600
Oct-16
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Nov-16
Dec-16
Oct-16
Aug-16
Sep-16
Jul-16
Jun-16
0
-50%
150%
Sep-16
50
200%
800
Aug-16
0%
Change %(RHS)
1,000
Jul-16
50%
100
Clinker Inventories('000 Ton)(LHS)
1,200
Jun-16
100%
May-16
Dispatches ('000 Ton)(LHS) 150
-100%
City Co CityCement Cement
May-17
Apr-17
-5%
0
Mar-17
0%
200
Feb-17
5%
400
Jan-17
-100%
10%
600
Nov-16
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Dec-16
Nov-16
Oct-16
Sep-16
Aug-16
Jul-16
Jun-16
0
-50%
15%
800
Dec-16
200
20%
Oct-16
0%
25%
1,000
Sep-16
400
Change %(RHS)
1,200
Aug-16
50%
Clinker Inventories('000 Ton)(LHS)
1,400
Jul-16
100%
Jun-16
Change %(RHS)
May-16
Dispatches ('000 Ton)(LHS)
600
-10%
Hail Cement
6% 4% 2%
May-17
Apr-17
Mar-17
Feb-17
Dec-16
Jan-17
0%
Nov-16
-50%
12% 8%
Oct-16
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Dec-16
Nov-16
Oct-16
Sep-16
Aug-16
Jul-16
Jun-16
0
Change %(RHS)
10%
Sep-16
0% 50
Clinker Inventories('000 Ton)(LHS)
Aug-16
100
2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0
Jul-16
50%
Jun-16
Change %(RHS)
May-16
Dispatches ('000 Ton)(LHS)
150
-2%
Riyadh Cement Dispatches ('000 Ton)(LHS)
400
Change %(RHS)
50%
Clinker Inventories('000 Ton)(LHS)
1,700
Change %(RHS)
1,650
4%
1,600 0%
200
2%
1,550
0%
1,500
-2%
1,450
-4%
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Dec-16
Nov-16
Oct-16
Sep-16
Aug-16
-8%
Jul-16
-6%
1,300
Jun-16
-50%
1,350
May-16
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Dec-16
Nov-16
Oct-16
Sep-16
Aug-16
Jul-16
Jun-16
1,400 0
6%
Safwa Cement Change %(RHS)
7
0%
May-17
Apr-17
Mar-17
Feb-17
-20%
Jan-17
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Dec-16
Nov-16
Oct-16
Sep-16
Aug-16
Jul-16
-50%
Jun-16
0
20%
Dec-16
50
40%
Nov-16
0%
60%
Oct-16
100
80%
Aug-16
150
Change %(RHS) 100%
Sep-16
50%
Clinker Inventories('000 Ton)(LHS)
Jul-16
200
450 400 350 300 250 200 150 100 50 0
Jun-16
100%
May-16
Dispatches ('000 Ton)(LHS) 250
-40%
Source: Yamamah Cement Company, AlJazira Research
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RESEARCH DIVISION
Acting 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: a decline of 21.4%YoY for the month of May 2017 standing at 4.51mn tons comparing to 5.74 in May 2016. Inventory levels showed a modest increase of 0.3%MoM. For 5M-2017 cement dispatches stood at 22.80mn ton compared to 28.21mn ton in 5M-2016, depicting a decline of 19.2%YoY. We expect the downtrend in sales to continues during the next few months on the back of weak demand fundamentals.
Change in Cement Dispatches
Source: Yamama Cement, AlJazira Capital Change %(RHS)
Dispatches (1000 Ton)(LHS)
6,000
35%
5,000
15%
4,000
Utilization Rate (TTM)
2017.
May-17
2017 compared to 85.7% in May 81.3%
79.6%
2016. 77.6%
Dec-16
Nov-16
Oct-16
Sep-16
Aug-16
Jul-16
76.4%
74.5%
Change in Clinker Inventories
72.9%
71.8%
70.1%
May-17
82.3%
Apr-17
83.6%
Jun-16
May-16
Apr-17
sector declined to 70.1% in May
Mar-17
85.7%
Utilization rate of Saudi cement 88.4%
Feb-17
90.6%
75.0%
Source: Yamama Cement, AlJazira Capital 15%
29,000
10%
Clinker Inventories showed
23,000
5%
39.3%YoY standing at 28.54MT
20,000
0%
2017
17,000
-5%
Clinker Inventories(1000 Ton)(LHS)
© All rights reserved
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Dec-16
Nov-16
Oct-16
Sep-16
Aug-16
Jul-16
Jun-16
May-16
26,000
1
compared to 4.64MT in April
Source: Yamama Cement, AlJazira Capital
Jan-17
95.0%
Mar-17
Feb-17
Jan-17
Dec-16
Nov-16
Oct-16
Sep-16
Aug-16
-45%
Jul-16
1,000
Jun-16
-25%
May-16
2,000
65.0%
2.8%MoM, standing at 4.51MT
-5%
3,000
85.0%
Cement dispatches declined by
an increase of 0.3%MoM and compared to 28.47MT in April
Change %(RHS) Analyst
Analyst
Jassim Al-Jubran
Waleed Al-jubayr
+966 11 2256248 [email protected]
+966 11 2256146 [email protected]
Cement Dispatches for May 2017 June 2017 Saudi Cement Sector | Monthly Report | May 2017
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Cement Dispatches for May 2017
Source: Yamama Cement , AlJazira Capital
1000 800 600
AlSafwa cement was the only
0.0%
company to show YoY growth,
-20.0%
400
-40.0%
May-16
May-17
6.0%
3400 2850
-14.0%
2300 1750 1200
-34.0%
100
-54.0%
Sales / Production for 5M-2017
United Cement
Hail
AlSafwa
AlJouf
Northern
City
YoY Change (%) -RHS
Umm AlQura
5M-17
Najran
Riyadh
Tabuk
Southern
Arabian
Yanbu
Qassim
Eastern
650
Saudi
showed a decline of 47.3%YoY.
Source: Yamama Cement , AlJazira Capital
3950
Yamamah
the other hand, Najran cement
YoY Change (%) -RHS
Cement Dispatches for 5M-2017
5M-16
recording growth of 12.6%. On
-60.0%
United Cement
Umm AlQura
Hail
AlSafwa
AlJouf
Northern
City
Najran
Riyadh
Tabuk
Southern
Arabian
Yanbu
Qassim
Eastern
Saudi
Yamamah
200 0
20.0%
For 5M-2017, city cement was the only company to show YoY growth of 8.4%. While Northern cement and Najran cement showed a decline of 50.8%YoY and 43.4%YoY respectively.
Source: Yamama Cement , AlJazira Capital
104.0% 102.0% 100.0%
Yamama
and
Clinker Inventories
sales
/
production
AlJouf cement showed a sales/ production ratio of 96.1%.
Source: Yamama Cement , AlJazira Capital
Saudi and Yamama cement
5000 4000 3000 2000
© All rights reserved
Hail
United Cement
YoY Change (%) -RHS
AlSafwa
AlJouf
Northern
City
Najran
Riyadh
Tabuk
May-17
Umm AlQura
May-16
Southern
Arabian
Yanbu
Qassim
Eastern
Saudi
Yamamah
1000 0
United Cement
Umm AlQura
Hail
AlSafwa
AlJouf
Northern
City
Najran
Riyadh
Tabuk
Southern
Arabian
respectively. On the other hand,
Yanbu
92.0%
Qassim
ratio of 102.3% and 102.2% Eastern
highest
94.0%
Saudi
96.0%
Yamamah
Northern cement showed the
Sales / Production
2
cement
98.0%
460.0% 400.0% 340.0% 280.0% 220.0% 160.0% 100.0% 40.0% -20.0%
recorded the highest levels of inventories of 4.70MT and 3.90MT, respectively. AlSafwa cement showed the highest increase of 486.2%YoY in its inventories level, while Yanbu and Riyadh cement showed a decline of 5.7%YoY and 3.7%YoY respectively
Cement Dispatches for May 2017 June 2017 Saudi Cement Sector | Monthly Report | May 2017
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Market share
Source: Yamama Cement , AlJazira Capital
Southern and Yamama cement
market share from 3.0% to 4.3%,
Market Share May-17
AlSafwa
Northern
Southern
Yanbu
Market Share May-16
YoY Change
Market Share TTM
United Cement
-40.0%
Umm AlQura
showed the highest increase in its
1.0%
Hail
share of 1.8%. AlSafwa cement
-25.0%
AlJouf
-10.0%
3.0%
City
5.0%
Najran
5.0%
Riyadh
7.0%
Tabuk
20.0%
Arabian
9.0%
Qassim
35.0%
Eastern
11.0%
Saudi
50.0%
Yamamah
13.0%
recorded the highest market share of 11.4% in May 2017, while Hail cement, recorded the lowest market
while Najran cement showed a decline in its market share standing at 3.4% from 5.1% in May 2016.
Source: Yamama Cement , AlJazira Capital 2%
Southern
Saudi
Yanbu
Yamamah
Arabian
Qassim
Riyadh
City
Eastern
Najran
AlSafwa
AlJouf
Northern
Tabuk
Hail
United Cement
3%
1%
2% 1%
3%
12%
On TTM
4%
4%
basis,
Saudi
and
Southern cement recorded the
12%
highest market share of 12.3%
5%
each followed by Yanbu cement
7%
12%
with market share of 12.1%
7%
Umm AlQura
8%
EV / Ton (in ‘000 SAR)
10%
8%
Source: Bloomberg, Yamama Cement , AlJazira Capital
1200.0 1000.0
Tabuk cement recorded the
Sector EV/Ton
EV/Ton
P/E & P/BV
15.00
P/E
© All rights reserved
P/BV
Umm AlQura
Hail
AlJouf
Northern
City
Najran
Tabuk
Arabian
Yanbu
Qassim
Eastern
Saudi
5.00
Southern
10.00
Yamamah
of SAR 405.6. Sector’s EV/Ton stood at SAR 664.2/ton
Source: TADAWUL , AlJazira Capital
20.00
3
Umm AlQura
Hail
AlJouf
Northern
City
Najran
Tabuk
Southern
Arabian
recorded the lowest EV/Ton
Yanbu
other hand, Yamama cement
0.0
Qassim
EV/Ton of SAR 969.6. on the
200.0
Eastern
followed by AlJouf cement with
400.0
Saudi
highest EV/Ton of SAR 978.3 ,
600.0
Yamamah
800.0
2.50
Saudi Cement recorded the
2.00
lowest P/E of 9.60x,followed by
1.50
Arabian cement with P/E of 9.75x.
1.00
on the other hand Tabuk cement
0.50
recorded the highest P/E of
0.00
21.94x. AlJouf cement recorded the lowest P/BV of 0.63x, while Qassim cement recorded the highest P/BV of 2.29
Cement Dispatches for May 2017 June 2017 Saudi Cement Sector | Monthly Report | May 2017
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Company News & Events Company Name
Date of Announcement
Corporate Event & Announcement Najran Cement’s board of directors approved to put on hold plans for setting up limited liability companies for mining and transport services. The establishment of
Najran Cement
25-05-2017
the mining firm was postponed as the ministry of mineral resources has suspended issuance of new mining licenses until law amendments are finalized. Plans for the transport company were also shelved due to the current market conditions.
Hail Cement
16-05-2017
Hail Cement Co. has received a new cement export license, valid for one year, from Saudi Arabia’s Ministry of Commerce and Investment.
Najran Cement mentioned that cement export license received earlier this year is Najran Cement
11-05-2017
not expected to have a positive impact on its financial statements due to the high export fees imposed on the company. The company said the export is not feasible at the moment despite its proximity to targeted markets.
Saudi Cement
24-05-2017
Qassim Cement
20-04-2017
Najran Cement
30-03-2017
Saudi Cement Co. board of directors recommended cash dividend of SAR 2.25 per share for the first half of 2017.
Qassim Cement Co.’s board of directors has recommended cash dividend of SAR 0.85 per share for the first quarter of 2017.
Najran Cement announced that it expects to incur fixed costs of SAR 19.4mn in fiscal year 2017, due to the temporary halt of its second production line.
Tabuk Cement
14-03-2017
Tabuk Cement has received an export license, valid for one year, from Saudi Arabia’s ministry of commerce and investment.
Source: The Saudi Stock Exchange - Tadawul
4
© All rights reserved
Cement Dispatches for May 2017 June 2017 Saudi Cement Sector | Monthly Report | May 2017
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Dispatches & Change Yamama Cement 60% 50% 40% 30% 20% 10% 0% -10% -20% -30% -40% -50%
5,000
30%
6,000
20%
5,000
10%
4,000
0%
3,000
-10%
2,000
100
-20%
1,000
0
-30%
0
2%
2,500
0%
2,000
-2%
1,500
-4%
1,000
-6%
May-17
Apr-17
Mar-17
Feb-17
Jan-17
0
Dec-16
500
Nov-16
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Nov-16
Dec-16
Oct-16
Sep-16
Aug-16
Jul-16
0
Jun-16
100
4%
3,000
Oct-16
200
6%
3,500
Aug-16
300
10% 8%
Sep-16
400
Change %(RHS)
4,000
Jul-16
500
Clinker Inventories('000 Ton)(LHS)
4,500
Jun-16
Change %(RHS)
May-16
Dispatches ('000 Ton)(LHS)
600
-8%
Saudi Co SaudiCement Cement Change %(RHS)
0%
-2% -4%
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Dec-16
Nov-16
-6%
Oct-16
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Nov-16
Dec-16
Oct-16
Sep-16
Aug-16
Jul-16
Jun-16
200
2%
Aug-16
300
4%
Sep-16
400
6%
Jul-16
500
Change %(RHS) 8%
Jun-16
600
Clinker Inventories('000 Ton)(LHS)
May-16
Dispatches ('000 Ton)(LHS) 700
-8%
Qassim Cement Dispatches ('000 Ton)(LHS)
Change %(RHS)
450
Clinker Inventories('000 Ton)(LHS)
Change %(RHS)
0
-15%
700
60%
3,000
600
40%
2,500
20%
2,000
0%
1,500
-20%
1,000
100
-40%
500
0
-60%
0
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Nov-16
Dec-16
Oct-16
Sep-16
Aug-16
Jul-16
Jun-16
0
May-17
-10%
-60%
50
Apr-17
200
Mar-17
-5%
-40%
100
Feb-17
400
150
Jan-17
0%
-20%
200
Dec-16
600
Nov-16
5%
0%
250
Oct-16
800
300
Aug-16
10%
20%
350
Sep-16
1,000
Jul-16
15%
40%
400
Jun-16
1,200
May-16
60%
Souhtern Cement Change %(RHS)
10% 5% 0%
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Dec-16
Nov-16
Oct-16
-5%
Aug-16
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Nov-16
Dec-16
Oct-16
Sep-16
Aug-16
Jul-16
Jun-16
200
15%
Sep-16
300
30% 20%
Jul-16
400
Change %(RHS)
25%
Jun-16
500
Clinker Inventories('000 Ton)(LHS)
May-16
Dispatches ('000 Ton)(LHS)
-10%
Yanbu Cement
5
1,000
-10%
May-17
Apr-17
Mar-17
0
Feb-17
500
Jan-17
-60%
-5%
1,500
Dec-16
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Nov-16
Dec-16
Oct-16
Sep-16
Aug-16
Jul-16
Jun-16
-40%
0%
2,000
Nov-16
-20%
200
2,500
Oct-16
0%
10% 5%
3,000
Aug-16
20%
400
Change %(RHS)
3,500
Sep-16
40%
Clinker Inventories('000 Ton)(LHS)
4,000
Jul-16
60%
600
0
80%
Jun-16
Change %(RHS)
May-16
Dispatches ('000 Ton)(LHS)
800
-15%
Source: Yamamah Cement Company, AlJazira Research
© All rights reserved
Cement Dispatches for May 2017 June 2017 Saudi Cement Sector | Monthly Report | May 2017
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Dispatches & Change Arabian Cement Change %(RHS)
Clinker Inventories('000 Ton)(LHS)
20% 0%
200
May-17
Apr-17
Mar-17
Feb-17
Jan-17
-20%
0
Dec-16
-100%
40%
Nov-16
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Dec-16
Nov-16
Oct-16
Aug-16
Sep-16
Jul-16
0
Jun-16
100
60%
400
Oct-16
-50%
80%
600
Aug-16
200
100%
Sep-16
0%
Change %(RHS)
800
Jul-16
300
Jun-16
50%
May-16
Dispatches ('000 Ton)(LHS) 400
-40%
Eastern Co EasternCement Cement
May-17
Apr-17
0
Mar-17
0%
Feb-17
-40%
2%
500
Jan-17
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Dec-16
Nov-16
Oct-16
Sep-16
Aug-16
Jul-16
0
Jun-16
-20%
Dec-16
100
4%
1,000
Nov-16
0%
6%
1,500
Oct-16
20%
8%
Sep-16
200
Change %(RHS)
2,000
Aug-16
40%
Clinker Inventories('000 Ton)(LHS) 2,500
Jul-16
60%
Jun-16
Change %(RHS)
May-16
Dispatches ('000 Ton)(LHS)
300
-2%
Najran Cement
May-17
Apr-17
0
Mar-17
-5%
Feb-17
1,000
Jan-17
-100%
0%
Dec-16
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Dec-16
Nov-16
Oct-16
Sep-16
Aug-16
Jul-16
0
Jun-16
50
2,000
Nov-16
-50%
5%
Oct-16
0%
100
3,000
Sep-16
150
Change %(RHS) 10%
Aug-16
50%
Clinker Inventories('000 Ton)(LHS) 4,000
Jul-16
200
100%
Jun-16
Change %(RHS)
May-16
Dispatches ('000 Ton)(LHS)
250
-10%
Northern Cement
May-17
Apr-17
Mar-17
Feb-17
-40%
Jan-17
-20%
0
Dec-16
0%
200
Nov-16
20%
400
Oct-16
-40%
40%
600
Sep-16
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Dec-16
Nov-16
Oct-16
Sep-16
Aug-16
Jul-16
0
-20%
Jun-16
50
60%
800
Aug-16
0%
Change %(RHS)
1,000
Jul-16
100
Clinker Inventories('000 Ton)(LHS)
20%
Jun-16
Change %(RHS)
May-16
Dispatches ('000 Ton)(LHS)
150
AlJouf Cement Dispatches ('000 Ton)(LHS)
Change %(RHS)
Clinker Inventories('000 Ton)(LHS) 50%
200
250%
1,000 0%
100
200%
800
150%
600
100%
400
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Dec-16
Nov-16
Oct-16
Sep-16
Aug-16
0%
Jul-16
0
Jun-16
-50%
50%
200
May-16
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Dec-16
Nov-16
Oct-16
Sep-16
Aug-16
Jul-16
Jun-16
50
6
300%
1,200
150
0
Change %(RHS)
1,400
-50%
Source: Yamamah Cement Company, AlJazira Research
© All rights reserved
Cement Dispatches for May 2017 June 2017 Saudi Cement Sector | Monthly Report | May 2017
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Dispatches & Change Tabuk Cement Change %(RHS)
May-17
Apr-17
Feb-17
Mar-17
-50%
0
Jan-17
0%
200
Nov-16
50%
400
Dec-16
-100%
100%
600
Oct-16
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Nov-16
Dec-16
Oct-16
Aug-16
Sep-16
Jul-16
Jun-16
0
-50%
150%
Sep-16
50
200%
800
Aug-16
0%
Change %(RHS)
1,000
Jul-16
50%
100
Clinker Inventories('000 Ton)(LHS)
1,200
Jun-16
100%
May-16
Dispatches ('000 Ton)(LHS) 150
-100%
City Co CityCement Cement
May-17
Apr-17
-5%
0
Mar-17
0%
200
Feb-17
5%
400
Jan-17
-100%
10%
600
Nov-16
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Dec-16
Nov-16
Oct-16
Sep-16
Aug-16
Jul-16
Jun-16
0
-50%
15%
800
Dec-16
200
20%
Oct-16
0%
25%
1,000
Sep-16
400
Change %(RHS)
1,200
Aug-16
50%
Clinker Inventories('000 Ton)(LHS)
1,400
Jul-16
100%
Jun-16
Change %(RHS)
May-16
Dispatches ('000 Ton)(LHS)
600
-10%
Hail Cement
6% 4% 2%
May-17
Apr-17
Mar-17
Feb-17
Dec-16
Jan-17
0%
Nov-16
-50%
12% 8%
Oct-16
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Dec-16
Nov-16
Oct-16
Sep-16
Aug-16
Jul-16
Jun-16
0
Change %(RHS)
10%
Sep-16
0% 50
Clinker Inventories('000 Ton)(LHS)
Aug-16
100
2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0
Jul-16
50%
Jun-16
Change %(RHS)
May-16
Dispatches ('000 Ton)(LHS)
150
-2%
Riyadh Cement Dispatches ('000 Ton)(LHS)
400
Change %(RHS)
50%
Clinker Inventories('000 Ton)(LHS)
1,700
Change %(RHS)
1,650
4%
1,600 0%
200
2%
1,550
0%
1,500
-2%
1,450
-4%
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Dec-16
Nov-16
Oct-16
Sep-16
Aug-16
-8%
Jul-16
-6%
1,300
Jun-16
-50%
1,350
May-16
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Dec-16
Nov-16
Oct-16
Sep-16
Aug-16
Jul-16
Jun-16
1,400 0
6%
Safwa Cement Change %(RHS)
7
0%
May-17
Apr-17
Mar-17
Feb-17
-20%
Jan-17
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Dec-16
Nov-16
Oct-16
Sep-16
Aug-16
Jul-16
-50%
Jun-16
0
20%
Dec-16
50
40%
Nov-16
0%
60%
Oct-16
100
80%
Aug-16
150
Change %(RHS) 100%
Sep-16
50%
Clinker Inventories('000 Ton)(LHS)
Jul-16
200
450 400 350 300 250 200 150 100 50 0
Jun-16
100%
May-16
Dispatches ('000 Ton)(LHS) 250
-40%
Source: Yamamah Cement Company, AlJazira Research
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RESEARCH DIVISION
Acting 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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